CANNABIS COUNTDOWN: How much will recreational marijuana be taxed?
As marijuana dispensaries around Reno prepare for a rush of customers this Saturday, they're also adjusting their registers to prepare for new taxes on recreational sales.
Governor Sandoval mentioned the taxes in his State of the State address this year. He said, "my budget includes one new source of revenue: a 10 percent excise tax on all retail sales of recreational marijuana."
Taxes on recreational marijuana will help fund education in the Silver State, but how will they affect the price tag on pot products?
"Recreational marijuana will be at least 10% more expensive than medical marijuana." Sierra Cannabis Coalition Director Will Adler said cannabis cultivators will charge a 15 percent wholesale tax on their products.
He said that tax revenue will go into Nevada's Distributive School Account. The State Board of Education will then decide how that money is distributed to schools across the state.
But when marijuana products reach the dispensary, customers will see another 10 percent excise tax at the register. Adler said, "the new excise tax of 10 percent actually goes to the rainy day fund, which is a general fund for covering any holes in the budget."
Recreational marijuana products will also be subject to state and local sales taxes. That'll tack on about another 8.5 percent to the bill.
Meanwhile, medical marijuana customers will now get a tax break when they check out. "We will no longer have that two percent excise tax." Adler said, "that's no longer there."
Right now, marijuana producers are hiking up their prices as demand grows ahead of July 1. Adler said, "a lot of cultivations are actually sold out of products because of that."
Although prices will be high when recreational sales begin, Adler anticipates they will level off as more growers enter the market.
"You'll definitely see the price start [high] and go [low] because the more competition on the market, the lower the price is."
He said even with the more than 32 percent customers will be paying in taxes on recreational marijuana, prices will still be competitive with the black market.
Dispensary employees at Sierra Wellness Connection in Reno said they're preparing for a line out the door when they start selling retail cannabis this Friday night at midnight.