Nevada’s Green Rush Leaves Missouri in the Dust

Nevada leaves Missouri in the Dust with an "Early Start" retail adult-use cannabis program.

By: Cecil King

Nevada’s Green Rush Leaves Missouri in the Dust

Missouri cannabis activists will be watching from the sidelines again as another state scrambles to hire hundreds of cannabis industry workers and braces for tens of millions of retail cannabis sales to adults starting this summer.

Nevada state officials couldn’t wait until January 1, 2018 to start their voter-approved adult-use cannabis market. The state’s tax officials approved temporary regulations at the end of May for retail cannabis sales mid-2017. Now the rush is on to get ready for retail cannabis sales July 1.

The early start program is only open to existing medical cannabis dispensaries, growers and processors who must file for a temporary retail license. About 190 of these cannabis business entities exist in the state. As these established businesses obtain “early start” licenses the rush has started to hire additional staff and build out facilities.

The early adult-use program will make Nevada the fifth state with an operational recreational cannabis market. Since tourism adds millions of dollars to the state’s economy, a large percentage of cannabis sales will go to tourists.

Using Colorado as an example of the power of cannabis tourism, 90% of all retail cannabis sales are to out-of-state tourists in the heavily visited mountain corridor regions. Nevada could also reap a sales bonanza from visiting tourists.

Las Vegas had more than 40 million visitors in 2016. That is almost as many tourists as former Missouri Governor Jay Nixon estimated (43 million) would visit the entire “Show-Me” state at the end of 2016.

Using the national average of adult-use cannabis estimate of 10.8% (2013 National Survey on Drug Use and Health Report: U.S. Dept. of Health & Human Services), Nevada could see yearly cannabis sales of $375 million to $425 million to tourists.

When Missouri establishes a legal and regulated retail cannabis market, sales to tourists could add several hundred million dollars to a retail market estimated at around $400 million. No legal cannabis sales will materialize in Missouri without a successful citizen initiative or federal rescheduling.

The earliest date possible for a vote on retail cannabis in Missouri wouldn’t occur before the 2020 election cycle. For 2018, a few full cannabis legalization initiative contenders are active and could gain traction with voters. Missouri’s earliest cannabis legalization effort was New Approach Missouri’s medical cannabis 2018 initiative.

Prohibitionist legislators in Missouri’s state senate have effectively killed all cannabis related measures including Paul Kurtzman’s (D) bi-partisan and federally sanctioned hemp bill. As the 2017 Missouri legislative session ended, it marks the third year in a row the senate has killed a house passed hemp bill. Citizen initiatives are the only clear path to cannabis legalization in Missouri.

Meanwhile the new cannabis industry in Nevada has only praise for state officials. Ben Sillitoe, the CEO and co-founder of Oasis Cannabis, a medical marijuana dispensary in Las Vegas said state officials and other stakeholders “all worked together to make this happen quickly, and I think Nevada is a good example of how good regulation works to advance the industry.”

One prohibitionist lawyer, Jim Hartman, president of Nevadans for Responsible Drug Policy, has filed a complaint to block the tax commissions “early start” program. Hartman says the commission violated Nevada’s “open meeting laws” by not stating their public meeting was to allow early retail cannabis sales, even though the published agenda specifically identified the statute in question.

Nevada’s cannabis industry business leaders are more worried about keeping customers happy and ensuring there’s enough supply for the early start program.

“There’s a glut of inventory now,” said David Goldwater, managing partner of Inyo Fine Cannabis. “It might be a problem, but given the capacity that’s out there, I think it’s a short-term problem.”