Exactly How Will Nevada Benefit From a 15% Cannabis Tax?
After the cannabis tax success in states like Colorado and California, Nevada looks poised to benefit from one of the highest taxes to date.
The legal cannabis scene in Nevada is rapidly changing and the state just scheduled a 15% cannabis tax on recreational use. Last fall, voters approved a bill to legalize recreational use. That program is expected to start at the beginning of July. It will operate alongside the state’s already-existing medical marijuana program. Earlier this month, state lawmakers worked out details for how legal cannabis will be taxed. Here’s what they came up with.
Nevada And Cannabis Tax
Starting in July, there will be some new taxes on legal weed in Nevada. There will be a 15 percent tax on all wholesale products. On top of that, recreational weed will have a 10 percent sales tax. That tax is in addition to the state’s regular eight percent sales tax.
Earlier, there was a two percent tax on medical marijuana. That tax was the same for cultivation and sales.
Now that recreational weed is legal, Nevada expects to see some big-time tax revenues. In fact, Governor Brian Sandoval said that legal cannabis in Nevada could generate more than $60 million over the next two years.
A lot of the money raised by weed taxes will go to help with education. Additionally, it will also contribute to the state’s “rainy day fund.” Here’s a more specific breakdown of how Nevada will benefit from weed taxes:
- Over the next two years, tax money will go the rainy day fund. This fund has been used heavily during the recession.
- Cannabis taxes will add $20 million to the state’s Opportunity Scholarships. This program lets businesses donate to the scholarships instead of paying regular taxes. The scholarships then help lower-income students who want to attend private universities.
- Weed taxes will contribute $25 million to the University of Nevada, Las Vegas.
Cannabis Taxes Help State Budgets
As Nevada prepares to start selling recreational weed, it is looking to other states as models. And that includes figuring out how to use cannabis tax.
So far, education has been a big beneficiary of legal weed in states around the country. For example, cannabis tax in Colorado has helped fund school construction programs. Similarly, they have contributed to scholarships for students attending universities.
Several states where recreational weed is legal also use cannabis tax to fight drug addiction and to enforce cannabis laws. Similarly, infrastructure improvements are often funded by cannabis tax. In some states like Colorado, cannabis tax is used to combat poverty and homelessness.
Like Colorado and other 420-legal states, Nevada can expect to see a big boost to its overall tax revenues. This boost should help the state’s budget. And with education coming out a big winner, it looks like the state is already preparing to enjoy some of the benefits of legal weed.