Are Tourists that Buy Recreational Marijuana Causing a Cannabis Shortage in Las Vegas?

The growth of legal recreational weed sales since July 1st has been extraordinary in Las Vegas, but is a cannabis shortage going to derail the trend? Tourists are gobbling up certain recreational marijuana strains faster than the dispensaries can replace them. There are strong fears that the marijuana plants cannot grow fast enough to meet tourists’ future demand.

The money being made has generated tremendous amounts of tax revenue that is going to help public school systems. If cultivators are not able to expand their operations and grow sufficient amounts of quality marijuana to prevent a cannabis shortage, what will the school systems do without the revenue they have come to depend upon?

Other recreational weed states seem to have no problem producing enough cannabis, some have massive surpluses, so what is wrong with Nevada? Does the dry air prevent even indoor facilities from producing quality marijuana?

It’s been three months since recreational marijuana dispensaries opened across Nevada on July 1.

The Nevada Department of Taxation recently released data about the first month of sales. It shows Marijuana sales in July alone generated more than $3.6 million in taxes.

Nearly a million of that will benefit schools across the state. About $2.5 million will go into the rainy day fund.

Tax officials said they don’t have figures for August or September yet, but they expect Nevada’s marijuana industry to generate nearly $120 million in tax revenue over the next two years.

Many local dispensary owners attribute the success, in part, to Nevada’s tourism industry. A representative with MYNT Cannabis in Reno said the launch of recreational marijuana during a busy event season also helped with sales.

Stacy Castillo said, “a lot of it plays into the tourist industry here. We have a lot of people coming in from out of town to just partake in the many events we have. It kind of fell right into events season for us and I think that was a big part of why we did so well.”

Nevada is a reciprocity state, meaning people who live out of state can come here and purchase marijuana as long as they’re over 21.

While marijuana businesses are celebrating the success, they still have a few kinks to work out.

The biggest challenge many dispensaries are facing right now is a supply shortage. Dispensary employees are essentially waiting for marijuana plants to grow, so they can re-stock their shelves with fresh product.

Castillo said, “a lot of companies are having an issue with just being able to create production products because there’s not a lot of source flower out there; so a lot of companies are moving in the direction of creating more square footage so they can create more grow space and creating more product; so that’s why if we do experience any kind of delay in product it’s because we’re waiting for the product to be made.”

There haven’t been any reports of Nevada dispensaries actually running out of marijuana, but rather they’re running out of certain products.

Another challenge the marijuana industry is dealing with– a legal battle over who has rights to distribute recreational marijuana.

Castillo said she is starting to see more distributors come online and the distribution process is getting faster, but she is hopeful the Nevada Supreme Court will allow marijuana businesses to be their own distributors. She said that could save dispensaries a lot of time and money.

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Richard Lowe

Richard Lowe is a 14-year veteran of the financial sector with licenses as a commodity broker (Series 3) and investment advisor representative (IAR Series 65). Along with a focus on raising capital for the firms he was employed with, he also wrote and edited much of the content published by them. He holds a BA in Journalism from the University of Massachusetts. He has been a longtime advocate for marijuana legalization due to the social injustices associated with marijuana prohibition and the strong potential for the medicinal benefits of cannabis.

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