LAS VEGAS – PRESS RELEASE – Nevada’s legal cannabis industry reached a major milestone as sales exceeded $1 billion in fiscal year 2021. A total of $159 million generated through cannabis industry tax revenue and fees went into the state’s Distributive School Account, which funds K-12 education across Nevada.
Cannabis sales for the fiscal year ending on June 30, 2021 were up more than $300 million from the prior year’s total of $684 million. Sales had decreased in the spring of 2020 as COVID-19 restrictions forced stores to shut down and then reopen with reduced capacity. Nevada retailers were able to pivot their operations to expand home delivery and curbside pickup, enabling them to safely serve customers and to keep the industry’s 10,000 workers in their jobs during the pandemic.
“The record-breaking amount of tax revenue generated by the cannabis industry for education is really something to celebrate,” said Layke Martin, executive director of the Nevada Dispensary Association. “Retailers, cultivators, producers, and businesses up and down the supply chain, as well as the thousands of employees in the industry, should all be proud of the hard work and innovation that helped the industry bounce back from a challenging year.”
Unlike other businesses, the cannabis industry was not eligible to receive CARES Act or other federal relief because cannabis is still federally illegal. Additionally, Section 280E of the IRS Tax Code prevents legal cannabis businesses from deducting normal business expenses such as rent and payroll, because cannabis is classified as a Schedule 1 drug. As a result, cannabis businesses pay an effective tax rate of more than 60%.
In spite of these challenges, Nevada’s legal cannabis industry has grown steadily since recreational sales began on July 1, 2017. Nevada is among 19 states that have legalized recreational cannabis sales, with 86 dispensaries open statewide.