5 Lessons Learned: Nevada’s First Week of Adult-Use Cannabis SalesChris KudialisJuly 11, 2017
“I’m tired of buying on the street.”Steve Evans, customer
The launch came nearly eight months after state voters approved Question 2 to legalize adult-use cannabis—a blink of an eye compared to other states, many of which have been hit with long post-legalization delays. Not only were sales fast, they were also heavy: During the first four days, dispensaries raked in nearly $3 million in revenue and generated about $500,000 in taxes for the state, according to the Nevada Dispensary Association. The stronger-than-expected sales have been a boon to dispensary owners, but they’ve also raised concerns among some officials that stores risked running low on product.
We spoke to cannabis advocates and dispensary owners to pick out some of the lessons learned from the first week of Nevada’s adult-use era. Here are their top five takeaways:
1. Demand is Strong. Very Strong
In the week leading up to July 1, more than a dozen Las Vegas-area dispensary owners interviewed by Leafly said they weren’t sure exactly what to expect in terms of demand. They beefed up security and added staff to prepare for the high customer turnout, they said, but still were operating on educated guesses. At the end of the day, however, turnout far exceeded expectations.
At Reef Dispensary, just a block off the Las Vegas Strip, an estimated 500 customers waited in line before the midnight launch. One customer, 54-year-old Steve Evans, arrived at 7:30 p.m. to be first in line.
“It’s the longest I’ve been away from my home in eight years,” he said. “But I’m tired of buying on the street.”
Waits of more than an hour were reported at all 16 Las Vegas dispensaries that opened their doors at midnight. Long lines also greeted the 22 other dispensaries that opened their doors at regular business hours Saturday morning.
By Monday, the lines had only slightly died down. Waiting customers stood outside The Source Dispensary, on the west side of the Las Vegas Valley, for about 30 minutes before the dispensary opened its doors. “It met and exceeded what we thought would happen,” said owner Andrew Jolley, who said his customer count increased fivefold overnight. “Fortunately we were able to serve everybody.”
2. Dispensary Shelves Are Well-Stocked—So Far
After a June 20 court ruling that granted cannabis distribution rights exclusively to licensed liquor distributors, could, owners across the Las Vegas Valley brought in shipments by the truckload during the last few days of medical sales. Some, including Jardin Premium Cannabis Dispensary owner Adam Denmark Cohen, closed his dispensary the day before adult-use sales began to focus on shipping as much product as possible to stock his shelves. That came in addition to months of slowly building up shipment volume to prepare for adult-use sales.
“We’re doing well for now, but it might be a different story in a couple weeks.”David Goldwater, owner, Inyo Fine Cannabis
“We didn’t go crazy, but we absolutely wanted to be prepared,” Cohen said.
David Goldwater, owner of Inyo Fine Cannabis Dispensary, said Friday that sales were “still going strong” but that he had a full lineup of products in inventory.
“We’re doing well for now,” he said, “but it might be a different story in a couple weeks if we don’t get the injunction figured out.”
By the end of the first week of sales, fears of a shortage had magnified. “We previously were informed the dispensaries may have up to 60 day supplies of product,” Michael Willden, Gov. Brian Sandoval’s chief of staff, told the Associated Press. “We are now informed that many have only days or weeks of product to be sold.”
Sandoval’s office has authorized lawmakers to consider an emergency regulation that would allow officials to adjust rules if they determine the state doesn’t have enough distributors to keep retail shops stocked.
3. Everybody Played by the Rules
Investigators deployed across the state found no rule violations or illegal activity by dispensaries during the first week of sales, regulators at the Nevada Department of Taxation said Thursday. Department spokeswoman Stephanie Klapstein said that investigators made sure dispensaries sold only to buyers aged 21 and over. They also ensured state requirements for labeling, consumer safety, and packaging, were being followed.
4. There Are Still Some Hiccups, Especially for Patients
Besides the lines, which during the day left many marijuana buyers standing for over an hour in blistering desert temperatures of 110 degrees, some dispensaries reported lagging computers and other issues as swarms of buyers put pressure on internal systems.
“Our computers don’t know how to handle it yet,” said a cashier at Essence Cannabis Dispensary on the Las Vegas Strip, working frantically just after 2 a.m. during the Saturday launch. “We’re trying to keep everything running so it doesn’t crash.”
Waits added up, hundreds of customers across the Las Vegas Valley still waiting in line were sent home without having had a chance to make a purchase when shops closed their doors at 3 a.m.
Medical cardholders also complained of an increase in prices, though registered patients received a 10% discount on cannabis products. “All of a sudden I’m paying almost twice as much for everything,” said medical-market shopper Norma Rodriguez after shopping at Reef Dispensary. “It’s not fair.”
5. Tax Revenue Might Actually Hit Those Ambitious Targets
With an estimated $750,000 in daily sales revenue during the first four days of recreational sales, the state brought in between $115,000 and $135,000 in tax revenue per day, totaling about $500,000 in taxes over the first four days.
“There was a lot of doubt that this would actually begin on July 1.”Andrew Jolley, owner, The Source
As it stands, even that may not be enough to hit projections. Nevada Gov. Brian Sandoval has called for $60 million in tax revenue from adult-use sales over the next two years. At the current rate, Nevada would raise only about $54 million over that period.
But with 13 additional medical facilities in the cities of Henderson, Sparks, and Carson City set to open their doors for adult-use sales next month, state Sen. Tick Segerblom (D-Las Vegas), a longtime legalization advocate, said he was confident in Nevada’s ability to hit that mark.
“We feel good where we are,” he told Leafly. “We just have to keep the sales going and keep moving forward.”
Jolley, owner of The Source, echoed that idea, saying he expects sales to increase next year as dispensaries become more logistically efficient and more of the 43 million annual visitors to Las Vegas are aware that adults can now legally buy cannabis.
“This week was especially impressive considering we didn’t really get the word out,” Jolley said. “There was a lot of doubt that this would actually begin on July 1.”