Nevada Passes Question 2 : What It Means and Who Benefits

On November 8, Nevada joined the states of Washington, Colorado, Alaska and Oregon—and most recently California, Maine and Massachusetts—in passing adult-use cannabis legislation. With 54.5% of residents voting ‘Yes’ in favor of the Nevada Marijuana Legalization Initiative, also known as Question 2, adult-use cannabis officially became legal in the Silver State.

Before the passage of Question 2, it was illegal to possess or consume marijuana in Nevada unless it was for medical purposes. Medical cannabis became legal in the state in 2000. Under the new law, adults who are 21 years old or older may purchase, possess and consume up to 1 ounce or less of cannabis or 1/8 of an ounce or less of concentrated cannabis. Individuals 21 years old or older may also grow up to six marijuana plants for personal use.

For those interested in becoming establishments that sell cannabis, the Department of Taxation is authorized to regulate them. Initially, each marijuana establishment must purchase a one-time application fee of $5,000. During the first 18 months of licensing, the only licensing applications accepted will be for cannabis stores, production facilities and cultivation facilities from registered medical marijuana establishments. Wholesale liquor dealers will also be permitted to apply for marijuana distributor licenses during that same period. Businesses that receive cannabis establishment licenses from the Department of Taxation may also be subject to additional taxes and fees imposed by the state and local governments.

The number of cannabis establishments allowed in the state will be determined by county population size. For example, Clark County which has over 700,000 residents, will be allowed up to 80 cannabis retail stores. Other smaller counties such as Carson City and Pershing County—which have populations of less than 55,000—will be allowed up to two stores. In addition, cannabis establishments are prohibited from being within 1,000 feet of a school and 300 feet from a community facility.

In addition to licensing, the Department of Taxation is charged with adopting regulations including licensing procedures, licensee qualifications, security of cannabis establishments, testing, labeling and packaging requirements, restrictions on advertising, and civil penalties for regulation violation.

Criminal penalties related to the possession, consumption, sale and cultivation of cannabis will be imposed and include such violations as the following:

• Driving while under the influence of cannabis
• Knowingly selling or giving cannabis to anyone who is under 21 years’ old
• Possessing or using cannabis in state correctional centers
• Possessing or using cannabis on school grounds
• Undertaking any task while under the influence of cannabis that constitutes negligence or     professional malpractice

Question 2 does NOT prevent employers from enforcing cannabis bans for their employees, cannabis bans in public buildings or on private property, and localities from adopting control measures related to zoning and land use for cannabis establishments.

The new law also created a 15% excise tax on cannabis sales by cultivation facilities and mandated annual licensing fees ranging from $3,300 to $30,000 depending on the type of license. Revenue from the excise tax as well as revenue from licensing fees and penalties will be collected by the Department of Taxation and will go to the Department of Taxation and local governments to cover the costs of enforcing Question 2 provisions. Remaining revenue would be deposited in the State Distributive School Account for use by Nevada schools.

Benefits of Passing Question 2

When cannabis is regulated and taxed, it can be beneficial for many. In addition to potentially generating $60 million in annual tax revenue, regulation will benefit Nevada in several ways including:

• Create and support thousands of jobs
• Reduce/remove dangerous black market sales
• Testing of cannabis to prevent contaminated products from reaching consumers
• Proper packaging and labeling so consumers know what they are getting
• Reduce/eliminate the number of adults—including the disproportionate number of people of color—from being jailed for possessing or consuming cannabis

Question 2 goes into effect on January 1, 2017. Until then Nevada police officers will continue to enforce the current law, which prohibits any non-medical cannabis possession. When retail stores will be up and running under the new law is still unclear. The Department of Taxation has until January 1, 2018, to develop regulations and licensing to allow the stores to operate.

Cannabis continues to be a Schedule 1 substance under federal law and how the new United States Attorney General will handle state cannabis laws will remain to be seen for all states, including Nevada.

Oaksterdam University’s academic departments include business, law, science, history, horticulture, culinary arts, social science, and applied sciences—all regarding cannabis and the cannabis industry. To learn more, please visit Oaksterdam University’s website (oaksterdamuniversity.com) or call us at 510-251-1544.

Dr. Aseem Sappal is Provost and Dean of Faculty at Oaksterdam University, the first cannabis college in the United States. He is a leading educator, speaker and subject matter expert to health care professionals, business leaders, politicians, and the media while promoting education and improving public awareness. Dr. Sappal also serves on the Scientific Advisory Board of the Health Research Institute, which works with the Oregon Medical Marijuana Program, serves on the board of the Public Education Program Fund, and is an advisor for the Coalition for Cannabis Policy Reform (CCPR) and ReformCA.