Something truly spectacular is happening right now in Nevada marijuana.
That’s not high-perbole, either. The recent headlines coming out of the Silver State are startling to even the most ardent legalization advocates.
The state’s recreational cannabis sales will begin July 1, the Nevada Tax Commission announced this month. An adult-use program’s start date is always newsworthy, because it represents the true dawn of a fully legal system, including the final step in the legalization process—retail marijuana sales.
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But what’s absolutely insane about Nevada’s start date is that it comes less than eight months after voters overwhelmingly approved Question 2 on Election Day.
For those who haven’t had their nose buried in weed policy for the last four years: This is monumental.
“I don’t know if there’s ever been a state to move this fast before,” longtime cannabis grower Evan Marder told me this week.
He’s right. In fact that was the very reason I’d called Marder, the founder and chief operating officer of Matrix NV, which grows and processes cannabis out of its North Las Vegas headquarters.
Back in 2014, Colorado made headlines when adult-use sales began only 13 months after the election that forever etched them into the state’s constitution; even though Washington state voted to legalize retail weed on the same November 2012 day as Colorado, it waited an additional seven months after Colorado’s start date before licensing its retail shops to sell their first eighths and edibles.
The class of 2014 was equally all over the map, with Oregon waiting 11 months—and Alaska nearly 24 months!—to kickstart sales after the election.
Nevada will undoubtedly become the first of 2016’s legalization class to put the use in adult-use sales. And the state’s breakneck march toward July 1 starts to make sense when you start breaking things down with some local knowledge.
“Nobody does privileged licensing better than Nevada, and that’s what I’ve been telling people since Day One,” Marder told me after wrapping up a non-stop 10-hour day inside his garden. “This program here is as good as, if not better than, any program out there.
“They’ve done everything right—such an amazing job of setting this industry up correctly. I applaud them. Working with the state has been fantastic. They’re all very good people, and they’re all very much on our side, which is amazing considering that 18 years ago you could have gotten locked up for just having a cannabis seed here.”
Ah, yes. Nevada has more history than most in the licensing, regulating, and vice realms. Why should cannabis be any different?
Marder’s point takes me back to a conversation I had with John Lord a few years ago. Lord is a New Zealand-reared entrepreneur in Colorado who owns LivWell Enlightened Health, one of the world’s largest legal cannabis businesses. He often talks about his homeland’s controversial decision to legalize prostitution in the same breath as his adopted home’s similarly controversial decision to legalize pot.
Critics rallied against each regulatory shift, arguing legal prostitution/weed would be the end of civilization as we knew it. And of course the critics were dead wrong.
Nevada knows this already. The sex trade has been alive and well (and legal) there since the middle of the 19th century.
But what about legal marijuana? Why is Nevada so confident on this issue?
“You have to remember where we are,” said Marder. “We’re right next to California, and they’ve had a cannabis industry there for 20-plus years where the sky didn’t fall. Nevada regulators and politicians see the potential in cannabis, and they understand what’s going to work.
“They foresee an industry like this as something that won’t be detrimental to tourism. On the other hand you have Florida politicians who are saying, ‘People won’t come here if we have medical marijuana.’ I’ve never heard a Nevada politician say that. In fact I’ve heard the opposite, where they talk about marijuana driving tourism even further.”
… did somebody say tourism?
Keep in mind that Las Vegas enjoyed a record year of tourism in 2016, with nearly 43 million visitors. Convention attendance was up. Hotel occupancy was up. It even got a brand-new Topgolf.
In a town best known as Sin City, do you think legal recreational cannabis sales are going to turn off many visitors?
So in booming and blooming Las Vegas the cannabis businesses can’t keep product on the shelves, right? Not so much. The only sales happening until July 1 are medical, and many of the state’s shops, cultivators, and processors are struggling to stay in business because there aren’t as many local MMJ patients as most hoped there would be.
Ganjapreneurs had also hoped Nevada’s all-comers reciprocity law, which allows licensed medical-cannabis patients from any 420-legal state to freely shop at the state’s dispensaries, would help them through this dry spell. But that hasn’t been the case either.
“Reciprocity has helped, but it didn’t do what they expected it to do,” said Marder. “Everyone here is losing money right now. Very few companies can be neutral, let alone cash-positive. We’re one of the few out there who is able to pay their bills without doing mass capital calls.
“There have been a lot groups that have gone out of business. Right off the top of my head I know three who are personal friends and no longer around. And we’re not turning a profit, but at least we don’t have to go to the partnership for more money. I’m coasting by right now, paying our bills, and it’s tough, man. I’m a guy who’s living paycheck to paycheck. That’s our business right now. And we’re considered to be among the top three cultivators in the state. We’re in a majority of the dispensaries out here.”
When I ask Marder what it looks like to sell his Matrix NV cannabis in a majority of the state’s medical dispensaries, he rattles off some impressive, if overall meager, numbers. His product is available in nearly 50 shops, but there are only 66 shops approved in the entire state, and only 57 of those are up and running, Marder said.
To put that in perspective, a 2016 report noted that Colorado had 440 adult-use pot shops and 531 medical dispensaries. The gold—er, green—rush in the Silver State is apparently taking its sweet time.
But July 1 is also only a few weeks away. And many of these entrepreneurs staking cannabis claims in Nevada would not have invested so heavily there had they not been investing in a recreational future.
So what are Marder’s hopes for Matrix NV in the recreational era, when anyone 21 or older can purchase his flower and concentrates with only an ID and some cash?
“In the early stages, I hope to become cash-positive and able to pay our bills and not have to worry about it every month,” he confided. “That’ll be very nice, actually having some room to buy what I need to buy and not live paycheck to paycheck.”
And then it comes a few moments later, as if Marder can see into the future—a much less stressful future.
“And I also hope that we’re able to pay back our investment group within the next two years.”
