Nevada was an early adopter of medical cannabis, passing a constitutional amendment in 2001. In the years since, the state has passed adult use legislation, launching America’s fifth recreational market in July 2017.
The state, which has 3.1 million people, saw medical sales of $89 million in 2018, according to data from BDS Analytics and Arcview Market Research.
Adult use generated $478 million in the same period. By 2024, medical sales are expected to decline to $50 million annually, while recreational jumps to $1.4 billion.
The forecasted figures represent the downward trend that occurs in most adult use markets. However, Nevada has bucked the trend of declining medical enrollment numbers, seeing its active patient registration rise 2% by October 2019.
Over 16,800 active patients are in the program, according to the latest state data.
Possible Benefits For Nevada’s Medical Patients
Patients in Nevada receive benefits for having a valid card, though some do not find them worthwhile.
Benefits include avoiding 10% sales tax charges and reciprocity laws for qualified visitors. Yet patients like Lori Deters worry about product quality and price.
“The quality is terrible, the product is dry,” Deters told Benzinga.
Deters also voiced concerns over products for patients, saying little difference exists from the adult use space.
“A recreational person can get the same stuff I can,” she said. “The only difference between them and I in most places is the taxes.”
Deters and other patients may experience a lack of options for medical purposes. That said, the state does permit registered patients to purchase products containing up to 1,000 milligrams of THC in each container.
Adult use consumers can only purchase up to 100 mg per container. Not every dispensary offers different THC potency products at their locations.
Brandon Wiegand, regional general manager for dispensary brand The+Source, said the company does offer such options.
Ninety percent of the company’s sales came from the adult use market, he said.
Patients aren’t always able to find the products they need, and many have pivoted to the recreational market, Wiegand said.
With eighths of flower selling for $40 to $50 on average, prices can mount for customers, making the 10% tax break beneficial.
“If you’re spending anywhere near $100 to $125 a month in product, it probably makes more sense for you to go get a medical card,” he said.
The adult use market has conveniences, such as eliminating doctor checkups, that can outweigh paying the 10% tax.
While not state mandated, Wiegand said priority patient access is being practiced by several operators in Nevada, including The+Source.
“We want to make sure we take care of them,” he said of the state’s medical patients.
Additional Concerns In Early 2020
In recent months, Nevada faced its share of pain points. They include the late 2019 closure of Cannex Nevada, a Las Vegas testing lab, after the state found that the lab approved marijuana for sale that had three times the allowable limit of yeast and mold.
The shutdowns, while necessary to maintain industry standards, did lead to some concern over a bottleneck in available labs.
The closure followed a September 2019 investigation that was triggered by two health advisories in the state.
In February 2020, Nevada levied a $70,000 fine against Certified Ag Labs for several violations. Infractions included overinflating THC levels and unintentionally destroying or concealing evidence.
Now, with the world facing the effects of the COVID-19 pandemic, so too does Nevada’s cannabis market.
The+Source’s Wiegand said the company “is completely changing the dynamics of how to operate” to a delivery-only model. “Our priority will be to try to continue to serve and prioritize our medical customers,” said Zimmer.
Photo courtesy of The+Source.
© 2020 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.