Regulators catching up to pot

Lawmakers approve funding to help officials keep up with burgeoning industry

CARSON CITY — Nevada’s fledgling marijuana industry has taken off significantly faster than state officials anticipated.

Now state regulators are scrambling to catch up.

The Nevada Legislature’s Interim Finance Committee on Wednesday approved approximately $1.3 million in new funding for the Nevada Department of Taxation to help bolster staffing and make technology system upgrades that the department’s executive director said are necessary to keep up with the ever-increasing regulatory demands.

Nearly all that money comes directly from the marijuana taxes the department has collected since recreational sales kicked off in July. Those sales started strong and have continued to surge far above expectations.

“Its pretty obvious that things have gotten off to a stronger start than what was anticipated,” Nevada Department of Taxation Executive Director Bill Anderson said during the committee’s meeting. “It’s obviously strained our department, and we’re taking proactive steps early on to meet those challenges.”

Through the first nine months of sales, the state collected roughly $49 million in marijuana taxes, which is slightly under what the state expected to bring in the first full year.

Anderson told committee members his department needs the monetary injection to continue to properly regulate the marijuana industry, which is slated to

MARIJUANA

grow significantly in terms of licensed dispensaries this year.

Among other things, the new money would go toward hiring more than a dozen temporary staff members, developing a public service announcement to discourage pregnant woman from using marijuana and purchasing a new case management system for more efficient management and regulation of the more than 500 marijuana licensees the department oversees.

Anderson also asked the finance committee to approve more than $800,000 to continue funding several staff positions, including eight permanent positions and armed security for the department’s offices in Henderson, Carson City and Reno.

The armed guards are needed because the marijuana industry still deals almost entirely in cash, since federally insured banks do not let marijuana companies bank with them, Anderson said. That means the department has large sums of cash coming through its doors on a regular basis.

“That necessitated the need for security for both tax department workers as well as taxpayers,” Anderson said.

All but one of the department’s funding requests were approved.

Assemblyman Mike Sprinkle, D-reno, took issue with the request for $108,000 to pay an outside contractor to look over the medical marijuana regulations and recommend any changes to ensure they are in line with the current recreational regulations.

Sprinkle said he believes the department could handle that work internally with its increased staff.

“We’ve all seen how this industry that we’re working on has just really far more exceeded expectations,” Sprinkle said. “I think what you’re asking for here makes a lot of sense. I definitely agree with the notion that we could be that ideal that other states look at.”

The committee also approved the first transfer of marijuana tax money to the Distributive Schools Account, the state’s public education budget, to the tune of about $8.4 million.

Contact Colton Lochhead at clochhead@reviewjournal.com or 775461-3820. Follow @Coltonlochhead on Twitter.