Nevada has a drug problem: Not enough marijuana

Nevada officials have declared a state of emergency over marijuana: There’s not enough of it.

Since recreational pot became legal two weeks ago, retail dispensaries have struggled to keep their shelves stocked and say they will soon run out if nothing is done to fix a broken supply chain.

“We didn’t know the demand would be this intense,” Al Fasano, co-founder of Las Vegas ReLeaf, said Tuesday. “All of a sudden you have like a thousand people at the door. ... We have to tell people we’re limited in our products.”

In declaring a state of emergency late last week, the state Department of Taxation warned that “this nascent industry could grind to a halt.”

As bad as that would be for marijuana consumers and the pot shops, the state has another concern: tax revenue. A 10 percent tax on sales of recreational pot — along with a 15 percent tax on growers — is expected to generate tens of millions of dollars a year for schools and the state’s general fund reserves.

With about 100 growers in operation across Nevada, there is plenty of wholesale marijuana. The crisis has to do with distribution and state rules over who is allowed to transport marijuana.

In the run-up to last year’s state referendum over legalization — which was overwhelmingly approved by voters, allowing people aged 21 and older to buy or possess up to an ounce of marijuana — the state’s powerful alcohol lobby worried that legalized weed would cut into liquor store sales.

So in a concession to the alcohol industry, the ballot measure stipulated that for the first 18 months of pot sales only wholesale alcohol distributors would be allowed to transport marijuana from cultivation facilities to the dispensaries.

When legalization took effect July 1, nearly 50 dispensaries — all of them already in the medical marijuana business — had been licensed to sell recreational pot. But no alcohol distributors had been approved to transport it.

The state Department of Taxation, which regulates legal marijuana, said it had received about half a dozen applications from alcohol distributors but that none had so far met the state licensing requirements, which include background checks and security protocols.

As a result, the dispensaries have had to rely on marijuana already in stock.

Dispensaries and state officials had anticipated the problem, and in late June the Department of Taxation attempted to loosen the licensing rules to allow dispensaries to transport their own marijuana.