State to spend $529K readying for medical marijuana dispensaries

The state will spend $529,000 in an effort to get medical marijuana dispensaries up and running.

The Board of Examiners approved the spending Tuesday. It will allow the state to implement the excise tax imposed as part of legislation designed to make medical marijuana available in Nevada.

The law legalizing medical marijuana use was passed a dozen years ago. Although the ballot question clearly said the state should provide a way for people with a medical marijuana card to access the drug, the Legislature had never approved growing or dispensing the drug.

That changed in the 2013 session, when lawmakers approved a bill by Sen. Tick Segerblom, D-Las Vegas, and Gov. Brian Sandoval signed it into law.

The legislation permits establishment and licensing of a limited number of growers and dispensaries statewide.

But just two days before the end of the session, an amendment was tacked on imposing a 2 percent excise tax when the plants are sold by the grower to the dispensaries and another 2 percent when the dispensaries sell the drug to cardholders. That second excise tax is on top of whatever county sales tax is imposed on the sale — which would add a total of about 9 percent in Carson City.

Taxation Director Chris Nielsen told the board that the $529,000 is needed to add the excise tax to his agency’s computer system. He said the programming is needed not so much to collect the tax but to distribute the money. Under the legislation, 75 percent of the proceeds are to go to K-12 education budgets and the rest to Health and Human Services.

Most of that total, he said, is a one-time cost, but some $54,000 will be the ongoing cost of a tax examiner’s position to keep tabs on the growers and dispensaries and make sure they are paying what they should.