Nevada Marijuana Producers Need to Act Now to Scale Up Their Operations to Meet Demand

Last Updated on Jul 24, 2017

The initial demand for recreational marijuana in Nevada has surpassed market predictions. According to Nevada Dispensary Association , the first weekend of sales generated $3 to $5 million, equating to roughly $1 million in state tax revenue. Dispensaries encountered supply issues due to there being no licensed distributors at the onset of sales to restock their supplies.

State lawmakers voted in favor of opening the distributor process and allowing new applicants beyond the limited number of alcohol distributors. Regulators have since issued a few distribution licenses addressing the supply issues in the short term, but can producers keep up with the soaring demand? Nevada’s marijuana industry has the smallest ratio of producers to sellers of any of the legal states. In fact, according to a recent Fortune magazine post here , “Nevada is the only state with a grower to seller ratio that could undermine the industry’s success.” With a smaller number of producers the market is potentially more vulnerable to shortages. Any sustained shortage of marijuana will put the state of Nevada in a financial crunch, as they are depending upon marijuana tax revenue as a part of their annual education budget.

It’s time to meet the momentum of the marijuana market; the marijuana industry and producers must increase their output in order to match demand.