Nevada Says Hello to 2016


Yes, in Nevada, 2016 has already arrived. A petition drive to get full legalization on the 2016 ballot is in full swing. Furthermore, supporters only have until November 11, 2014, to collect 101,667 signatures, and success is not at all certain. “Right now, we’re way behind in the petition drive,” reported Rob Kampia, Executive Director of the Marijuana Policy Project.

Nevada, of course, has big financial consequences for marijuana investors because of the size of its tourism industry, and there are reasons to be optimistic.

  • Estimates of Nevada’s annual marijuana market range between $400 and $500 million depending on methodology.
  • The state is already in the process of implementing a medical marijuana law, so it seems likely that by 2016, the regulatory infrastructure should be in place to handle recreational sales.
  • Besides, it seems like a natural choice for a place that is already skilled at taxing and regulating gambling, prostitution and alcohol.

But recreational marijuana initiatives failed in 2002 and 2006, and the process involves thinking two years in advance. Nothing is inevitable about progress toward legalization.


Why Two Years in Advance?

In Nevada, the process for getting a question on the ballot begins with a drive to collect signatures and then proceeds to the state legislature.  If the drive nets enough valid signatures, the measure will go to the Nevada legislature in 2015.  Because the measure has a tax component, it will require approval by two-thirds of both houses of the legislature before going to Gov. Brian Sandoval for signature. This will take months, and the bill could fail at any juncture, especially because of the super majority requirement.  It has been rejected by the legislature before.

But this is a “belt-and-suspenders” plan. If it fails in the legislature, the next step will be to put it on the 2016 ballot as an initiative. That is a presidential election year, as we all know, and turnout is expected to be high. It could be a big year for marijuana across the country.


The Initiative

As drafted, the bill is very like Alaska’s initiative, which is very like Colorado’s law. All are built on the same basic template, which has been developed by the Marijuana Policy Project.

The initiative would legalize private possession of up to one ounce of marijuana for adults 21 and older. It would establish a firmly regulated system of licensed retail stores, distributors, cultivation, manufacturing and testing facilities. It would also impose a 15 percent excise tax on wholesale transactions and direct all tax revenue toward education.


The Obstacles

The most immediate obstacle is getting enough signatures before the deadline. According to Kampia, the challenge of the moment is to raise enough funds to pay workers to collect signatures.  Without the signatures, the rest of the plan is moot.

Assuming the drive succeeds, organizers are already assuming that the bill will fail in the legislature and have a back up plan. That plan puts the question on the 2016 ballot as a popular initiative.

The risk of opposition to the 2016 ballot initiative is still a little difficult to anticipate. Organized opposition from the alcohol industry may be blunted by the provisions in the bill relating to licensed distributorships. Polls suggest widespread support for legalized recreational marijuana in Nevada but may not ultimately mean much in light of the fact that national players in the opposition, including Smart Approaches to Marijuana, are also positioning for 2016. Both sides are suiting up for battle.

It will be interesting. But first, for the future of a legal and regulated marijuana industry in Nevada, those election workers need to be on the street. This may be one of the best opportunities for the marijuana business community to get involved.

Anne Wallace is a New York lawyer who writes extensively on legal and business issues. She also teaches law and business writing at the college and professional level. Anne graduated from Fordham Law School and Wellesley College.

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