Tags Posts tagged with "Nevada"

Nevada

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Nevada’s recreational marijuana market opened on Saturday and there were several reports of long-lines at dispensaries as residents and tourists took advantage of this new market.

The Las Vegas review Journal recently said that they expect Nevada’s recreational marijuana market to to generate more than $70 million in tax revenue over the first two years.

We would not be surprised if these numbers proved to be conservative as we expect to see much higher numbers reported by the state. The Nevada marijuana market will be fueled by the 40+ million visitors who come to Sin City every year and we think these numbers underestimate the amount of money that will be spent on marijuana.

We are not the only ones excited about the new opportunities created by this burgeoning market and believe that investors can do well by investing wisely in Nevada-based marijuana firms.

Nevada’s recreational marijuana market will see incremental growth over the coming years and the companies levered to it should see significant top- and bottom line.

While there are a lot of companies focused on the Nevada marijuana market, investors need to be selective. Prior to investing, through due diligence must be conducted and investors should focus on companies that have a proven track record of success, a licensed facility to sell recreational and medical marijuana, and enough capital to support growth initiatives.

One of the most profitable sectors of the marijuana markets has been extracts and concentrates. We would look for companies that are vertically integrated, sell a wide variety of marijuana products (flower, concentrates, and edibles).

We also suggest looking for companies that have are constantly looking at new ways to stand out and differentiate from their competitors. Although we are still in the early innings of this growth opportunity, companies that are able to develop a brand that resonates with consumers will be best positioned for long-term growth.

The surge of marijuana products and product types will make branding very important over time and will lead to significant growth over the long-term. This is something investors need to look into when analyzing a company.

Authored by: Jason Spatafora

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Nevada’s idea of using its medical marijuana market to temporarily aid to the need of the recreational sector is set to launch sometime within the next month. Taken from a report from the Las Vegas Sun, there are more than 140 applicants vying to become the first to sell weed in a manner similar to beer.

The intent of the “early sales” initiative was to give adults 21 and older the liberty to walk into a state licensed dispensary and purchase up to an ounce of weed without flashing a medical marijuana card. Meanwhile, it would give state officials some breathing room while putting together the regulations for the full-scale market set to launch next year.

Is There Way Around Nevada’s Recreational Marijuana Issue

In the development phase, lawmakers pressed the importance of getting recreational pot sales up and running in enough time to beat the summertime tourism rush. After all, Las Vegas alone is predicted to see as many as 43 million visitors this year.

But unfortunately, there is a distinct possibility the whole idea of early sales is about to go down in flames courtesy of the alcohol industry.

When voters approved recreational marijuana last November, they gave the state’s alcohol distributors the first right of refusal on recreational pot sales for the first year and a half.

While there haven’t been booze companies to come forward with an interest in getting involved with legal marijuana, a small group of wholesalers is stirring up trouble.

On Tuesday, a district court judge issued a temporary restraining order that prevents the state from issuing recreational marijuana licenses until it can be determined whether the Independent Alcohol Distributors of Nevada is getting ripped off by early sales.

“The statute clearly gives a priority and exclusive license to alcohol distributors, in order to promote the goal of regulating marijuana similar to alcohol,” the judge ruled.

Oddly, no one is actually preventing the alcohol industry from applying for licenses to sell weed. The problem is 13 booze distributors do not want medical marijuana businesses involved for 18 months—even though they already have the infrastructure in place to do the job.

For now, no one is certain how the judge’s order will affect the recreational marijuana application process.

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A well known dispensary out in Denver called Medicine Man was established on serving medical marijuana patients. However, since Colorado legalized recreational marijuana sales three years ago, some of the store’s patrons have been making medicinal purchases

“There’s less need for medical inventory because we have less medical customers,” said Andy Williams, owner, and CEO of Medicine Man, one of Colorado’s largest legal marijuana stores selling both recreational and medical marijuana. “People don’t want to go through the hurdles to get their cards anymore.”

A similar situation will likely play out for Nevada’s marijuana dispensaries when recreational marijuana sales go into effect July 1. The first four states that have already legalized recreational marijuana sales are Oregon, Alaska, Washington and Colorado which have all seen a drop in the number of active medical card-holding patients.

Will Recreational Pot Sales Be More Dominant Over Medical Sales

For nearly two years since Nevada’s first dispensary opened in July 2015, medical marijuana has been the only source of legal weed. Nearly 28,000 Nevadans currently hold medical cards, and thousands of other purchases come from out-of-state buyers through the state’s reciprocity program, which honors medical cards from other weed-legal states.

Williams’ dispensary opened in December 2009 to serve medical patients, but quickly moved away from that model when recreational sales started in 2014, he said. Medicine Man’s name now seems ironic, given more than two-thirds of its customers are recreational buyers and Williams gets less than half of the medical patients he once did.

In Colorado, medical cardholders were down more than 34,000 at the end of 2016 from the program’s peak high of nearly 129,000 patients in June 2011.

Other out-of-state dispensary owners have reported a similar decline in medical pot buyers — from Oregon, where state cardholders fell from 78,015 less than two years ago to 67,141 per the state’s most recent tally, to Alaska, where cardholders fell 40.6 percent from January 2015 to the start of this year.

“I think more people here have decided not to go the medical route because of the high price tag on getting a card,” said Eli Bilton, CEO of Attis Trading Dispensary in Portland, Oregon. “It’s hard to make up for a $400 annual card if you’re not always buying a lot of product.”

While recreational sales have yet to start in Nevada, the state’s medical cardholder count continues to rise, reaching a record high of 27,952 in April, the last month of data available. Yet the process of applying for a medical card, similar to those in other states, requires both money and time.

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A bill allowing local governments’ issuance of permits for marijuana social clubs has passed in the Nevada senate. The bill passed 12-9 Tuesday and will later be revised and reviewed by the assembly.

The main reason for the drafting of the bill was to improve the tourism industry in Las Vegas. Tourists do not have safe places to use recreational marijuana, which is not legal in the state of Nevada, Lawmakers said.

Tourists will soon be able to purchase up to one ounce of marijuana, but they will have no place to use it. The law that took place on January 1st made it so people can smoke marijuana at a private residence.

The lack of suitable lounges could cause tourists to bring in the drug into casino properties and “dump the responsibility onto the resort corridor,” said Andy Abboud, Las Vegas Sands Corp. senior vice president.

Pot lounges in Clark county would mostly be located on the Las Vegas Strip, Abboud said.

Lawmakers in favor of the new bill claim that the lounges are going to play a huge part in governor Brian Sandoval’s two-year budget which claims about 70 million dollars from a special marijuana sales tax.

“We’re trying to get $70 million in tax revenue from them, so let’s give them some place to use it,” State Senator and bill sponsor Tick Segerblom said.

State Senator Don Gustavson originally voted against the bill because he thought that whoever voted for the marijuana ballot in November did it thinking it would only allow people to consume marijuana in their homes.

Another burden for lawmakers is that President Donald trump’s administration will bring in federal drug enforcers into states that start marijuana social clubs.

Lawmakers in Colorado stopped a bill earlier this month because of the same concern. Denver voters however approved a measure in November which was similar to the bill.

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Senator Tick Segerblom, a Las Vegas Democrat, wants recreational marijuana sales to begin by June. The reason he is seeking the early start is just in case something happens to extend the state’s current timeline. The original target date was July 1st, six months ahead of a voter-mandated deadline. Department of Taxation Director Deonne Contine said the state will be ready by then to license medical marijuana dispensaries to ring up the state’s first sales of pot bought for fun.

Much of what the Department of Taxation is aiming for is stated in Senate Bill 302, which include implementing sales taxes and some new rules and the general provisions of the legalization initiative voters passed in November. Segerblom stated, “We’re not trying to compete with Taxation’s early-start program. If their early-start program gets out there, we don’t need this bill, but if there’s hiccups in that or something, this would be an alternative.”

Hearings will be held regarding the tax department’s proposed marijuana rules. Continue stated, “I would like to emphasize that I feel like that process is prudent and it is with a lot of thought and so I’m confident that the state will be ready to go on July 1.” With voter approval, Nevada legalized recreational marijuana for adults 21 and older last year. However, there’s nowhere to legally buy marijuana for personal use until the state allows dispensaries to sell it.

Segerblom’s proposal would give the dispensaries permission to sell. The bill will put the 10 percent state sales tax on recreational marijuana into play that Governor Brian Sandoval floated in January, as well as another 5 percent sales tax to benefit local governments. Segerblom said his measure would streamline collection. Segerblom said to Continue, “We both agree we want to have one inventory, one accounting system.”

The proposal would have the recreational marijuana industry operate under the medical marijuana rules that took 15 years to carry out in Nevada. It would be replaced by the tax department’s regulations once that agency begins licensing recreational marijuana shops. Segerblom said he had intended the proposal to get Nevada’s recreational marijuana industry off the ground even earlier, but there was a setback in the legislative process. The proposal would take effect immediately after his colleagues in the Democrat-controlled state house and the Republican governor sign on, a constitutional process that must be finished by June.

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Senate Bill 329, introduced by Sen. Tick Segerblom, D-Las Vegas, would loosen some medical marijuana regulations, an idea Governor Brian Sandoval has stated his opposition to. Senate Bill 329 proposes a plethora of changes to how the state deals with cannabis. It would allow veterans to obtain a medical marijuana card, add PTSD to the list of conditions that qualify for those cards and even make it so cards do not need to be renewed. Medical cards now last 12 months in Nevada.

The vast majority of cardholders in Nevada can only grow medical cannabis if they live more than 25 miles from a dispensary. The proposal would lift that halo, and allow all cardholders to grow, cultivate, and produce cannabis products. However, the bill could face resistance, even if it passes both the Senate and Assembly. At the first meeting of the state’s cannabis task force, Sandoval’s legal counsel, Dan Stewart, stated the governor is “not interested in action that would water down our current medicinal marijuana laws and regulations.” If the proposal made it Sandoval’s desk and he chose to veto it, a two-thirds vote in both houses would be needed for an override.

SB 329 also calls for several other changes, including:

Setting the foundation for state universities to begin researching the effects of marijuana.
transferring the state’s medical marijuana program from it’s housing under the Division of Public and Behavioral Health to the Department of Taxation, which is also tasked with creating and enforcing regulations for recreational marijuana.

authorizing “nonprofit medical marijuana dispensaries,” which would be able accept donated marijuana which it could sell for a reduced price to patients based on financial need.
requiring medical marijuana businesses to install security cameras which police can access in real time.
allowing for the cultivation and production of hemp in Nevada

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State officials recently said that Nevada still plans to launch recreational cannabis sales in July in spite of warnings of a federal restriction by the administration of President Donald Trump. Cannabis possession and sales are illegal under federal law, but Nevada voters decided in November to allow people age 21 or older to use pot recreationally. White House spokesman Sean Spicer recently said that the United States Justice Department will step up enforcement of federal laws restricting recreational cannabis. No immediate action accompanied the statement, came in response to a reporter’s question.

That has not cued the Nevada agency tasked with crafting rules governing recreational cannabis sales to change its timeline for ensuring dispensaries can open this summer, said agency spokeswoman Stephanie Klapstein. She stated, “As of now, the Department of Taxation is moving forward with our regulation development as planned.” The Democratic leader of Nevada’s state Senate, Aaron Ford, criticized the White House for what he called an “overzealous attack on the will of Nevada voters.” Republican Governor Brian Sandoval is currently budgeting tens of millions of dollars in cannabis tax revenue over the next two years to fund public education.

Ford stated, “Any action by the Trump administration would be an insult to Nevada voters and would pick the pockets of Nevada’s students.” He also claimed increased enforcement of the nation’s drug laws would constitute “federal overreach” and asked Nevada’s Republican Attorney General Adam Laxalt to make a statement similar to that of Washington state’s vow to fight any crackdown. Federal laws preempt state laws, but former President Barack Obama gave the states leeway to establish cannabis industries as long as they keep the drug from crossing state lines and away from children and drug cartels. It is unclear exactly what Trump’s administration will do.

Laxalt is analyzing the issue, spokeswoman Monica Moazez said. She stated, “Not every action taken by the federal government, much less every statement made by the president or his staff, constitutes federal overreach. Our office will continue to monitor this situation and analyze it according to the law and the Constitution, not speculate or jump to conclusions.” Nevada voters first voted to legalize medical cannabis in 1998 and gave final approval in 2000. After legal quarreling in the Legislature and local municipalities, the first prescription-only dispensaries opened in 2015. Trump said during his campaign for the White House that he does not oppose medical cannabis.

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Recreational pot shops might open in Nevada as early as July 1st under a deadline scheduled by the state’s top tax official recently. Regulators at the state Department of Taxation have been creating deadlines and regulations to govern recreational cannabis since voters in Nevada made it legal for adults 21 and older in November. Executive Director Deonne Contine told a panel of state legislators that she hopes to publicize a draft of those rules in March and begin accepting applications for temporary licenses to sell recreational marijuana in May, which would be far in advance of the state’s January 1, 2018 timeline.

Temporary licenses will only be open to medical pot shops in good standing with the state. Contine said she’s aiming to green-light those businesses to sell to the public by July 1st. Based on Contine’s unsure timeline, any entrepreneur could apply for a license to sell recreational cannabis in Nevada as soon as October 2018. Contine said Nevada’s laws will borrow heavily from the state’s medical cannabis rules and Colorado’s recreational pot laws. They will include a formula to set the wholesale price of pot, which will determine how much the state collects under a voter-approved 15% excise tax. The regulations also define how and who can transport cannabis.

While tax regulators work on those guidelines, Joe Pollock, an official who oversees the state’s medical cannabis industry, has increasing worry of how commercial pot will affect the drug landscape in Nevada. Pollock said of medical marijuana shops, “Basically the rurals don’t have dispensaries. If anything, I would be worried that the black market would move toward those rural counties because the recreational marijuana will not be available conveniently in those counties.” Of the almost 25,000 medical cannabis patients in Nevada, 482 of them are under the age of 21, according to Pollock, deputy administrator of the state’s Division of Public and Behavioral Health. Unless Nevada ensures medical cards and cheaper prices than recreational pot, Pollock said, those minors are some of the only patients with an incentive to continue using marijuana for medical purposes.

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mCig, Inc. (MCIG) continued to show strong growth on a quarter-over-quarter basis after the company reported preliminary results for the third quarter which ended on January 31st.

mCig has shown incremental growth following the company’s transition from a pure-play vaporizer company to a diversified holding company focused on the legal cannabis, hemp, and CBD markets as well as the picks & shovels approach with Greenhouse & other cultivation construction projects via their Scalable Solutions division.

Highlights from the company’s third quarter include:

● Generated $1.3 million in revenue (200% higher than the prior quarter) through its construction, CBD, and e-Cig divisions
● Reported $845,000 in net income (adjusted net income of $118,00), a company record
● Generated $341,000 in cash from operations and increased its cash, and cash equivalents to $420,000
● Reported to have more than $1.2 million in current assets with only $287,000 in current liabilities. This provides mCig with an acid test ratio of 4.3:1, its highest rating in company history.

The company’s success in the third quarter has brought total revenue for this fiscal year to $2.2 million. The revenue generated represents a 546% increase from the same period last year, and a 204% increase from last quarter.

MCIG’s net income during the quarter increased its total net income for the fiscal year to $716,000 (32% net profit margin).

From the Management Team

Michael Hawkins, Chief Financial Officer, stated, “For the third straight quarter MCIG has recorded record numbers. With its current contracts and booked revenue the Company will continue to see quarter over quarter growth in revenue.” He went on to say, “During this quarter we will revamp our segment reporting; changing from construction, wholesale, and retail; to construction, CBD, and e-Cig operations. We feel reporting on the segments under these new categories will provide a greater in depth review of our operations to our shareholders and investors.”

mCig CEO Paul Rosenberg said, “The cannabis industry is growing rapidly and MCIG has been there since the beginning. Management continues to focus on its business grow opportunities in Nevada, while continuing to service other states as well.”

A Trend to Watch

Over the last year, mCig has expanded its offering as well as the states it operates out of. The company recently entered its first business agreement in Maine which marked the sixth state the company is operating out of.
Investors should keep an eye on MCIG as this is a company to watch as they continue to expand their cultivation construction arm in the Nevada market, which we anticipate will become the most lucrative market outside of California. The continued execution coupled with a more attractive product and service line has made mCig an attractive partner for many businesses and we expect to see further expansion from here.

We may buy or sell additional shares of (MCIG) in the open market at any time, including before, during or after the Website and Information, provide public dissemination of favorable Information. PLEASE READ OUR FULL PRIVACY POLICY & TERMS OF USE & DISCLAIMER (http://marijuanastocks.com/content/terms-and-conditions-use/)

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Cannabis recently became legal for adults in the state of Nevada. However, farming it is illegal unless they live more than 25 miles away from a retail marijuana shop. This is an example of what’s called a “halo rule.” Marijuana Policy Project introduced this idea in the 2010 Proposition 203 that brought medical marijuana to Arizona. It mandated that any patient living within 25 miles of a dispensary could not grow their own marijuana. They would have to register with and purchase their cannabis from their local authorized dispensary. At first, this meant that all patients could grow their own cannabis, as the law went into effect before any licenses had been awarded to dispensaries. However, as the dispensaries opened, every patient within that 1,964 square mile area had to remove their marijuana crops.

The halo concept made its way to Nevada while their legislature dealt with the issue of dispensaries. The state’s law hadn’t authorized any retail outlets, but did allow for all patients to grow up to 12 marijuana plants for medical use. In 2013, the state passed a law that created the dispensaries, with a 25-mile halo rule included. Patients who were already growing were given until this past summer to remove their marijuana crops within the halos. Question 2 was passed in November, also with a halo rule, and with an 18-month lockout on recreational licensing for all but the existing medical marijuana retail shops, growers, and processors.

Washington D.C. and 16 states have passed medical cannabis laws. As legalization continues to increase across the country, our adversaries are going to understand that they can’t win the battle. Their main priority will be to assure that we can’t grow our own marijuana. National legalization polls lingered around 45% and no states with legalization in 2010. But since California’s Prop 19 failed, we have gone 9 for 12 in statewide legalization votes. Seven of the nine wins allowed for personal home grows with no halos.

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