For cannabis growers in Nevada, a bevy of hefty taxes and fees is leading many to wonder whether they’ll be able to keep their doors open. One of the biggest problems lies in how the state calculates and imposes its 15 percent wholesale tax on cultivators, which growers say is forcing them to pay as much as double that rate.
“We won’t be around very much longer if they don’t change,” said Rick DeCarlo, co-owner of The Real McCoy, a cultivation company in Carson City. “If we have one bad month … it’d be it.” Nevada imposes a 15 percent tax on cannabis sold by cultivators to dispensaries and production companies, with a portion of those revenues directly funding public schools in the state. In 2022, that tax generated nearly $60 million.
But the taxes cultivators pay to the state are not based on the price of the product sold to dispensaries. Rather, what they pay is based on a per-pound rate set by the state – no matter what the actual sales price is.
For smaller, independent growers, that means they are often paying an effective tax rate on their sales of closer to 25 to 30 percent. And it’s just one of the multiple costs of doing business in cannabis cultivation. Companies also are required to pay big sums to stay in compliance with a list of state regulations.
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