New fees for Nye County cannabis businesses will close loophole, officials say

Certain cannabis businesses in Nye County will soon have a new fee to fork over following the adoption of Nye County Bill 2023-05.

Approved by the Nye County Commission during its Tuesday, June 27 meeting, the bill pertains to the sale or transfer of cannabis and cannabis products from facilities in Nye County to those located outside of the county’s jurisdiction. As it stands today, the county collects no revenue from such transfers but come July 17, that will all change.

“What this is pertaining to is, currently we have several facilities in Nye County that also have facilities in Clark County or other parts of Nevada,” Nye County Planning Director Brett Waggoner explained. “They may cultivate their marijuana here, they bag it, they send it off to their production facility, which is in a different jurisdiction and that’s where it’s processed and then sold to the dispensaries for retail sale. We see no benefit (from that) and there are a few of the different facilities here who do quite a bit of volume where this is what has gone on.”

While the state of Nevada does not have laws regulating such transfers, as they do not affect the state’s tax revenue from cannabis sales, Waggoner said other jurisdictions, like Clark County, do and this was just what the bill was aiming to accomplish, Waggoner explained.

“In order to try to get to where we can capture some revenue and realize the benefit of this industry, like we had intended back in 2014, we’ve made some amendments and added a couple of paragraphs… which does assess a tax, the same tax as if you were to sell it in Nye County.”

“So kind of like a transfer tax?” Commissioner Debra Strickland asked, to which Waggoner replied, “Yes, exactly.”

“I’d like to thank you, director. We’ve asked everybody to look at different areas, to help us help the county, help the people, with different revenue streams, etc. This is definitely a revenue stream, you caught it and thank you very much for catching it. It will certainly help,” commission chair Bruce Jabbour stated before the item came to a vote. “They want to do this type of business, they have to pay.”

Commissioner Frank Carbone made the motion to adopt the bill, with a second from commissioner Donna Cox. The motion passed with all in favor.

The bill makes a couple of key changes to Nye County Code Title 5, including the addition of a definition for “affiliated businesses”, which are defined as cannabis establishments with identical ownership. It also adds the same two subsections to 5.32.050, 5.32.055 and 5.32.057.

“Sales and transfers between unaffiliated cannabis businesses: If the cannabis establishments engage in the sale or transfer are not affiliated, the 2% fee of the total value of the cannabis product sold or transferred is applicable and due to Nye County. The value of the product is the amount established by the State of Nevada,” the first new subsection reads. “The 2% fee is applicable regardless of the location of the unaffiliated business receiving the cannabis product, whether located within the jurisdiction of Nye County or outside of the jurisdiction of Nye County.”

The second new subsection continues, “Sales and transfers between affiliated cannabis businesses: If the cannabis establishments engaged in the sale or transfer are affiliated, the 2% fee of the total value of the cannabis product sold or transferred is not applicable, provided that both entities… are located within Nye County. The 2% fee is applicable if the affiliated business receiving the cannabis product is located outside of Nye County.”

Contact reporter Robin Hebrock at rhebrock@pvtimes.com