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Why Nye County cannabis companies could soon pay more to operate here

When Nye County made the decision to allow for marijuana businesses to operate locally, one thing was made clear; the action was meant to provide a new revenue source for the county. However, Nye County’s licensing fees and even its sales and transfer fees are much lower than those of similar jurisdictions and the Nye County Commission is now moving to see that change.

The commission addressed an item on Aug. 15 brought forth by the Nye County Planning Department requesting feedback as to any potential fee increases.

Nye County Assistant Planning Director Steve Osborne said the department had already conducted some research into the licensing and renewal fees charged in other areas of the state, providing a comparison for the commission’s consideration.

For example, cultivation facilities in the cities of Las Vegas and Mesquite are charged $20,000 for their initial license while Henderson and North Las Vegas both charge $60,000.

In Nye County, that same charge is only $5,000. Much the same is evident across the board, with Nye County at the lowest end of the initial licensing fee structure on production facilities and dispensaries, too.

When it comes to renewal fees, Osborne said a majority of jurisdictions charge a semi-annual fee of 3% of the business’ gross revenue while Nye County’s renewal fees are a flat amount of $2,500 for cultivation or production facilities and $7,500 for dispensaries. In terms of fees for sales and transfers, Nye County charges 2% of gross revenue when most of other jurisdictions charge 3%.

“For Nye County, all of the cannabis establishments, their total gross revenue was $23,650,000 in 2022. So Nye County, the 2% (sales fee) we receive from that is $473,000 for 2022. If we were to increase that 2% to 3%, which is the maximum allowed under state law, that would then bring it to $709,000 for a $236,000 increase per year,” Osborne detailed.

Special to the Pahrump Valley Times Nye County is considering how to structure fee increases fo ...
Special to the Pahrump Valley Times Nye County is considering how to structure fee increases for the cannabis industry, with the current renewal and sales fee revenue shown in comparison to what various options would bring in.

Closer look

In 2022 renewal fees total $65,000 and when adding this it, the county received $538,000. If the county were to switch to a flat 3% fee with no “renewal” fee, the total would have been $709,000. With renewal fees and a 3% fee, it would bring it up to $774,000.

“This one has been near and dear to my heart,” Nye County Commissioner Ron Boskovich stated as the discussion got underway. “[Cannabis companies] should at least be paying what they pay in the other jurisdictions.”

Commissioner Frank Carbone predicted an outcry from the local cannabis industry but this did nothing to deter his stance.

“I like the idea of moving forward with what we have here,” he remarked.

Commissioner Debra Strickland said she too would like to see Nye County’s fee and tax structure align more closely with other areas and Carbone proposed a 3% sales fee, plus a 2% transfer fee, plus a renewal application fee to cover those businesses that don’t produce any revenue and therefore do not pay the sales taxes or transfer fees.

Nye County Planning Director Brett Waggoner interjected to suggest another option, allowing for a minimum renewal fee of $2,500 or 3% of gross revenue, whichever is greater. “If they retain their license for the year and they produce zero, you could have that flat fee. But if they were a producer and paying the 3% throughout the year, and actually doing what they are intended to do, then that $2,500 flat fee goes away,” Waggoner said.

The precise nature of the cannabis licensing and sales fees increase is not yet nailed down but Waggoner said he felt he had a good grasp on what the board was wishing to see. Waggoner will return to the commission with a workup of the potential new tax and fee structure, based on the comments made that evening.

“My understanding from looking through history, the reason we have (cannabis) licenses in Nye County is to be a revenue source. It wasn’t supposed to be the bargain spot in the state,” Waggoner asserted. “So I do believe we ought to take advantage of that whole reasoning as to why they (pot businesses) are here in the first place.”

Contact reporter Robin Hebrock at rhebrock@pvtimes.com

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