Key takeaways
A state study looked at dropping Nevada's 15% wholesale cannabis tax and making up the money at the register.
To stay revenue neutral, the 10% retail excise tax would need to rise to 12% to 15%, the study found. It made no recommendation on whether to do it.
The Joint Interim Standing Committee on Revenue heard the report on Oct. 21, 2026 and took no action.
Retail flower prices fell from about $9.02 to $4.46 per gram between 2019 and 2025, part of why cannabis tax revenue keeps sliding.
Nevada is taking a serious look at how it taxes cannabis, and the idea on the table would move the tax bill from cultivators to the checkout counter. If lawmakers pick it up, growers, dispensaries and shoppers would all feel it differently.
A subcommittee of the state's Cannabis Advisory Commission studied the Nevada cannabis wholesale tax swap under Section 54.7 of Assembly Bill 76 (2025). Its final report went to the Joint Interim Standing Committee on Revenue, which discussed it at its Oct. 21, 2026 meeting.
How Nevada taxes cannabis today
Since adult-use sales began in 2017, Nevada has charged a 15% excise tax on the fair market value of cannabis at its first wholesale sale, plus a 10% excise tax on adult-use retail sales. Regular state and local sales tax, from 6.85% to 8.375% depending on location, applies on top.
Medical patients skip the 10% retail excise tax, but the report notes the wholesale tax is usually built into shelf prices, so patients pay part of it anyway. Cultivators have long argued that the state's "fair market value" formula lags behind falling prices, Nevada Current reports, leaving them overtaxed.
Why cannabis tax revenue keeps falling
The report ties the decline to price compression in a maturing market. Average flower prices dropped about 50.5% from 2019 to 2025, and infused edibles fell from about $19.77 to $11.81 per unit. Over the same stretch, the number of customers and transactions kept rising.
Money sent to the State Education Fund peaked at $159 million in fiscal year 2021. By fiscal year 2025, the state collected $111.8 million in combined cannabis excise taxes and transferred $95.8 million to schools, a 40% drop. Fiscal 2026 figures, not final when the report was written, show $103.8 million.
What the Nevada cannabis tax study modeled
Using seven years of Metrc sales data, the subcommittee estimated how shoppers respond to price changes. Using fiscal 2025 as the example, cutting the wholesale tax would take roughly $21 million out of the State Education Fund.
Retail excise rate | Modeled drop in taxable sales | Extra retail excise revenue |
|---|---|---|
12% | 1.8% to 2.8% | $11.8M to $12.7M |
15% | 4.3% to 6.8% | $28.3M to $30.9M |
20% | 8.3% to 12.9% | $52.8M to $59.3M |
Two assumptions matter. The model assumes full pass-through of the tax to shoppers, and it assumes wholesale prices won't drop right away because cultivators would keep the old 15% as margin. It doesn't model illicit-market shifts, cross-border buying or store closures.
"The subcommittee does not make a recommendation as to whether the Wholesale Cannabis Tax should be eliminated."
Pushback from retailers
Deep Roots Harvest, which runs 14 dispensaries in Nevada, sent the committee a letter opposing the shift. It argued that if wholesale prices hold, shoppers pay more at the register, and it pointed to two straight years of 8% market contraction.
According to Nevada Current, Cannabis Compliance Board Executive Director Michael Miles told lawmakers the change isn't guaranteed to even out, though the idea is that it should. The committee took no action, lawmakers asked for more data, and the issue may come back in 2027.
What this means for operators
Model both sides. Cultivators and retailers land differently under this swap. Run your margins at a 12% and a 15% retail excise rate.
Watch the hemp piece. The report puts Nevada's intoxicating hemp market at roughly $43 million a year and recommends taxing it at the same rate as cannabis, with Cannabis Compliance Board oversight.
Track local money. The wholesale tax funds $5 million in local government distributions and part of the CCB budget. The report says lawmakers would have to replace or review both.
Get on the record early. The committee took no action, so this is still at the study stage. If you want a say, talk to your legislators and trade group before the 2027 session.
What this means for cannabis workers
Nothing changes on your paycheck today. But tax structure shapes store traffic and wholesale prices, which drive staffing decisions on both sides of the supply chain.
If you work the counter, expect questions if retail tax rates change. Medical patients, about 4% of sales in the data, are exempt from the retail excise tax, so the report expects them to see little short-term impact.
Related on The Weekly Joint: Delaware's THC beverage law and the federal hemp sunset · More Nevada coverage · Browse all issues
Sources
This article is general information, not legal or tax advice. Questions about current filings go to the Nevada Department of Taxation.
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