Weed Shortage: Nevada Running Out Of Marijuana, Governor Declares Taxation 'State Of Emergency'

Nevada’s governor and the state’s department of taxation have issued a “state of emergency” to create a structure for recreational marijuana regulations as many stores say they’re running out of weed.

Nevada’s taxation department issued a “statement of emergency” endorsed by Republican Gov. Brian Sandoval as they look to expand the pool of legalized distributors that would allow liquor wholesalers to get in on the marijuana business. The liquor industry had previously sued the state in order to gain access to marijuana distribution sales.

Read: Nevada Legalizes Recreational Marijuana Sales, What Other States Have Legal Weed?

"Based on reports of adult-use marijuana sales already far exceeding the industry’s expectations at the state’s 47 licensed retail marijuana stores, and the reality that many stores are running out of inventory, the Department must address the lack of distributors immediately," the statement said. "Some establishments report the need for delivery within the next several days."

Department of Taxation spokeswoman Stephanie Klapstein told the Reno Gazette-Journal that most liquor wholesalers “don’t yet meet the requirements that would allow us to license them.” Nevada’s alcohol wholesalers were given exclusive rights to distribute pot as a compromise to their concerns marijuana will cut in on liquor sales and profits.

The Nevada Department of Taxation plans to vote on the plans through an emergency measure on Thursday.

Nevada has nearly 50 legal dispensaries to sell pot, but stores don’t have the authority to resupply their inventories of marijuana when it runs out – which it did. Nevada’s cannabis customers flocked to stores for so much marijuana that retailers sold out in less than 10 days since the July 1 start date.

Public Schools Budget At Stake Over Marijuana Taxation Revenue

The taxation department warned in a statement that demands of the market need to be met because the state’s school budget is at stake.

"The business owners in this industry have invested hundreds of millions of dollars to build facilities across the state,” reads the statement.

The statement continues: “They have hired and trained thousands of additional employees to meet the demands of the market. Unless the issue with distributor licensing is resolved quickly, the inability to deliver product to retail stores will result in many of these people losing their jobs and will bring this nascent market to a grinding halt. A halt in this market will lead to a hole in the state’s school budget.”

Revenue collected from the 15 percent cultivation tax goes toward schools, while the 10 percent sales tax revenue goes toward the state's rainy day fund. The Nevada Dispensary Association estimates around $3 million in first-week sales after state voters approved recreational marijuana in November.