Revises provisions governing the taxation of sales of cannabis and cannabis products. (BDR 32-149)

Existing law imposes an excise tax upon the first wholesale sale of cannabis by a medical cannabis cultivation facility or an adult-use cannabis cultivation facility to another cannabis establishment at the rate of 15 percent of: (1) the fair market value at wholesale for sales made to an affiliate of the medical cannabis cultivation facility or adult-use cannabis cultivation facility; or (2) the sales price of the cannabis, if the sale is made to a cannabis establishment that is not an affiliate of the medical cannabis cultivation facility or adult-use cannabis cultivation facility. Existing law requires the revenues collected from those excise taxes to be distributed: (1) to the Cannabis Compliance Board and to local governments in an amount determined to be necessary by the Board to pay the costs of the Board and local governments in carrying out the provisions of existing law governing the medical and adult use of cannabis; and (2) if any money remains, to the State Treasurer to be deposited to the credit of the State Education Fund. (NRS 372A.290) Section 5 of this bill eliminates those excise taxes on wholesale sales of cannabis. Existing law imposes an excise tax on each retail sale of cannabis or cannabis products by an adult-use cannabis retail store or cannabis consumption lounge at the rate of 10 percent of the sales price of the cannabis or cannabis products. Under existing law, the revenues collected from that excise tax are required to be paid over as collected to the State Treasurer to be deposited to the credit of the State Education Fund. (NRS 372A.290) Section 5 increases the amount of the excise tax on retail sales of cannabis and cannabis products from 10 percent to 14.25 percent of the sales price of the cannabis or cannabis products. Section 5 additionally requires the revenues from that excise tax to be distributed: (1) to the Cannabis Compliance Board in an amount determined to be necessary by the Board to pay the costs of the Board in carrying out the provisions of existing law governing the medical and adult use of cannabis; and (2) if any money remains, to the State Treasurer to be deposited to the credit of the State Education Fund. Sections 1-4 of this bill revise provisions relating to the excise tax on cannabis to reflect the elimination of the excise taxes on wholesale sales of cannabis in section 5. Section 6 of this bill revises provisions setting forth the sources of revenue for the State Education Fund to eliminate references to the excise taxes on wholesale sales of cannabis. Section 7 of this bill repeals provisions requiring the Department of Taxation to establish procedures to determine the fair market value at wholesale of cannabis, which are rendered obsolete by section 5.

• Cecelia GonzálezD