Still reeling from the recession, Nevada is getting a much-needed boost to its education budget.
The state’s legal cannabis industry reported nearly $1 billion in taxable sales over the last fiscal year, according to figures released by Nevada’s Department of Taxation.
Of that revenue, $147 million will go toward K-12 education. The money comes from two different sources: a 10 percent retail adult use excise tax (which brought in $89 million) and a portion of the 15 percent wholesale tax for adult and medical use (which brought in $63 million).
The PCFP
Nevada’s PCFP ensures every child in Nevada receives the support they need to succeed.
The Pupil-Centered Funding Plan (PCFP) is a state law that was passed in 2019 and modernizes Nevada’s 54-year-old funding formula. It prioritizes equity by funding students based on their unique needs and circumstances while building a solid foundation for our education system so that students continue to receive the support they need regardless of fluctuations in the economy over time.
Nevada’s PCFP has three tiers of funding (per the State of Nevada):
Tier A – State Administration: Funding will be allocated to the Nevada Department of Education to support the administration of statewide education programs.
Tier B – School Operations: Funding is allocated to districts for food services, transportation, and similar operations deemed appropriate by the Legislature.
Tier C – Per-pupil-based funding: Per-pupil funding will be guaranteed to every student, regardless of what school they attend, distributed equitably on the basis of estimated attendance, zone enrollment, cost of living, labor and geography.
Tier D – Weighted Funding: Funding above and beyond the adjusted per-pupil base to meet the distinct needs of individual students.
While the program is still in its infancy, the $147 million from cannabis sales will certainly prove to be an impressive contribution.
Cannabis In Nevada
When Nevada legalized recreational cannabis in 2017, the state had a lot to learn about running a legal industry. The first year of sales saw $530 million in product sold and close to $70 million in excise tax revenue collected by the state.
Since then, though, things have changed. In late 2019, Nevada saw a pandemic that resulted in several deaths and increased demand for cannabis products. The resulting sales were great for dispensaries but have since fallen off as restrictions have loosened. Still, though, businesses are facing economic challenges that are unique to this industry and will not be resolved until Congress takes action — and even then, it may be too late for many companies already struggling to stay afloat due to the federal ban on cannabis.
The increase in taxes and lack of revenue has left many businesses and activists frustrated with a system that they say already works against them. Earlier this year, several cannabis companies spoke out against what they saw as excessive fees for standard regulatory tasks and wholesale taxation formulas that do not keep up with price changes. Some even claim that these taxes are pushing consumers to the black market, a competitor most industries don’t have to deal with.
The Nevada cannabis industry has become a significant part of the state’s economy. The industry has generated over $147 million in taxes this year alone, which is more than twice what it did last year. This money will go towards funding education programs in Nevada.
This is a good thing because education is one of the best investments one can make. It pays off in the future and helps ensure that we have a well-trained workforce, as well as citizens who will be able to participate in our democracy and make informed decisions about their lives and communities.
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