Licensed cannabis retail stores and medical dispensaries generated just under $1 billion in taxable sales during fiscal year 2022 — a decrease of roughly 4% compared to the previous year — and the average retail price per gram of marijuana flower was $7.18 in 2022 — a decrease of 19%.
“This is the first time that cannabis sales in Nevada have declined since we legalized cannabis for adult use,” said Tyler Klimas, executive director of the Nevada Cannabis Compliance Board (CCB).
This is a trend also seen in other states, he said.
“When a state legalizes cannabis for adult use, the first few years, it’s new, it’s exciting. It’s something that wasn’t available before. And it’s consistent with other mature cannabis markets, so other states that legalized cannabis, either at the same time we did or before us for adult use, we’re starting to see sales numbers come a little bit back down to Earth,” Klimas said.
While the pandemic caused an increase in cannabis sales, Klimas said the industry is now seeing sales drop.
“So COVID kind of sent everybody home. The stimulus package put an extra discretionary income in people’s pockets. And as a result of that, we saw a further 50% growth year in sales,” Klimas said.
But there are also other factors behind the decline in sales and falling prices. While oversupply has been an issue in legal cannabis markets across the country, Klimas said the number of plants cultivated in Nevada has remained fairly consistent for the last two years.
“Really, what we’re looking at and in our analysis is that the economy is struggling a little bit. People don’t have as much discretionary income as they usually do. Cannabis turns into a want to have rather than a need to have. And so there’s just less money in a consumer’s pocket to purchase cannabis. Or you see dispensaries having to do more deals, and that’s lowering the price of flower,” Klimas said.
Cannabis consumption lounges are expected to boost the industry. The CCB said lounges are expected to open on a rolling basis through 2023, mainly in Southern Nevada.