How to Start a Cannabis Delivery Service in Nevada

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In fall 2016, Nevada Governor Brian Sandoval signed a bill which legalized adult use aka recreational cannabis in Nevada. As of this time applications are not  being accepted for new retail businesses aka dispensaries. As of this time 47 have been issued, while a total of 66 will be allowed. New applications are currently being accepted until the 16th of January for cultivation and production facilities, so there’s still one more day left to get those in. Right now no other types of businesses (such as retail or delivery services) are being opened.

Licensed distributors are required to transport cannabis to a retail store. Retail stores are allowed to deliver to customers as long as they follow transportation rules and regulations. In order to deliver cannabis to customers, you must first own a dispensary.

Recreational cannabis sales are expected to reach 280 million by 2021. As such, obtaining a license is going to be a competitve and tricky business. Here, you will learn about how to start your own delivery service in Nevada while staying in line with the law, financial requirements.

Legalization in Nevada

When was cannabis made legal

Legalization in Nevada. Image Source: Marijuana.com

In 2013 medical cannabis was legalized. Three years later governor Sandoval signed a bill legalizing recreational cannabis.

People can begin the application process as early as this November. The law includes specific provisions for retail stores (including cannabis delivery businesses as well as dispensaries), cannabis product manufacturers, cannabis cultivators, cannabis testing facilities, and cannabis distributors.

How Many Cannabis Businesses in Nevada?

There are a specific number of permitted cannabis business licenses in each county, which is all dependent on population of that particular county. Below you can see the population range along with its corresponding number of dispensaries.

  • 55,000 people or less: 1 dispensary
  • 55,000-100,000 people: 2 dispensaries
  • 100,000-700,000 people: 10 dispensaries
  • 700,000 or more people: 40 dispensaries

Be sure to research the population of the county you would like to establish your business, as well as the number of cannabis businesses are already operating  there, to see if you can obtain a license.

The law dictates that there must be at least 10 pharmacies for every dispensary that exists within one county, except the first dispensary.

The distribution of dispensaries within a single county is also important. More than a quarter of a county’s dispensaries cannot be concentrated in one area.

Currently there are 66 dispensary licenses allowed in accordance with the above regulations. 47 licenses have already been issued, and 52 are already operational.

What is Nevada’s Market Worth?

In 2016, the medical revenue was approximately 75.6 million. Estimates say that medical cannabis sales will continue to increase, reaching around 150.4 million in 2021, while recreational cannabis sales are estimated to reach 282.2 million that same year.

 How much money is there in the dispensary market

How much money is there in the dispensary market – Image powered by Storify.com

 

Licenses will be issued starting January 2018. If you don’t already own a certified medical establishment that is also currently operating, you will not be able to successfully apply for a license until 18 months after that initial start date.

 Delivery Requirements

As long as Nevada businesses follow the aforementioned rules, they are allowed to operate in Nevada. There is still the chance that a municipality could ban or put a moratorium on dispensary licensing, hence why it’s always a good idea to be knowledgeable about local laws.

Currecntly, there are specific situations in which the delivery of cannabis is allowed in the state of Nevada. Cultivation centers may deliver cannabis to any other  cannabis establishment, except for retail stores. Production facilities may also deliver to any other licensed establishment except for retail stores.

The only facility that may transport cannabis to or from a retail store is a testing facility. Additionally, licensed cannabis distributors are allowed to deliver product to retail stores in order to be sold.

Delivery services to customers may be carried out by retail stores that are licensed properly. Deliveries can only be brought to the addresses of customers that are provided on their ID card to prove the recipient’s age. Delivery was allowed as soon as retail marijuana sales began on July 1st of 2017, although those regulations were only temporary.

Drivers may not deliver more than the legal amount of marijuana, which is currently one ounce. In general, this amount is higher than the average customer’s order, so that delivery services won’t run into issues.

Delivery services should always carry very little cash to minimize the chances of robbery, and the delivery itself should be free – the customer simply pays for the product, not the service itself.

License Requirements

Starting in 2018, licenses will be issued for the recreational program in Nevada. Applicants must have a medical cannabis establishment certificate in order to apply within the first 18 months after the starting of the year. This process is the same no matter what business you are applying to get a license for

Financial Requirements

Medical cannabis dispensary (includes delivery service)

  • $30,000 registration fee
  • $5,000 renewal fee

Medical cannabis cultivation facility

  • $3,000 registration fee
  • $1,000 renewal fee

Cannabis product manufacturer

  • $3,000 registration fee
  • $1,000 renewal fee

Testing lab

  • $5,000 registration fee
  • $3,000 renewal fee

In addition, business owners will be subjected to an excise tax rate of 2% for retail sale or wholesale of cannabis or products related to cannabis. The tax is the same for both the medical and the recreational marijuana industry.

What is My Expected Profit?

Cannabis dispensaries and delivery services generally bring anywhere from 50 thousand a year up to millions, sometimes even tens of millions of dollars. It’s important to remember that delivery services for retail stores are not paid for; only the product itself is paid for in order to comply with the current Nevada state law.

Timeframe

It can take some time to start this type of business – especially in Nevada, because there are limited licenses available. Interested business owners should allow at least a year to secure the necessary licenses and materials for their business.

Consulting Companies

These consulting firms can help you open a cannabis business in Nevada.

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