Implementing  fully  legalized  marijuana in Nevada should be tough and presents challenges.

Nevada’s nascent  medical marijuana program is run by the Nevada Department of Health and Human Services. Pursuant to the initiative voters passed last November, however,  Nevada’s new recreational marijuana program will be run  by a different agency,  the Nevada Department of Taxation,  which  has no institutional experience in administering a marijuana program.

Under the initiative, the department is given broad powers to set marijuana wholesale prices; establish requirements and issue licenses for five different types of marijuana licensees; do background checks; set requirements for packaging, testing, recordkeeping, signage, taxes and fees. The powers and duties of the Department of Taxation are exhaustively   listed in the initiative and cover two pages. This  monumental undertaking  requires  the department  to draft all regulations and “staff up” by  Jan. 1, 2018.

Implementing marijuana legalization in Colorado required the hiring of more than 50 full-time employees in that state’s Department of Revenue and a total of 120 new hires at all levels of government. Colorado struggled but met its initiative imposed one year deadline on retail sales. Similarly, California “promises to be operational” by January 2018. But the legislature in Massachusetts, citing complications,  voted to delay their marijuana deadline  for six months  to July 1, 2018.

Nevada’s Department of Taxation has  just now hired  four employees  to draft regulations and administer the state’s recreational  marijuana program. It  plans to hire an additional 12 individuals in July. Meanwhile, the department has  stated an  intention for “early start” retail sales to begin  July 1, 2017 using “temporary regulations.” Pressure from the commercial marijuana industry and state officials to get retail sales started immediately  is intense. Retail  sales means profits for the industry and revenue for the state to recover costs  incurred in “staffing up.”

Nevada’s  new marijuana “regulator” has a duty  is to protect the health and safety of Nevadans. Will a staff of 16 employees  be able to draft tough, comprehensive regulations limiting advertising, pot potency, restricting edibles, prescribing packaging, among their myriad duties? Colorado required  more than three times as many  full time  employees to administer their marijuana start-up program. At a time when Massachusetts is postponing its “start date,” Nevada is advancing  ours. Will Nevadans be protected by adequate regulation and enforcement?

Gov. Brian Sandoval proposes a new retail excise tax of 10 percent on marijuana retail sales coupled with the 15 percent wholesale  tax provided for in the initiative. Under Sandoval’s proposal, a Clark County  retail marijuana purchaser would absorb a combined wholesale and retail tax of 25 percent plus a local sales tax of 8.15 percent. This total tax cost of 33.15 percent would result in a large black market.

Colorado is actually reducing its retail marijuana tax from 10 percent to 8 percent effective in July  after a state-sponsored study substantiated the black market effect. Gov. Sandoval’s retail  marijuana tax revenue  forecast of $50 million annually is also  extremely  optimistic based on the Colorado experience where first year marijuana  taxes were barely half the amount projected.

Marijuana remains illegal under the federal Controlled Substances Act, classified a Schedule 1 drug and found to be without valid medicinal applications and a high potential for abuse. The Obama administration’s  DEA director reaffirmed that classification last August.

President Trump’s new Attorney General, Jeff Sessions, has been an outspoken critic of  legalizing marijuana. The only thing keeping federal agents from enforcing federal law is the 2013 Justice Department “Cole memorandum” making marijuana a low priority and permitting localities and states to enforce their own laws. Sessions has full authority to withdraw that memorandum and pursue a different policy.

Nevada policymakers  should not get addicted to the false “pot of gold”  lure of marijuana tax revenues.  Marijuana taxes will not likely cover the full costs of legalization—including regulation, enforcement, public health and safety and substance abuse treatment.

Jim Hartman is an attorney residing in Genoa, Nevada and president of Nevadans for Responsible Drug Policy