CANNAINVESTOR Magazine December / January 2016 - Page 13

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Nevada Voters Legalize Recreational (Adult-Use) Cannabis

The combination of shifting public opinion and success experienced over the past two years by legal medical and recreational cannabis states has given rise to the passage of new cannabis regulations and has offered voters the confidence to pass new legislative initiatives, as reflected by the outcome of the 2016 elections. In the recent November elections, Nevada residents voted to legalize recreational cannabis, a move that enables the state's 42 million yearly visitors to purchase and consume marijuana legally.

Recreational cannabis in Nevada is estimated to generate more than $1.1 billion in tax revenue and economic activity over the course of the law's initial eight years, according to a study by Las Vegas-based RCG Economics. For the first 18 months after the legalization of recreational marijuana, current medical marijuana state registration certificate holders (dispensary owners) will have priority on building new facilities for recreational marijuana. That includes new dispensaries, cultivation and testing facilities, and manufacturing facilities for paraphernalia.

Evolution as a Market Leader

After months of planning, Digipath President and Chief Operating Officer, Todd Denkin, opened the Company’s flagship Las Vegas cannabis testing facility, Digipath Labs, in May 2015. The Company strategically chose the Las Vegas location due to Nevada’s implementation of the nation’s most stringent policies on cannabis safety, as the Company’s dedication to reliable, replicable testing results fit perfectly with the State’s goals for patient safety.

Digipath Labs began earning substantive revenue in October 2015 and has now tested more than 5,500 cannabis product samples, representing over 25,000 pounds of cured flower, from many of the 51 growers and 27 production facilities in Clark and Nye Counties (the counties in which Digipath currently operates) licensed by the State of Nevada. The Company continues to add new customers as they come online and works with The Association of Commercial Cannabis Laboratories and the Coalition for Responsible Cannabis Production to instill good laboratory standards and practices around the country. The number of potential customers for Digipath in Clark County in Nevada has more than doubled in 2016 to 72 licensed operators (47 cultivation facilities and 25 production facilities).

In addition, Nevada’s policy of reciprocity, i.e. accepting medical marijuana (MMJ) patients from out of state, positions Nevada to become among the largest and fastest growing MMJ markets in the country. Recreational legalization will also have a highly favorable long-term impact. In November, voters followed in the footsteps of states like Colorado and Washington in legalizing adult-use marijuana. The move opens the door to Nevada’s 42 million yearly visitors to purchase and consume marijuana legally, raising tax revenue and creating significant opportunities for businesses.