NEWS
New Jersey Lawmakers Cancel Adult-Use Retail Bill Votes Over Tax Concerns
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New Jersey voters legalized weed during this year's election, but sales cannot begin until state lawmakers pass a bill to regulate retail sales.
Published on November 13, 2020

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Things are getting sticky in the Garden State. New Jersey legislators were hoping to pass a bill to regulate the state's newly-legal adult-use cannabis market within two weeks of Election Day, but the bill has been officially delayed over tax concerns. 

Last week, New Jersey voters said yes to a ballot measure legalizing adult-use cannabis sales in their home state, as did voters from Arizona, Montana, and South Dakota. But before sales can officially begin in the Garden State, lawmakers must pass a bill to establish regulations for this new retail market. Both chambers of the state legislature planned to vote on this bill next Monday, but the vote has just been tabled.

At the beginning of this week, the bill advanced through a key state Senate committee, and a second critical committee vote was scheduled for Thursday. This vote was cancelled, however, so that lawmakers could come to a consensus regarding sales taxes. “The cannabis regulatory enforcement bill is being held,” Assembly Appropriations Committee Chairman John Burzichelli said on Thursday, Marijuana Moment reports. “Negotiations and fine-tuning are still underway on that topic.”

The main issue holding up the vote is taxes. The higher the tax imposed on legal weed sales, the more money the state can use to fund restorative justice measures promised by the voter-approved measure. But if taxes are too high, legal weed could end up being so expensive that consumers will continue buying cheaper black market pot. The current bill proposes a 6.625 percent state sales tax, plus an optional 2 percent local tax, but advocates are arguing that this will not generate enough revenue to fund restorative justice programs.

"The voters gave their view," said state Assemblymember Shavonda Sumter, vice chair of the Legislative Black Caucus, to FOX5NY. "We need to see enabling legislation that allows money to go to restorative justice for all the gross, negligent inequities of the War on Drugs." The caucus is pushing for as much as 70 percent of weed tax revenue to be used to fund programs to prevent violence and support families in underserved communities.

Governor Phil Murphy and Assembly Speaker Craig Coughlin have said that they support adding an additional excise tax to weed sales to help raise funding for these programs. An earlier version of the legalization bill suggested adding a flat $42-per-ounce tax on legal pot, but this tax is not included in the current legislation. Other lawmakers have argued that the added tax will make it difficult for legal weed retailers to compete against the black market.

"If we get the tax formula wrong, the only people who are going to win will be the bad guys on the street," said Burzichelli, FOX5 reports. The current draft of the bill also bans home cultivation of pot for fear of black market diversion, but critics are arguing that the state should not allow cops to keep busting people for growing pot at home.

These debates have delayed the vote, but lawmakers are still hoping to resolve the issue and advance the bill sometime next week. The voter-approved measure will become law on January 1st of 2021, and if the state legislature has not passed a regulation bill by then, the state will be trapped in a legal grey area where personal pot use and consumption are legal, but sales are not – similar to what has happened in Washington DC.

Lawmakers are confident that they will be able to avoid this situation, though. State Senator Nicholas Scutari, sponsor of the adult-use regulation bill, has proposed a solution to allow the state's existing medical cannabis dispensaries to sell recreational weed until dedicated adult-use businesses can open their doors. The current bill would allow each medical marijuana business to open two new cultivation facilities apiece to increase the available supply of pot.

“There’s no reason why, in the next 90 days, they can’t grow any more product and get it out on the shelves,” Scutari told Marijuana Moment. “I mean, not saying they will, but they could — it’s not a physical impossibility.”

Non-medical use of cannabis remains technically illegal until January, but lawmakers have called for police to stop arresting people for minor weed crimes during the final two months of prohibition. Last week, state Assemblymember Jamel Holley argued that all weed arrests should be ended immediately, as the majority vote on legalization clearly indicates that “there is no patience anymore for prosecuting people caught smoking and possessing marijuana.”

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Chris Moore
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Chris Moore is a New York-based writer who has written for Mass Appeal while also mixing records and producing electronic music.
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