The impact of cannabis legalization in New Jersey cannabis retail license
- Decriminalization and establishment of a regulatory committee for marijuana
The first issue of legalizing the use and possession of adult recreational New Jersey cannabis retail license is reconciliation with existing laws and sanctions. In New Jersey, for example, the law presently imposes a six-month maximum sentence and a $1,000 fine for possession of 50,000 g or less of marijuana. The reconciliation is covered by three laws enacted on February 22, 2021, by New Jersey Governor, Phil Murphy. Consequently, it is now lawful for anyone aged 21 and older to own as much as six ounces of marijuana.
Governor Cuomo of New York approved legislation decriminalizing marijuana possession and establishing a mechanism for expunging records for non-violent offenses. Cuomo has been active in negotiations of legalizing adult-use cannabis since then. Cuomo recently proposed the creation of a new Office of Cannabis Management as part of a broader system to supervise and regulate cannabis in New York, modeled after New Jersey’s framework.
- Putting the finishing touches on a tax strategy
State governors and legislators understand that legalizing and regulating adult-use cannabis opens up a lucrative income stream. For example, New Jersey’s proposed taxation plan calls for a 6.6 percent state sales tax on marijuana sales, which would generate over $2 billion in an income year after the market matures, with $126 million in tax revenue. Local governments also have the option of imposing an additional 2% sales tax.
Furthermore, to address historical racial disparities and statistical evidence that Black Americans are at least 3.6 times more likely to be charged with marijuana possession, New Jersey legislation includes a “social equity” excise tax on cannabis purchases to fund communities impacted by prohibition. The excise charge, on the other hand, is voluntary, which means the Cannabis Regulatory Commission can reject it, and the bill does not identify which areas will benefit from the excise tax. If the Commission passes the excise tax, the money will go to social equality initiatives including educational assistance, economic development, social support services, and legal help.
It’s unclear what New Jersey’s legalization means for cannabis usage and possession in its widely accessible New York neighbor less than 10,000 feet over the Hudson River unless New York decides to follow ahead with its intentions to fully legalize adult-use recreational marijuana. Governor Cuomo’s plan appears to be modeled after New Jersey’s structure in many ways. When the time comes, it will be fascinating to observe where they vary.