Will Recreational Cannabis Boost Revenues as New Jersey Takes its ‘Historic Step’ on April 21?
Recreational marijuana is coming to New Jersey — bringing with it hopes of a robust new tax revenue stream — but some officials have a blunt assessment of its initial financial impact.
Recreational marijuana sales in the Garden State for those 21 and older will begin on April 21, 2022, Gov. Phil Murphy said in a Thursday tweet. The announcement came only three days after state regulators approved permits for seven facilities to begin selling recreational marijuana, WHYY reported. The facilities already sell medical cannabis.
Murphy called it a “historic step” in the state’s effort to create a new cannabis industry.
Retail licenses could be issued within a month, but only after approved alternative treatment centers pay the necessary fees and undergo compliance assessments.
In November 2020, New Jersey voters approved a referendum to legalize marijuana, The New York Times reported. About a year ago lawmakers adopted a bill that made specific quantities of cannabis legal and also laid out parameters for the industry.
So what kind of financial impact will the industry have? That’s still an open question. But for now, lawmakers have a conservative take on the amount of money recreational marijuana will bring in.
Murphy’s fiscal year 2023 budget, which is pending in the state legislature, estimates recreational marijuana revenues of only $19 million in a budget that totals nearly $49 billion. That’s much lower than the $60 million estimated in 2019 before recreational marijuana was approved by voters.
Lawmakers have proposed a 6.625% sales tax on recreational marijuana, with 70% of the proceeds going to areas disproportionately affected by pot-related arrests. Black residents, for example, are up to three times likelier than white residents to face marijuana charges. Individual municipalities also have the option of levying a sales tax of up to 2%.
More important to some leaders is the potential social impact of legal recreational marijuana.
“We remain committed to social equity,” New Jersey Cannabis Regulatory Commission Chair Dianna Houenou said in a statement. “We promised to build this market on the pillars of social equity and safety. Ultimately, we hope to see businesses and a workforce that reflect the diversity of the state.”