New Jersey Legalization Bill Reportedly Sets Nation's Lowest Tax on Legal Marijuana
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New Jersey, notorious for being among the highest-tax states in the Union, is considering a 10 percent tax on legal marijuana sales in legislation taking shape behind closed doors. If enacted, that would be the lowest tax rate on legal marijuana in the nation.
The bill in its current would also allow allow marijuana retailers to provide spaces for customers to consume what they buy on the premises, which no other state now allows, and to make deliveries, which is now legal in California, Nevada and Oregon. Unlike many other states, growing marijuana for personal use would remain illegal in the Garden State.
According to a recent report in NJ Advance Media, the bill as currently written would make the 10 percent tax rate permanent, unlike previous drafts that included provisions gradually raising the tax as high as 25 percent, the rate favored by Gov. Phil Murphy. The current bill reportedly is co-sponsored by Senate President Steve Sweeney, one of the state’s most powerful political leaders and an antagonist of the governor on tax and budget matters.
Both Sweeney and Murphy are Democrats, as is the majority of lawmakers in both chambers of the Legislature.
The current draft of the bill also allows local governments to place a 2 percent on marijuana. According to other recent reports, New Jersey mayors have pressed for a 5 percent local tax and much greater focus on addressing social justice issues, particularly economic opportunity in low-income neighborhoods and expungement of marijuana criminal convictions.
The current draft bill would mandate 25 percent of licenses be awarded to women, minorities or veterans and would set no legislative limit on how many permits could be issued. Previous versions of the bill set a goal of 25 percent permits for those demographics. Whether the set aside will be a mandate or a goal is reportedly still being negotiated. The bill reportedly gives preference to locating retailers in neighborhoods with high unemployment rates and sets aside 10 percent of permits as “micro-permits” intended to favor small businesses.
While the legislation will create the foundation of a legal marijuana industry in New Jersey implementing the law would be delegated to a five-member Cannabis Regulatory Commission. While the legislation doesn’t set a limit on marijuana retail licenses, the commission could. New Jersey has a strong home-rule tradition, with laws to back it up, and at least 30 municipalities have already passed ordinances banning marijuana retailers.
The bill has not been released publicly and is subject to further negotiations and amendments.