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New Jersey Takes a Big, and Long Awaited, Step Toward Full Legalization

There are few active opponents but many key legalization advocates see shortcomings in the legislation.
New Jersey Takes a Big, and Long Awaited, Step Toward Full Legalization
Image credit: Bulat Silvia | Getty Images
Entrepreneur Staff
4 min read

A joint committee (OK, go ahead and make jokes) of the the New Jersey Legislature voted Monday to approve a bill to legalize cannabis in the Garden State and create a regulatory structure for what is expected to soon be an enormous new industry.

While the committee vote is a big step, there are still powerful opponents in the state Senate, activists are unhappy over what the bill doesn’t do and Gov. Phil Murphy has not signaled support for legislation that sets a tax rate half of what he’s publicly said is needed. Estimates of new tax revenue range from $350 million yearly all the way up to $1 billion, depending up what tax rate is imposed.

The sweeping 147-page New Jersey Cannabis Regulatory and Expungement Aid Modernization Act will, if enacted, legalize possession of up to one ounce of marijuana by adults at least 21 years old. It creates a fulltime, five-member regulatory board and imposes a 12 percent tax a commercial marijuana industry in the state. Municipalities could collect another 2 percent excise tax.

The bill was not met by cheering from activists who are concerned that, while it sets in motion a process of expunging criminal records for minor marijuana crimes, it doesn’t specifically allow those convicted of selling marijuana illegally from owning or working in a legal marijuana retail operation.

"We all know who's getting the licenses, and it's not people like me -- who have sold marijuana. We're not going anywhere, so what are you going to do with us," Ed Forchion, known as Weedman in New Jersey, told the Asbury Park Press. "I don't want to get arrested again. I don't want to go to jail again. But the day you pass this bill, I will be emboldened to sell marijuana (on the black market) -- just like the white guys."

Related: This Is Non-Negotiable: Cannabis Legalization Must Include Restorative Justice

Other activists complained the bill would make New Jersey just the second state, after Washington, to allow legal adult-use marijuana but forbid residents from growing their own plants. The New Jersey ACLU noted the bill does not address people currently serving prison sentences for marijuana offenses.

Governor Murphy, who made legalization central to his campaign last year, was conspicuously noncommittal after the committee vote. Murphy as pushed for an excise tax of up to 25 percent on legal marijuana. “I’m encouraged that it’s moving in the right direction, and it’s too early to tell as it relates to exactly the elements that ultimately are in there," Murphy told "We’ll see, but I'm happy to see the progress.”

Three other bills under simultaneous consideration, and expected to pass, will expand the state’s current medical marijuana industry and simplify the process of expunging the criminal records of countless state residents busted over the decades for minor marijuana crimes. The new Cannabis Regulatory Commission, led by five members appointed between the governor and the Legislature, would include an Office of Minority, Disabled Veterans, and Women Cannabis Business Development.

Related: Here's Where Colorado Spends Its Skyrocketing Pot Tax Revenue

The bill sets a goal of 30 percent participation from these "socially and economically disadvantaged communities." To level the competitive landscape, the bill sets aside 10 percent of licenses for "micro-businesses" of fewer than 10 employees. The law will also allow the commission discretion to favor businesses locating in “impact zones,’’ which are mostly the state’s urban areas with high unemployment and a long history of social problems stemming for the drug trade and aggressive enforcement of marijuana prohibition.

A provision in the bill will require applicants for cannabis business licenses to sign an agreement to hire workers represented by labor unions, with exceptions for micro-business owners. The bill also strikes the word "marijuana" from New Jersey legal code, replacing it with "cannabis" in reference to the legal market.

Negotiations between the governor and legislative leaders, all of whom are Democrats but not necessarily allies, are expected to continue until the legislative package comes to votes of the full Assembly and Senate, presumably before Christmas.

By Javier Hasse
From retailers to growers, producers, and suppliers, there’s a seemingly never-ending list of startup opportunities in this emerging market. In Start Your Own Cannabis Business, marijuana, biotech, and entrepreneurship reporter Javier Hasse introduces forward-thinking entrepreneurs like you to the industry and shares hard-earned tips and success stories from pioneers and visionaries in the marijuana industry.
Learn More

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