NJ Cannabis Legalization Deal Met

February 20, 2019

In the state of New Jersey there has been a large rate of opposition to progressing into the attempted nationwide standard of legalizing marijuana for both medical and recreational use. In the previous months since the announcement of potential legalization during Phil Murphy’s “100 days in office” we have seen very little progress in coming to a set bill that would allow for legalization due to contrasting opinions from elected officials.

To provide you with a full understanding of the recent changes, it is important for us to highlight the issues and features the original bill proposed.

The Issues

When it comes to the debate of legalization in New Jersey there’s no denying the democratic influence that will help usher the way for solidifying the passing of recreational marijuana. The issues have arisen from the inability to create a proposed bill that would work to satisfy both the lawmakers and Phil Murphy’s large expected sales tax.

The original bill proposed offered a regulatory Marijuana tax of only 12%, sitting in the middle of most major states who have recently legalized it in the past. This tax percentage didn’t sit well with Governor Phil Murphy, as he wanted the tax to be around 25%, bringing concerns from other lawmakers that the price would be too high to justify users from going to their individual dealers.

Unfortunately, this created a standstill due to the hesitation to propose the bill when still uncertain of its ability to pass on it’s first sitting. The fear was that Murphy would reject the proposal due to the lowered tax which would allow others to see his disapproval of the bill and follow suit in rejecting it. If it were to be rejected, the whole process would have to begin again which would set back the timeframe of legalization to a point outside of relevance. The bill was put on hold while a new deal was met to appease both the lawmakers and provide Murphy a resolve to his tax demands.

The Proposed Bill

The structuring of the proposed bill would allow for a multitude of new aspects for everyone purchasing recreational.

Overview

The Bill proposed would set a regulatory state-wide age of 21 to be able to purchase and consume cannabis in New Jersey. The Bill creates and regulates a new tax that would allow NJ to issue a state tax on the purchase of all cannabis as it will be considered a commercial industry.

Legal Smoking Areas

The bill would allow for the creation of legal designated smoking areas where the public consumption of marijuana would be accepted. Currently the only location for the legal consumption of marijuana in most states is within the confines of a home or residence. NJ’s bill plans to change this and create designated smoking spots inside the dispensaries. This would require the individual retailers to get a permit for consumption at its location.

Delivery

Probably one of the most anticipated aspects of the bill, outside of the legalization of course, is the ability for delivery to a residential address. Businesses with a marijuana retail license will be allowed to request permission to support deliver personnel to deliver cannabis to the buyer’s house. Think uber eats, for pot.

Making the Rules

With the commercialization of recreational marijuana, the need for a regulatory board will be required to keep up with the status in the state. This bill proposes that a five-person New Jersey Cannabis Regulatory Commission to be created to set parameters for the industry, as well as oversights.

Originally the bill proposed would have set up the five members to be selected by Governor Phil Murphy with 3 provided under the consent of the senate, 1 with the consent of the senate president and 1 with the consent of the Assembly speaker. But, under the newly proposed bill seen below, the 3 selected by Governor Phil Murphy would no longer need senate consent allowing for anyone to be appointed without legislative approval.

Minorities, Women and Veterans

This bill would set aside 25% of business licenses available to give to business owners to be provided solely to Minorites, Veterans and Women. This would be mandated in the bill and would be certain to only go to those specified groups.

The bill also aims to create an office of business development for women, minorities and disabled veterans that would regulate the mandated provisions for minorities going forward.

Growing at Home

Unfortunately, this bill wouldn’t support or allow the ability to grow at home. This is likely to keep the income flowing in steadily to collect the tax.

Expungement in NJ

One of the more sought-after benefits from this bill, the passing of the bill would allow for low-level marijuana possession hundreds, if not thousands, of cases pertaining to those impacted would be able to begin the expungement process.

Though, with the state of the bill it is up in the air as to how the expungement process will be handled.

Favorable NJ Unemployment Locations

With the creation of jobs from a new industry being introduced into the state the bill would mandate that at least 25% of the business license be given to areas with high unemployment rates. This would allow for the creation of new business in areas with high unemployment with the hopes of offsetting the lack of work in the area.

Small Businesses

The bill also introduces a favor towards the small businesses in NJ with at least 10% of the licenses being held exclusively for smaller businesses. Theses licenses would be considered micro-licenses, which would act as normal license with certain provisions that wouldn’t be as impactful on smaller businesses as far as Taxes and regulatory costs.

The New Bill

The new bill in question keep the old proposal in tact with the only difference being the resolve in the taxation system. This would cause the taxation system to be overhauled allowing for the sales tax to be replaced with a flat tax. This flat tax would impose a $42 flat tax per ounce of Marijuana.

The Flat tax would follow the same guidelines regardless of price purchased. For an ounce of marijuana, it would be $42, a half-ounce would be $21, a quarter ounce would be $10.50 and an eighth would only have a $5.25 tax. The price would become stationary and would follows the same structure as the price of cannabis fluctuates in price, meaning if the price of an ounce is $200 the tax would still stay at $42 and follow the same $42 tax if the ounce is priced at $300. This will sometimes benefit the consumer, but more often benefit the state.

The new bill will also supersede one of the older provisioned guidelines when appointing members to the five-person council. Originally, Murphy would have to seek senate consent for the 3 spots on the Cannabis regulatory commission board. With the new proposal Murphy would have the ability to appoint the 3 individuals without the consent of the senate or any other legislation.

When will it be passed?

Unfortunately, this new bill is only in the proposal phase any may not be heard from anytime soon. This is to give it time to gain more support for the bills finalization and ensure it will pass the first time around. All we can do is wait and keep up with any news we hear surrounding the topic. If you are interested in the continued news centering this topic you can check out NJ Cannabis Insider, where updated coverage and events are announced.