Update on Marijuana Legislation in New Jersey

By: Joseph L. Linares and Selina M. Ellis

New Jersey lawmakers and citizens appear to favor marijuana legalization for recreational use, and approval of recreational cannabis in the Garden State seems inevitable. What remains undecided, however, is the form, scope and timing of any legalization legislation.

While legislators have floated a number of competing legalization/decriminalization bills, the leading bill – introduced in June of 2018 by State Senator Nicholas Scutari – has made the most headway, having been voted out of a joint Senate and Assembly committee back in late November. Companion legislation concerning record expungements was introduced by State Assembly members Annette Quijano and Jamel Holley, and State Senators Teresa Ruiz and Sandra Cunningham. Neither of those bills has made it through the Democratic-controlled legislature.

One of the main holdups with Senator Scutari’s legislation, Bill S830, has been the rate and method by which marijuana would be taxed. Recently, news emerged about an alleged agreement between Governor Murphy and legislative leaders to tax marijuana sales by the ounce ($42 per), a creative way of avoiding having to bridge the rumored sales tax rate gap of 12% and 25% without the Governor or Senate President having to be seen as capitulating. Taxing by weight also provides a level of predictability for state revenue given the volatility of marijuana prices experienced by states like Colorado and Oregon.

Beyond the taxation issue, it appears that a handful of New Jersey’s 25 Democratic Senators are unsure or opposed to S830, making it unclear whether proponents have the requisite 21 votes to pass the 40-member Senate. There is no timetable for when the bill will be presented for a final vote, though some are pushing for a vote this month regardless of a guaranteed positive outcome.

Governor Murphy, State Senate President Stephen Sweeney, and Assembly Speaker Craig Coughlin are all on record with their preference for legalization by legislation rather than a ballot initiative. If successful, New Jersey would become only the second state to proceed that way. Nevertheless, a new proposal by State Senator Ron Rice and Assembly member Holly Shepisi would have voters decide through a referendum whether to legalize and tax recreational use of marijuana. The new bill could be finalized as early as this week. A ballot measure, even if successful, would likely stall the legal purchase or possession of marijuana until the beginning of 2020 at the earliest, in order to give the state ample time to set guidelines and establish a commission.

For more information on New Jersey’s marijuana laws and their impact, please contact Marc Haefner, Selina Ellis or Joseph Linares at (973) 757-1100.