Municipalities may be able to add local tax on cannabis products, stores
By JACK FICHTER/Sentinel staff
TRENTON — A ballot question asking voters whether they would like to legalize the possession and use of marijuana for people age 21 and older and legalize the cultivation, processing and sale of retail marijuana was expected to have been approved by New Jersey voters Nov. 3.
A state commission created to oversee the medical cannabis program would also oversee the new, personal use cannabis market. Marijuana would be subject to state sales tax and, if authorized by the Legislature, a municipality could pass an ordinance to charge a local tax on cannabis products.
Should state residents be searching for marijuana retail stores in the near future or delivery services to their homes?
Erik Altieri, executive director of the National Organization for the Reform of Marijuana Laws (NORML), said he expected the state Legislature to pass some form of legislation to end the arrest of adults for marijuana possession. He said setting up the regulatory process and issuing licenses on the commercial and retail side would take some time.
“What we want and what the majority of New Jersey voters want by approving this initiative is that no adult continues to face arrest for simple possession,” Altieri said.
In other states, timelines for implementation of a commercial cannabis market have been as short as six to eight months and as long as two years, he said. Altieri said there are 11 states with legal marijuana, so New Jersey does not need to “reinvent the wheel” with some infrastructure already in place with the medical marijuana program.
On Oct. 28, Senate Judiciary Committee Chairman Nick Scutari (D-Union) said existing medical marijuana dispensaries could begin selling to the public within a month of the election.
Altieri said while local towns could pass ordinances against marijuana sales within their borders, they could be overridden by the state.
“Some states require counties to opt in, some require them to opt out, some don’t allow them to opt out at all. Some if they opt out, they lose the tax revenue they would have got from the shared pool,” he said. “That’s still a lingering question since the whole commercial side of legal marijuana in New Jersey has yet to be drafted.”
Counties and municipalities in some states have been allowed to opt out of retail marijuana stores but adults could still possess and consume it and can drive elsewhere to make a purchase, Altieri said.
“But we’ve also seen in those states, even counties that initially were opposed to marijuana retail outlets, largely came around with time, particularly if forgoing those retail outlets meant they were also forgoing the tax benefits,” he said.
In Colorado, Sen. Cory Gardner, a conservative Republican, grandstanded and campaigned against marijuana legalization when the question was on the ballot, Altieri said, but as soon as legalization passed, “became one of our great supporters in Congress.”
“Having your state voters who also elect you show that they’re overwhelmingly behind this tends to have an influence on the politicians that want to keep getting re-elected,” he said.
Altieri said with the COVID-19 pandemic continuing, the state could give licensing to micro-retailers, marijuana delivery services partnering with current medical cultivation centers.
Sales tax on marijuana sales has been forecast to bring the state from $300 million to $900 million per year by 2024. He said he expects a boom in the early years of legalization when New York and Pennsylvania residents come to New Jersey to purchase marijuana.
Based on data from other states that have legalized marijuana, not only does it draw economic activity to towns that allow dispensaries but decreases crime because the retail operations are required to have a lot of security cameras and an on-site guard producing a safer neighborhood, Altieri said.
“In terms of tourism, one simply has to look at the close analog of Las Vegas where if you go down the Strip, there’s a fair number of marijuana dispensaries now, they have a cannabis museum, they have cannabis interactive exhibits,” he said. “It’s become a fabric of Las Vegas already as part of what tourists will do when they go there.”
Recreational marijuana use has been legal in Nevada since 2017. Altieri said marijuana sales could help Atlantic City, which has been losing gamblers to casinos in Philadelphia and Delaware.
Revenue from marijuana sales tax can come to local towns proportionately from a state pool while in some states local municipalities can add their own local tax from 2 to 5 percent.
“It can be sizable especially at a time when they are looking to fill holes in their budget due to the effects of COVID-19,” he said.
Altieri said legalized marijuana has created around 300,000 good-paying jobs nationwide. At a time when people are filing for unemployment compensation en masse, marijuana sales bring in tax revenue for infrastructure and education and also create jobs, he said.
New Jersey has been ready and waiting for legalization. Even if some of the politicians were a little hesitant, the people have been overwhelmingly supportive, he said.
Some states have banned people with past marijuana arrest records from obtaining a license to sell it legally.
“It’s something we have always fought against at NORML,” Altieri said. “We believe if your criminal record is for nothing more than marijuana, you should not be denied the market that is now developing just because they happen to arrest you six months before the voters had their say.”
He said Gov. Phil Murphy views legal marijuana as a social-justice issue. Altieri said if we are going to address the harm that marijuana prohibition has caused on communities, we need to make sure those people who were harmed stand to benefit from its legalization.
Last year, there were more marijuana arrests than those arrested for all violent crimes, according to the FBI.
“I don’t believe most folks think that police should be spending more time arresting an otherwise law-abiding adult for consuming a joint than they should a robber, a burglar, someone who assaults someone,” he said.
Some police chiefs in the state have expressed concerns about drivers impaired by marijuana use. Altieri said there has been no dramatic increase in other states in impaired driving or highway fatalities due to marijuana.
“We know that comparatively to alcohol, the risk is infinitely lower,” he said.
Individuals are already consuming marijuana, he said.
“It’s not suddenly like we have this whole new population of individuals trying marijuana for the first time in their lives and getting behind the wheel,” he said.
Altieri said legalization of recreational marijuana was expected to pass in Arizona, South Dakota and Montana as well.