Legal Marijuana in NJ Could Bring Tax Revenue and Jobs. But a Vote Is Only 1st Step

Legal marijuana is on the ballot in New Jersey, and advocates are touting tax revenue, job growth and racial justice among their top reasons they'd like to see it pass.

If enough voters say yes, the Garden State would become the 12th in the country with legal recreational marijuana, meaning the drug can be consumed by any willing adult regardless of their medical status.

But right now, specifics on what changes will happen right away are hard to come by.

Four people NBC10 spoke to expect at least a year of legislative and regulatory work before the first pot shops could open. And right now, the state doesn’t have a legislative guarantee that arrests for pot possession could stop immediately.

In the meantime, lobbyists, businesspeople, investors and experts are ready to get in line for a license to sell weed legally. If the ballot measure passes, they'll make their case to a commission in the state that will regulate cannabis just like a state board of Alcoholic Beverage Control would regulate liquor stores and sales. 

Those commissioners, not the state legislature, have their work cut out for them. They’ll need to establish how many pot shop licenses will be issued and where, and whom, will receive them. They’ll have the benefit of examining other states that have already legalized weed and seeing what worked and didn’t work.

When it’s all worked out in months or years, Jersey would be the closest legal pot market to both the Philadelphia and New York metro areas. Currently, the closest is Massachusetts.

“Because New Jersey is going to roll out first, they’re going to have all that time to soak up the surrounding money from the surrounding market ... they’re going to eat Pennsylvania’s lunch,” said Bridget Hill-Zayat, a legal consultant for cannabis businesses who teaches at Stockton University.

Prospective business owners are raring to go. But three years ago, so was Stockton, setting up a cannabis studies minor and certificate. Students can learn about the industry and what jobs would be available to them, which Senate President Steve Sweeney estimated at around 43,000 jobs.

It’s not just “budtenders” and people rolling joints for sale. That number includes scientists to test the product for safety, botanists to grow and tend the plants, and more. Businesses will also need help, where Hill-Zayat comes in, to understand and comply with all the new rules that will be in place in the sale, growing, testing, shipping and handling of the drug.

“Each state will have its own rules. And by God, you better stay compliant because you are jeopardizing a license that cost this company millions of dollars to gain,” Hill-Zayat said.

Seeing Green

Legal weed leads to tax revenue for the states that sell it, and watchers are wondering how much green the pot sales could bring in for New Jersey.

Other states with legal weed don’t quite have the same population as New Jersey, so tax comparisons are difficult. Illinois has 12.7 million people to New Jersey’s roughly 8.8 million, but its program is less than a year old, so numbers on tax revenue aren’t final yet.

Oregon, with half the population of Jersey, taxed weed at 17% and raked in over $70 million in state taxes in 2017, the first year of wide operation.

Hill-Zayat wondered if Jersey could take in double that. But one of the top players in the state is eager to keep taxes on the drug low.

In an interview with NBC10, Senate President Steve Sweeney said he wants marijuana to be taxed at the state sales tax of about 6.6% and a local tax of 2%.

He said he didn’t want to go the route of some other states, where consumers pay a marijuana tax, a state tax and a local tax that could amount to 20% or more.

“They think it’s going to solve all their budget problems so they tax the hell out of it. Not realizing that the person that’s been buying weed off his buddy for the last 10 years, why is he gonna stop buying it from his friend?” Sweeney said.

Sweeney says he would rather “through volume” of sales and low taxes, try to freeze out the black market and turn pot's regular users toward something that's safer than buying from a dealer.

He also expects the state commission regulating cannabis to make sure there “isn't on every corner a marijuana shop.”

“We want to have an industry that’s going to be vibrant where businesses invest, as I did when I saw it when I went to Colorado.”

The sleek, high-tech shops he visited in Colorado “reminded me of an Apple Store,” Sweeney said.

It’s most likely going to be sophisticated, well-funded ventures that dominate in the competition for licenses, due to the complex applications and regulations involved.

Race and the justice system

New Jersey cops make a high volume of marijuana arrests, and those cases can lead to jail time, fines, and difficulty securing a job, advocates say.

But police and prosecutors will need to hear from state lawmakers in Trenton before possession arrests could stop. And according to NJ.com and NJ Cannabis Insider, bills that would decriminalize weed - banning cops from arresting people for the drug - have not made it out of the state legislature.

Amol Sinha, executive director of the New Jersey ACLU, told NBC10 the legislature “needs to act” quickly and noted that the ballot measure alone can’t make arrests stop.

“What we desperately need is uniformity across the state to make sure that all law enforcement and all prosecutors realize that cannabis is legalized, that they shouldn’t be wasting law enforcement dollars toward processing arrests, and that they shouldn’t be burdening people with the consequences of an arrest for the rest of their lives,” Sinha said.

He cited multiple statistics that show Black people across the state were arrested more than three times white people for possessing marijuana. And the state has one of the highest rates of marijuana arrests in the nation.

Sinha and others have called for the state to direct less resources to drug arrests and more to social services.

“There have been reports that it takes 4 to 6 hours for a police officer to actually process the cannabis-related arrests. That’s four to six hours that they could be spending on actual threats to public safety, not on something that most people believe should be legalized,” Sinha said.

Members of the NJCAN 2020 group, of which the NJ ACLU is a part, are calling for more than just the ballot measure to pass. They want to ensure that the industry allows for participation and ownership from diverse communities hit hard with arrests over the past decades. Then the state should direct revenue to those communities, Sinha said. 

“Knowing what we know about who gets arrested for cannabis-related crimes and the tax revenue, it should be going to the communities that have been hardest hit by the war on drugs," he said, referencing Camden, Trenton, Paterson and other North Jersey communities. He hopes the money can go toward community programs like "education, counseling, treatment ... job training.”