This State Will Legalize Weed In 10 Days
In 2017, New Jersey Governor Phil Murphy ran on the promise of legalizing weed in my home state.
Now, he and a fresh wave of Democratic legislators are poised to follow through on their promise with the aim of legalizing pot on March 25.
"It’s time,” said State Senate President Stephen Sweeney.
Ten states — Washington, Colorado, California, Nevada, Alaska, Oregon, Maine, Michigan, Massachusetts, Vermont — and the District of Columbia have already ended the archaic and unsuccessful prohibition on marijuana.
And New Jersey can’t afford to wait too long before joining them.
New Jersey’s debt totaled $46.1 billion in fiscal 2017, a record high, and unfunded pension and health liabilities were $155 billion.
For this fiscal year, which ends June 30, Murphy counted on 7.5% overall revenue growth to support a $37.4 billion budget. But growth was only 3% through January, putting the state $740 million behind.
Income tax collections, the state’s biggest revenue source, were down 6% this fiscal year through January.
So, New Jersey, like many states (and our federal government), has a problem here.
Legalizing marijuana can help alleviate that headache, along with oh so many others.
If the bill passes, growing cannabis would be subject to an excise tax of $42 per ounce.
Municipalities would collect a 1% tax on local wholesalers, a 2% tax on local manufacturers, and a 3% tax on retail sales.
The marijuana market would be governed by a Cannabis Regulatory Commission, composed of five members appointed by the governor. The commission would promote regulations to govern the industry and oversee applications for licensing.
Certain provisions in the bill also establish an “expedited expungement process” for individuals convicted of low-level marijuana offenses and a process that would automatically prevent certain marijuana offenses from being taken into account in job applications.
It’s hard to estimate exactly how much of a windfall sales and taxes will bring, but it should be considerable.
California reported tax revenue of $345.2 million for its first full year of legalization. And Colorado collected $683.5 million in taxes in its first year of legalization (2014). Washington state collected a total of $319 million in legal marijuana income and license fees in fiscal year 2017.
As it stands now, Governor Murphy is forecasting $80 million in marijuana tax revenue over the next fiscal year, with sales just getting off the ground.
Of course, the bill still has to pass.
At this point that seems likely, but it’s still not a guarantee.
Democrats control both chambers of the New Jersey legislature, but the state Senate is reportedly six votes short of the necessary 21 and the General Assembly is three votes shy of the necessary 41.
So Governor Murphy has some whipping to do.
That really shouldn’t be too difficult considering 62% of New Jersey residents support marijuana legalization.
It’s a popular bill, no doubt. The only thing standing in its way is a heavy lobbying effort from lobbying groups bankrolled by pharmaceutical companies.
After reaching a final deal on the bill late Monday, Murphy and his fellow Democrats who lead the state legislature will now focus on trying to whip up the votes they need from lawmakers to pass the measure.
Nevertheless, lawmakers remain optimistic.
I do too.
As I said, there’s simply too much at stake given New Jersey’s fiscal predicament.
The state can’t afford to fall further behind New England and potentially New York, which is considering legislation of its own. It’s already lost the economic advantage it had with casino gaming. It would be foolish to let this opportunity slip away too.
And speaking of opportunities you’d be crazy to miss…
Jimmy Mengel’s latest report — “Buyout Frenzy: The 5 Small Cannabis Stocks That Could Make You 1,000% In the Weeks Ahead” — has all the pot stock investing tips you need to get ahead.
No one knows more about weed than Jimmy. Trust me.
Jason Simpkins is Assistant Managing Editor of the Outsider Club and Investment Director of The Wealth Warrior, a financial advisory focused on security companies and defense contractors. For more on Jason, check out his editor's page.
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