N.J. Senate and Assembly advance legalization regulatory bill

Last update: January 4, 2021

On December 17, 2020, the New Jersey Senate and Assembly approved bills that would legalize possession of up to six ounces of cannabis and create the regulatory structure for adult-use sales, if signed into law. The Assembly passed S.21/A.21, “the NJ Cannabis Regulatory, Enforcement Assistance, and Marketplace Modernization Act” in a 49-24 vote with six abstentions. The Senate passed the measure in a 23-17 vote with no abstentions.

A constitutional amendment legalizing cannabis was approved by nearly two-thirds of New Jersey voters on Election Day and took effect on January 1, 2021. However, the amendment only allows for legalization of a regulated market, which means possession of cannabis remains illegal until Gov. Phil Murphy signs the enabling legislation. Gov. Murphy may not sign the bills because they do not include any penalty for minors possessing cannabis. A “technical fix” to that issue could delay final implementation until after the new year.

Under the negotiated version of S.21/A.21, the number of cultivation licenses would be capped at 37 for the first 24 months after the bill’s enactment. Facilities with 2,500 square feet or less and fewer than 1,000 plants are not included in the cap. The sales tax revenue would be divided up, with 70 percent going to social justice programs and 30 percent being used to support the work of the New Jersey Cannabis Regulatory Commission and for enforcement personnel training and equipment for drug recognition experts. Meanwhile, all cultivation excise fees would go to a social equity fund that would be directed to social justice reforms in communities disproportionately impacted by the war on drugs.

The excise fee, which could be imposed by the newly formed Cannabis Regulatory Commission nine months after the first recreational cannabis sales, is structured to rise as the average price of cannabis falls. The maximum excise fee would be up to $50 per ounce when retail prices fall below $200 per ounce. In addition to the fee, cannabis is subject to a standard 6.625% statewide sales tax, plus local option taxes of up to 2% on all sales from cannabis establishments.

Also on December 17, 2020, the Assembly passed an amended version of A.1897/4269. Under the amended bill, up to six ounces of cannabis and 170 grams of hashish could be possessed legally with no associated criminal or civil penalties. The bill removes penalties for use or possession for people currently on parole or probation. It also eliminates the odor of cannabis as a basis to initiate a search of a person and removes cannabis-related offenses from consideration in pretrial release and detention. The Senate passed the measure in November 2020 in a 29-4 vote with no abstentions.

New Jersey legalization ballot initiative passes with overwhelming support

On November 3, 2020, more than 67% of New Jersey voters approved an amendment to the state constitution allowing people 21 and older to use marijuana without a doctor’s approval. The amendment — which was referred to voters by the legislature — directs the legislature and regulators to set up a market to grow, distribute, and tax the product.

Voters in Arizona, South Dakota, and Montana also approved legalization measures November 3, bringing the nationwide total of legalized states to 15 plus Washington, D.C.

Under the ballot initiative, marijuana products will be subject to the state’s 6.625% sales tax. The legislature could also authorize local governments to collect an additional 2% sales tax on cannabis, and it is considering imposing an excise tax on cultivation. The amendment calls for legalization to take effect on January 1, 2021. Legislators have until then to develop the regulatory framework.

Legislature approves “clean slate” expungement bill

On December 16, 2019, the legislature approved a “clean slate” expungement bill to allow those with cannabis and other convictions to more easily remove from public view the scarlet letter that derails job and housing prospects. Gov. Murphy signed the bill into law two days later. Among other improvements, S. 4151 requires the courts — with help from an expert task force — to develop and implement an automatic sealing process for most cannabis offenses. 

Medical cannabis program expanded

On June 2, 2019, Gov. Phil Murphy signed A20, also known as Jake’s Law — named after Jake Honig, a pediatric patient who used medical cannabis during his battle with cancer. The law institutes many much needed reforms to the medical cannabis program, including:

• expanding qualifying conditions, including by adding chronic pain;
• providing anti-discrimination protections, including related to education, rental housing, professional licensing, and employment;
• expanding access, including by increasing the number of cultivators, retailers, and manufacturers; and
• allowing home delivery.

A more detailed summary of the changes can be found here.

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