The marijuana legalization debate in New Jersey is about to get a jump start, with the inauguration of Gov. Phil Murphy next week. Murphy campaigned on legalizing cannabis and has said he’ll sign a bill if one can make it through the state Legislature.
A bill coming later this month could soon dominate the cannabis debate in New Jersey and it’s not the same one that got attention last year.
Assemblyman Reed Gusciora, D-Mercer, plans to introduce that bill before Feb. 1, with big changes from last year’s much-discussed marijuana legalization bill, including letting people grow cannabis at home and the possibility that limited recreational weed sales could begin this year.
Let’s see how Gusciora’s bill compares to the marijuana bill that made headlines last year.
What’s in the other bill?
State Sen. Nicholas Scutari, D-Union, introduced his bill in May and reintroduced it on Thursday.
Scutari’s bill would legalize the possession and personal use of up to an ounce of marijuana for adults over the age of 21. It also would establish an enforcement agency, along with a licensing system for growers and retailers.
The state would impose a tax on weed sales, which the bill says would be used to cover enforcement costs and help communities adversely impacted by past marijuana laws.
First, the similarities
Brendan Neal, Gusciora’s chief of staff, said his team used Scutari’s bill when crafting their legislation and the foundation of the bills is pretty similar.
Both allow the possession and personal use of marijuana for people at least 21 years of age; both create a state agency to regulate marijuana; both set up a commercial market of growers and sellers; and both impose a state tax on weed.
The two bills also would allow people who have been convicted of low-level marijuana crimes to have their records expunged.
But there are several key differences
Scutari’s bill was vague on a number of issues — like how many weed businesses would be allowed — and left out others that advocates are pressing for inclusion.
Let’s take a look at where the two pieces of legislation diverge.
People could grow weed at home
Under Gusciora’s bill, New Jersey residents would be allowed to grow up to six cannabis plants in an enclosed space at their home. Only three of those plants could be mature — meaning producing marijuana — at any one time.
A single household could grow up to 12 plants, with no more than six being mature.
This marks a significant change from Scutari’s bill, which had no provision whatsoever for people growing weed at home. Scutari said in November that he was open to discussing home-grow, but added that he thought it was too much to include in his bill.
“Right now it’s too much,” he said. “I’m not fundamentally against it, but I’m aware of the problems. I’m a realist.”
Many marijuana advocates in New Jersey have been lobbying for home-grow in the months since Scutari’s bill was introduced. Each of the eight states that have already legalized pot — and Vermont, which is expected to go legal in July — have some form of home-grow in their respective laws.
“If the bill weren’t to exclude the provision for limited home-grow, we’d be the only state not to have home-grow,” said Dianna Houenou, a marijuana advocate with New Jersey United for Marijuana Reform.
She said that home-grow would be important for people who live far from a retail dispensary.
But home-grow has presented problems in other states that have allowed it. In some cases, people have grown more weed than is permitted and that surplus marijuana ends up on the black market.
“Oregon has a massive marijuana overproduction problem,” Billy Williams, the United States attorney in Oregon wrote in The Oregonian on Friday. “In 2017 alone, postal agents in Oregon seized 2,644 pounds of marijuana in outbound parcels and over $1.2 million in cash. For comparison, postal agents in Colorado seized just 984 pounds of marijuana during a four-year period beginning in 2013.”
But officials in Colorado said they had similar issues after weed became legal in 2014. Kevin Bommer, deputy director of the Colorado Municipal League, last year said that the state is still working to keep home-grown marijuana off the black market.
Neal, Gusciora’s chief of staff, said he’s aware of the troubles related to home-grow in other states, but added that he thinks the limit of six cannabis plants per person will stem diversion to the illegal market.
Low ceiling on the number of weed businesses allowed
Among the biggest questions concerning legal weed in New Jersey is: How big will the market be?
Scutari’s bill doesn’t set a hard limit on the total number of marijuana businesses that could operate in the state. The only restriction is that there has to be at least one dispensary in each of New Jersey’s 21 counties.
But Gusciora’s bill caps the total number of dispensaries across the state at 80, or two in every legislative district. In the first year of the legal market, the bill allows only 15 growers in total, escalating to 25 in the second year.
Neal acknowledged that the cap on businesses might be restrictive, but he said that is intentional.
“We’ve seen a proliferation of dispensaries (in other states),” he said. “They’ll be on every corner. That’s unsightly and a business concern.”
He added that the total number of businesses is open to negotiation, but said that there will be some cap on them.
Reduces the marijuana tax
If New Jersey were to legalize marijuana, experts say the state’s pot industry could generate more than $1 billion in total revenue per year. Scott Rudder, president of the New Jersey CannaBusiness Association, said that could be conservative.
Legal weed could put some $300 million in tax revenue into the state’s coffers each year, based on an estimate done last year.
But that estimate is based on a 25 percent tax rate, which is what Scutari calls for in his bill.
Gusciora calls for a lower tax on pot, starting at 7 percent in the first year, increasing to 15 percent in the fifth year and beyond.
Neal said the lower tax will result in getting rid of the black market for marijuana. If taxes are too high and weed is too expensive, he said people will just go back to buying from a dealer like they’ve always done.
But the lower tax will also mean fewer tax dollars. Based on the above estimate, a 15 percent tax would generate about $180 million each year in tax revenue for New Jersey.
Could be longer before the industry rolls out
Should either bill pass the Legislature, it will be a while before a full-blown weed industry rolls out in New Jersey.
Scutari’s bill gives regulators one year after Murphy’s signature to craft the rules of the industry and another year to start issuing licenses, meaning it would be two years minimum before the weed market gets going.
Under Gusciora’s bill, it would be even longer. Regulators would have 18 months to write the rules and one year to start handing out licenses to marijuana businesses.
But weed sales could start this year
The slower rollout under Gusciora’s bill doesn’t necessarily mean it would be 30 months before people could buy recreational weed in New Jersey, at least on a limited basis.
Neal mentioned a provision that would allow New Jersey’s existing medicinal marijuana providers — who would not be permitted to sell to the public out of their current stores — to open a dispensary in a different location and sell recreational pot as soon as 90 days after the bill is signed.
Scutari has voiced support for allowing the medicinal growers and dispensaries to open the industry, but didn’t include such a provision in his bill.
What should you expect?
Gusciora is expected to introduce his bill to the state Assembly within the next two weeks, while Scutari reintroduced his bill to the state Senate on Thursday. Both lawmakers have acknowledged a lot of negotiation remains before either bill could be passed.
Gusciora’s version clarified some parts of Scutari’s bill, while introducing other controversial elements.
It’s unclear which of the versions will gain more traction, but both will steer the marijuana debate in the coming months.
