Four Things to Watch After Legislature Cancels Votes on Marijuana

To the dismay of advocates and the cheers of opponents, the New Jersey Legislature canceled its scheduled votes on a three-bill package to legalize marijuana for adult use, expand the State’s medical marijuana program, and expunge the records of certain marijuana offenders.

For the time being, New Jersey will not become the eleventh state to legalize cannabis for recreational use. But with legislators still committed to moving the issue in the future, here are four things to watch in the coming months.

  1. Will the Governor Take Action to Expand the State’s Existing Medical Marijuana Program?

Marijuana is legal for medical use in New Jersey, and the State’s medical program has seen a rapid expansion under the Murphy Administration. Under the current framework of the “Compassionate Use of Medical Marijuana Act,” the Governor has the authority to permit more alternative treatment centers (ATCs) in the State, and to continue to expand the list of qualifying medical conditions that marijuana can be prescribed for. Governor Murphy and his Department of Health did a call for applicants in August 2018, and issued permits for six new vertically-integrated ATCs. The Governor expressed his desire to expand the medical marijuana program aggressively if legislation did not move forward. Administration officials have walked back the Governor’s statement in order to focus on the legislative strategy, but did leave the door open to expanding the program through executive action in the future, potentially as soon as May.

  1. Does This Become a Ballot Question for the Voters?

Some legislators have advocated for putting recreational marijuana to the voters for them to decide. A ballot initiative would be costly for both sides of the issue and if the ballot initiative does not pass, a new ballot initiative on the subject could not occur for another three years. Moreover, the Legislature would be hard-pressed to pass a law that the voters just rejected. It is more likely that the Legislature will keep this issue within their purview and reconsider it at some time in the future.

  1.  Are There Impacts to the State Budget?

The Governor’s proposed budget for Fiscal Year (FY) 2020 anticipated $60 million in new revenues from the legalization of marijuana. While not a significant amount in comparison to the overall spending plan of $38.8 billion, it does create a gap right at the outset of legislative hearings on the State Budget. Of greater concern might be the increases in revenue that were anticipated for Fiscal Years 2021 and beyond. This would likely be greater than the $60 million budgeted for FY 2020. As an example, Colorado’s program is five years old and now provides about $200 million in annual tax revenues.

  1. What Does New York Do?

New York’s legislative session runs through June, and the Governor and legislators have been in discussions about how to legalize, tax, and regulate marijuana. Part of the reason New York wants to move on this issue is because neighboring states (specifically Vermont and Massachusetts) have legalized marijuana. With New Jersey’s legalization efforts on hold for the time being, it could give New York’s legislators pause or it could hasten their efforts to get out in front of New Jersey. If New York does legalize marijuana, it would become the second largest state by population to do so (California being the largest).

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