New Jersey Governor Proposes Marijuana Tax Hike

“In just five years, cannabis has gone from destroying lives—in the form of excessive criminal sentences—to helping save lives.”

By Sophie Nieto-Muñoz, New Jersey Monitor

New Jersey Gov. Phil Murphy (D) wants to hike a special tax on cannabis from $2.50 to $15 an ounce to fund social service and violence intervention programs with tens of millions of dollars in new revenue.

“In just five years, cannabis has gone from destroying lives—in the form of excessive criminal sentences—to helping save lives,” Murphy said in his budget address Tuesday.

Murphy’s plan comes about two months after the state Cannabis Regulatory Commission hiked the tax from $1.24 to $2.50 an ounce in December.

The tax, known as the social equity excise fee, is paid by cannabis cultivators. The money goes to a dedicated fund for social equity programs and investing in communities hurt by marijuana prohibition, and another portion is allocated to programs to divert youth from cannabis.

As of August 2024, the tax has brought in more than $6 million, which is all sitting unspent, according to the cannabis agency. That money must be allocated by the Legislature and governor under the state’s cannabis legalization law.

As part of his budget plan, Murphy also wants the tax to apply to intoxicating hemp products—a legal product that contains chemicals like delta-8 and delta-10, which can give intoxicating effects similar to THC in weed.

Officials with the Murphy administration said they don’t need the cannabis agency’s approval to increase the social equity excise fee.

Under Murphy’s proposal, the changes would bring in $70 million in revenue.

Senate President Nicholas Scutari (D-Union), a supporter of legal cannabis, said he is not supportive of raising the tax right now. Scutari noted that it’s cheaper to buy weed illegally than it is to buy it from a legal dispensary (New Jersey has some of the highest cannabis prices in the nation). He said he wants more people visiting dispensaries, and increasing cannabis taxes isn’t the way to do that.

“I don’t want to see our taxes for that product go up, which it already can’t compete with the gray market, the black market product,” he said. “That would be difficult right now.”

This story was first published by New Jersey Monitor.

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