NJ Finally Poised to Vote to Legalize, Tax, and Regulate Recreational Marijuana

You know you’re close to actual legislation when committees are being formed with fancy titles, taxation has numbers to it, and government officials—including the Governor himself—are going on the record with time tables. This means, at least as it currently stands, we are as close to an actual vote on the legalization of recreational marijuana in the state of New Jersey than we have ever been, and that is pretty damn cool and about friggin’ time.

“We’re still trying to machine this to get it over the goal line, but I think we’re all working really hard to get this done,” Governor Phil Murphy told reporters this week, tamping down too much excitement. “We’ve said all along that this is not a light lift.”

The pulling back of expectations is also a good sign, as NJ legislators begin massaging the vote with numbers that everyone can live with. We are just about through the morality bullshit stage where people warn against blood running through the streets and a plague of frogs. We’re into reality time here (oh, if only the federal government worked in this construct) and we’ll soon have people on record about how we shall continue to proceed into the 21st century.

With New York suddenly breathing down our necks, the Garden State needs to make this happen—beyond even the promises of Governor Murphy, who was supported in this space in 2017 for this and this only. It is a very lucrative and successful business model currently seeing a variant of successes in 11 states. But, just like anything else going state-to-state without a federal law to back it up, these are vacillating experiences. Each state has taxed, regulated, and policed the new laws in differing ways. In fact, some have “relaxed” restrictions, sort of a test pattern of legislation most recently in adopted Michigan, Utah, and Missouri—in all cases, the popularity of legalizing recreational marijuana is well over 60 percent.

Here in NJ, we’re at 62 percent, but much higher among people under the age of 50. How this is being represented by our… ahem… representatives is to be determined. The measure needs 21 votes in the Senate to pass. The conservative estimate of absolute votes on record currently is 16. The hold up on some of these potential thumbs-up votes have to deal with reaching agreements on the initial number of licenses to be distributed, and how many public consumption sites would be allowed. There is also language in the latest bill which include expungements—clearing marijuana convictions from criminal records—that has to be ironed out. But, perhaps the most pressing hurdle was traversed over this past month, when taxation was put to rest.

Ah, yes…. Taxation. This is the main reason this column has called for this measure— beyond the hypocrisy of having alcohol, sports betting, bear hunts, et al., all being legal, and a profitable substance being viewed with an early 20th century lens. The tax money from legalization could curtail the high cost of living in this state, with property and school taxes being the big culprits. How lawmakers came to an agreement makes perfect sense, which scares me, because usually making sense is enough to doom any bill. “There will be a $42 excise tax on every ounce that is sold, regardless of price,” State Senator Nicholas Scutari told CBS News this week. “There will be a three-year look-back in case we need to reevaluate that because it is a possibility that the price goes down so low that $42 becomes unmanageably high.”

The reason why taxing by weight is important is the simple supply and demand shift in the pricing of a once illegal substance brought into the economic structure of a state. For instance, a Cuban cigar is somewhere in the range of $32 to $35 right now. A similar quality cigar, like my favorite, the Ashton Magnum, singularly goes for anywhere from $11 to $15. The mistake is in thinking that you’re taxing a $32 item once it is legally and thus readily available, but if the U.S. Congress were to lift the ridiculously meaningless embargo on Cuba, the price of these cigars would plummet to the range of Dominican cigars (Ashton is Dominican), which are in the same class, but in my estimation have not yet reached the level of quality of the Cuban. All of this, of course, effects how the cigars will be taxed. There is not enough time to go into the ridiculously high tobacco tax here, but holy shit, man.

In essence, this kind of market shift is what happened to flat-screen TVs for over a decade. What used to be a luxury item, priced as such, flooded the market and became pedestrian. And, this is where the government has to be prepared to ride the decrease in price for the legalized brand of pot—as opposed to those who may still choose the black market to purchase marijuana.

The price of an ounce of marijuana has plummeted to half in the past year in Colorado, one of the first states to legalize it in 2014. It has reportedly generated over $5 billion in revenues for the state in the past five years, but I am not sure if Colorado legislators provided a failsafe for the free market to dictate the price, which it always will. My guess is they are getting hammered in their projections—for a good example of this, see the federal government’s projections for the success of the passing of the Affordable Care Act, or the recent Republican tax reform law, which both woefully misread the actual pace of its returns. This is something governments do by rule. NJ has to be on top of this, and it looks like it is.

Governor Murphy originally wanted a tax closer to 25 percent, but with the tax-by-ounce agreement, it will be closer to 12 percent to start. Either way the projections are good for added tax revenue immediately for the state.

All of this is to say that we are close—as close as we can possibly be to getting there. But, we are talking about votes and changing the laws dramatically for a publicly controversial, yet far too misunderstood substance. Nevertheless, it’s a substance that has rightfully been discussed in rational ways in the past half-decade, leading to us profiting from it.

Hooray for the free market and democracy. It only took a half century to make a plant legal.

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James Campion is the Managing Editor of The Reality Check News & Information Desk and the author of Deep Tank Jersey, Fear No Art, Trailing Jesus, Midnight For Cinderella, Y, Shout It Out Loud—The Story of KISS’s Destroyer and the Making of an American Icon, and coming in June 2018, Accidently Like a Martyr—The Tortured Art of Warren Zevon

 

 

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