Lawmakers on track for a vote by the end of the month.
Democratic legislators summarized the fine points of a bill to allow anyone 21 or older to buy and consume marijuana. What’s on the table is a bill that Governor Murphy would sign providing that the tax rate is above 12%. The promised date for introduction is October 29, 2018. At last count, the bill could pass with 23 Democratic Senators and two Republican on board. Naturally, our consensus is based on unconfirmed evidence. One key stumbling block – a tax rate below 12%.
As for the bill - the latest draft of the legislation, dated October 4th, contains 135 pages and addresses taxes, regulations and eligibility to operate a marijuana business. Senator Nicholas Scutari insists that the bill, which has not been formally introduced or made public, “is the tool for putting weed in the hands of consenting adults.”
In its current form, the bill would impose a 12 percent tax on marijuana sales and 2 percent markup for local cities and towns. Meanwhile, Murphy wants 25 percent and appears willing to compromise. Somewhere in the middle should work for all sides. The bill would allow municipalities to opt out of legal marijuana sales, but only for five years at a time. If communities don’t act, the law will allow marijuana businesses within their borders, subject to local rules on locations and hours.
Even if the bill passed and was signed into law, we expect it would take at least 12-months before stores start opening with buds, leaves, tinctures and marijuana-infused candies, baked goods, and beverages. The state’s existing six medical marijuana dispensaries, soon to be 12, could start selling the product for non-medical use earlier.
As the bill reads right now – all sides agree the law will create a significant boost the state’s taxable base and allow for a fiscally responsible budget. Marijuana as a “good citizen” will pay its fair share and bring the black market into a regulated, taxed system.
Our analysis projects a different scenario. Because of the issues surrounds the mid-term elections in November and the “posturing of politicians,” the likelihood for the formal introduction of the bill will not happen until after the elections and be placed on the calendar in mid-January with approval in February 2019.