Chris Goldstein is a South Jersey-based marijuana activist
A widely publicized report this week by the ACLU New Jersey and NJ United For Marijuana Reform (NJU4MR) estimates that the Garden State could grow $300 million in annual tax revenue by legalizing cannabis.
But key for New Jersey could be data showing the state could become a pot tourism destination. Of those hundreds of millions in sales, one-fifth could come from Pennsylvania and New York residents.
The report assumes a tax rate of 25 percent and a three-year ramp period before the ideal windfall is achieved. It is a fair and even somewhat conservative analysis. In Colorado and Oregon tax revenue projections were actually exceeded in every quarter. Oregon regulators revised their outlook this week stating that about $43 million in marijuana taxes will be collected in 2016, smashing their expectations of just $3 million.
The NJ data was compiled by Brandon McKoy at New Jersey Policy Perspective and Ari Rosmarin at ACLUNJ. They used a similar formula that we applied to Pennsylvania in a Philly420 column back in 2015.
Estimates of cannabis consumers in a given state can be gleaned from the federal government’s National Survey on Drug Use and Health. Clues on how to size up the current underground marijuana market along with the costs of prohibition law enforcement came from a RAND Corporation report commissioned by the State of Vermont.
Philly420 calculated that there are likely just under 1 million Pa residents who buy about 265 tons of marijuana and spend about $2 billion on the dried flowers every single year in the current, underground market.
Of particular note in the ACLU/NJU4MR report is that a chunk of the projected NJ cannabis tax proceeds, about 10 percent, would come from Pennsylvania residents crossing the Delaware River to purchase a legal joint.
NJ advocates seem to envision a world where weed is legal from Bayonne to Cape May but is still contraband in New York and Pennsylvania. The prospect of buying some well-manicured buds in a boardwalk shop in Atlantic City would probably bring in more Pa residents than nightly Boyz II Men reunion concerts. Indeed, under that scenario marijuana might be the biggest boost in tourism the NJ has ever seen.
The report estimates that post-legalization marijuana sales in New Jersey would be 3.38 million ounces per year. The authors assume that Pennsylvania residents would purchase about 28,000 ounces of Jersey’s finest weed for about $101 million transactions over the course of a year. Those sales would contribute about $25 million in annual taxes.
But there is one more issue that has cropped up in post-legalization states: Places to consume for non-residents.
If New Jersey really wants to sell a buzz to their neighbors then a firm plan for social use in bars, clubs and designated smoking areas is vital.
Alaska is currently the only state taking on the issue of where people can legally light up outside of private homes as part of their regulatory scheme. Even in Denver, Colorado sparking up a spliff in a bar or in public remains illegal.
Right now New Jersey is set to ban smoking cigarettes from beaches and parks. It is unclear where that would leave those who want to legally puff on some Lemon Skunk in the future. Also, if marijuana became legal in Camden and not in Philly then the happy day-trippers could not bring home any souvenirs.
Legalization will be even more present in the area this fall as voters Massachusetts and Maine are set to weigh in on the issue. Of course NJ, NY and Pa do not have voter ballot initiatives to change the law. We must rely on our state legislators.
Those politicians may need to start working together in new ways. Retail cannabis in our area is compelled to be a more regionally coordinated effort than previous state-by-state reforms.
The massive population density and close proximity of major cities could be a real problem for consumers if they need to navigate a patchwork of different laws for the same plant. The issue already exists nearby. In a 30 minute drive you can move from prohibited Virginia to decriminalized Maryland and Delaware then finally to fully legal Washington DC.
Right now police in New Jersey are making arrests for possessing pot at record levels, about 25,000 every year. This more than for all other drug possession arrests combined. It will be a huge shift to go from one extreme to another. Stopping those arrests in the interim with decriminalization also makes sense.
NJ’s cannabis legalization community also does not hold a fantasy that Governor Chris Christie will flip 180 degrees from his current drug warrior position. So this report is meant to build towards a new, hopefully more amenable, governor in 2018.
Any legalization effort should focus on consumers. Quality products, fair prices and reasonable places to enjoy cannabis are the only ways to transition people from the underground market to the regulated supply and get the tax revenue flowing.
Published: May 26, 2016 — 12:30 PM EDT