Yes, Murphy thinks NJ legal weed sales will begin soon. Its state budget says so.
EDITOR’S NOTE: NJ Cannabis Insider is hosting a one-day conference and networking event on March 16 at the Carteret Performing Arts Center, featuring many of the state’s influencers. Tickets are limited.
Gov. Phil Murphy now expects legal weed sales to generate $4 million in state taxes for the remainder of the current fiscal year, which ends June 30.
The projected revenue — presented in the budget brief released by the Treasurer’s Office — is a major overhaul of the spending plan Murphy signed last June, which called for the state not to take a dime from legal weed sales. by mid-2022.
Analysts and those who closely follow every nuance on cannabis emanating from Trenton say it signals this: Despite recent misfires, the governor fully expects adult weed sales to be up and running in the coming months.
“We understand that the CRC (Cannabis Regulatory Commission), at its March 24 meeting, will give the green light to some of the incumbent medical licensees to begin recreational sales,” said Cantor Cantor analyst Pablo Zuanic. Fitzgerald.
“If that’s the case, given the transformation, (New Jersey) should be able to start recreational sales a month later, like late April or early May. The assumption is that they will start in May.
But getting there is proving to be a daunting task.
Already on the radar of the governor’s office is bolstering an understaffed Cannabis Regulatory Commission that is mired in reviewing hundreds of license applications.
The state agency is expected to complete the 90-day review for the first eight of a dozen applications for alternative treatment centers to expand into the adult recreational market on March 15. The committee will take stock of these requests at its meeting on March 24. .
At the board’s last hearing on Feb. 24, panel executive director Jeff Brown said an additional 360 applications for conditional and annual licenses had so far been received and were also being considered.
The commission has posted numerous positions, many of them in the Investigator series of titles, over the past few months.
“CRC’s primary hiring goal is to fully staff compliance, investigations and licensing staff over the next year,” Murphy spokesman Michael Zhadanovsky said in a statement. email Friday to NJ Advance Media. “Governor Murphy’s budget proposal for fiscal year 2023 significantly increases CRC’s operating budget, with the primary driver of the increase being the hiring of more staff.”
Murphy’s proposed $48.9 billion budget calls for the state to collect $19 million from statutory weed taxes for the fiscal year that begins July 1.
Zhadanovsky said the projected $19 million is after applying the 6.0% sales tax on total cannabis sales.
“$19 million represents expected income from recreational sales for the general fund, not the total amount of expected income,” Zhadanovsky said in an email after Murphy’s budget speech on Tuesday. “Much more funding will be dedicated to CRC operations and investments in impact areas.”
Wall Street analyst Zuanic said the $19 million allocated to the general fund equals about $320 million in total weed revenue after taking into account the 6% tax.
“It seems pretty low compared to what we think is the potential,” Zuanic said. “So the governor is conservative.”
Zhadanovsky clarified that there are separate funds for Impact Zone Investments, which will receive 70% of all fees, fines and tax revenue collected from cannabis sales. The remaining 30% supports the operations of the Cannabis Regulatory Commission and any excess balance may go to the general fund of the state budget.
Zhadanovsky said the commission’s spending is expected to drop from $9.325 million to $17.3 million in the fiscal year that begins July 1 to support the commission’s efforts to hire more staff.
“When the CRC was established last year, it started with 21 staff members, and now it has 60,” Zhadanovsky said on Friday. “CRC plans to further increase its membership throughout the year.”
Coincidentally, on March 4, CRC posted a new job opening: Investigations Supervisor to be part of CRC’s Compliance and Licensing Unit.
The agency is now accepting applications until March 21 for the position which pays $78,283.00 to $111,555.82, depending on experience.
The overwhelming workload facing the panel was not lost on Raymond Mercer, who is part of a group seeking a license to manufacture cannabis and spoke at the second of three CRC regional hearings on Wednesday. on how best to use cannabis revenue for social purposes. court programs.
“I think hiring more people for CRC (would help),” Mercer said on Zoom. “I’m sure you are supported.”
“You mentioned there are hundreds of conditional (licence) applicants – 45 pages each and if there are 1,000 applicants after the next March 15 deadline, that’s 45,000 pages – that’s a lot of people who need to read these pages,” Mercer continued. “I think helping the CRC help itself would help everyone else.”
Cannabis attorney Charles Gormally of Brach Eichler said market delays in New Jersey are due to a combination of factors, and an overwhelmed panel setting the regulatory framework for the entire industry is just one of them.
“The evolution from a well-funded government war on drugs to the development of well-organized, fully functioning cannabis businesses has not followed a linear path in New Jersey,” Gormally said. “Then add some badly needed social justice priorities to promote those who have been badly harmed by cannabis prohibition to participate in this new endeavor, but without providing them with capital support to do so.
“Top it all off by empowering local governments to choose who they want to operate businesses in their cities, and you can begin to see why every scheduled date since the constitutional amendment was passed hasn’t been met.”
Wall Street analyst Zuanic said a new market like New Jersey had to prove three things.
“When a program is launched and running, there are three A’s that drive market growth and size: affordability in terms of price, access in terms of number of stores available, and product assortment” , Zuanic said.
New Jersey currently has 23 alternative treatment centers selling to the medical patient population.
“There just aren’t enough stores and there’s also illicit trade there,” Zuanic said. “That’s why things at first are slow.”
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Suzette Parmley can be attached to [email protected] or follow her on Twitter: @SuzParmley