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Legislative committee approves cannabis legalization bill

Both the New Jersey Marijuana Legalization Act and Jake Honig Compassionate Use of Medical Cannabis Act cleared committee votes in the Legislature on Nov. 26.-(NJBIZ FILE PHOTO)

A joint committee in the state Legislature approved Monday a measure to legalize, tax and regulate recreational marijuana for New Jerseyans over the age of 21.

Lawmakers approved Senate Bill 2703 in a committee meeting following four hours of testimony and an hour of deliberation by legislators.

The Assembly Appropriations Committee approved the measure in a 7-3 vote with one abstention while the Senate Budget & Appropriations Committee approved S2703 in a 7-4 vote with two abstentions.

“This will stimulate the economy of New Jersey like nothing ever has before,” S2703 sponsor Sen. Nicholas Scutari, D-22nd District, said prior to voting. “We’re on the precipice of a historic event here, starting something and creating jobs like no other legislature has done before. We have that opportunity.”

The measure still has to go before a floor vote in both chambers, after which Gov. Phil Murphy would have to sign the bill.

Murphy, at an unrelated press conference earlier in the day, would not comment on the bill, only saying that he was glad the legislative process has been moving forward.

“It’s too early to tell as it relates to exactly the elements that ultimately are written there,” Murphy said. “We’ll see, but happy to see the progress.”

The measure could still go through considerable changes and amendments before the full vote, and it is still not clear if the legislation has enough votes to pass when it goes for a floor vote. The last voting session for 2018 is on Dec. 17.

Senate Budget Chair Paul Sarlo, D-36th District, abstained from the vote to allow the bill to move forward. “I walked in here as a no-vote,” he said before voting. “Still not sure where I’ll be on the floor. If you asked me I would still be a no-vote on the floor.”

Senate President Stephen Sweeney, D-3rd District, a sponsor of S2703, said he has been pressing Murphy’s office to whip up support for the measure.

Murphy and Sweeney have contested the proposed tax rate for adult-use legislation, with Murphy saying he wants a tax rate closer to 25 percent, and Sweeney standing behind the 12 percent rate outlined in the current bill.

Proponents of the lower tax rate argue it would push illegal street dealers out of business, while a higher tax rate would push potential customers to those same dealers.

Municipalities with dispensaries would also have the option to levy a 2 percent excise tax, a rate lower than the 5 percent sought by the New Jersey League of Municipalities.

Sweeney and Murphy have also butted heads over how the marijuana industry should be regulate, with the current legislation calling for the creation of a five member commission. Sweeney wants membership to be a full-time position, while Murphy wants membership to be a part-time role.

Righting wrongs

Prior to the vote, Assembly Budget Chair John Burzichelli, D-3rd District, said tax revenue from the industry would not be a “money grab” for the state. Instead, the money would go toward running the state commission, educational purposes and to help towns with enforcement and regulation of the new industry.

“[This] does not reflect a windfall profit for New Jersey. It reflects a chance to get a few things right,” Burzichelli said.

Many proponents argued that the bill might give little in the way of state revenue, with the bulk of justification for legalization lying in the social justice aspect.

“This will right several wrongs that have been perpetuated throughout the failed War on Drugs,” New Jersey CannaBusiness Association President Scott Rudder said in a written statement.  “It will take cannabis out of the hands of drug dealers and the black market, and place it in a well regulated space that will allow small business owners to create jobs and pump money into our economy.”

The bill calls for the creation of an Office of Minority, Disabled Veterans and Women Cannabis Business Development to ensure those demographics actively participate in the legal industry.

S2703 also designates “impact zones,” which prioritize license applications from businesses in communities disproportionately affected by marijuana arrests, such as the state’s largest urban centers.

A separate bill which would expunge prior marijuana convictions from 10 or more years ago for those who have not re-offended also passed the joint committee Monday, with a 9-3 vote and one abstention in the Senate and 7-3 vote with one abstention from the Assembly.

“This pivotal moment determines whether New Jersey will become a model for what social and racial justice in legalization can look like,” ACLU-NJ Executive Director Amol Sinha said in a statement. “Or whether we’ll be another object lesson in roadblocks that prevented us from moving beyond the inequities of the drug war.”

Beyond social justice

But several business advocates were left uneasy, saying S2703 goes beyond social justice.

“Legalization is more than a social issue; it could have real impacts on the workplace, including the safety of workers,” New Jersey Business and Industry Association Vice President Mike Wallace said in a statement.

Wallace said that the legislation should allow employers to prohibit smoking weed at work or coming to work under the influence of marijuana.

“NJBIA is requesting that any legislation state clearly that legalization does not repeal or restrict the rights and obligations of public and private employers to maintain drug- and alcohol-free workplaces, or require an employer to permit or accommodate the use of marijuana, even it if is otherwise legal,” Wallace said

“We are especially concerned about occupations that involve driving, performing medical procedures and operating heavy machinery,” added Laura Han, director of government relations at the New Jersey State Chamber of Commerce.

Many careers are regulated at the federal level, according to Rudder, and so even if marijuana were legal under state law, users could still lose their livelihood for smoking weed.

“Until it’s reconciled at the federal level, we’re going to have that conflict,” Rudder said.

Medicinal makes moves

The Jake Honig Compassionate Use of Medical Cannabis Act was also voted out of committee on Monday.

The bill, which revises requirements to authorize and access medical cannabis, passed in committee with a 7-1-1 vote.

Sen. Ronald Rice, D-28th District, did not vote and Sen. James Holzapfel, R-10th District, voted no.

As part of the revisions, the state will begin phasing out taxes on medical marijuana beginning July 1, 2020 from the current 6.626 percent sales tax, to no tax beginning July 1, 2023.

Named for Jake Honig, who prior to his death by tumor disorder in January experienced great relief from his symptoms through medical cannabis treatment, the bill now heads to the Senate floor for further consideration.

Honig’s parents testified in front of the joint Assembly Appropriations and Senate Budget & Appropriations committee, telling them that their son experienced significantly more relief through medical cannabis than he did through prescription painkillers.

“The release of both the New Jersey Cannabis Regulatory Expungement Aid Modernization Act and Jake Honig Compassionate Use Medical Cannabis Act represents an important step forward after months of internal deliberations among sponsors,” Assembly Speaker Craig Coughlin, D-19th District, said in a written statement. “We will continue working the bills towards passage to create a well-regulated and inclusive marijuana industry that is rooted in social and economic justice.”

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