Senate, Assembly break down on legalization despite bill moving forward

Daniel J. Munoz and Gabrielle Saulsbury //November 20, 2020//

Senate, Assembly break down on legalization despite bill moving forward

Daniel J. Munoz and Gabrielle Saulsbury //November 20, 2020//

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Talks to legalize recreational marijuana have stalled Thursday between the Assembly and Senate, with lawmakers locking horns on whether to cap the number of licenses, how to use tax revenue to finance social justice programs, and protections for businesses and workers.

“There will be two different bills coming out, and further negotiations between sponsors,” Senate Budget Chair Paul Sarlo, D-36th District, said at the start of the bill hearing.

Although the bills passed out of both the Assembly Appropriations Committee and the Senate Budget and Appropriations Committee, a Monday vote in the state Senate was canceled. Lawmakers now have to contend with two conflicting proposals.

One senior administration official said that “it’s a little bit unclear what the path forward is.”

“The Administration continues to engage in productive conversations with the Senate President and the Speaker to ensure that communities who have been disproportionately impacted by prohibition see the economic benefits of adult-use cannabis legalization,” Jerrel Harvey, a spokesperson for Gov. Phil Murphy’s office, said in an email.

Voters overwhelmingly approved the ballot question on Nov. 3 to legalize adult-use, recreational marijuana beginning Jan. 1, and to tax it at the 6.625% sales tax. A five-member Cannabis Regulatory Commission would oversee the market.

The CRC would handle licensure for facets of the industry such as distribution, wholesale, transportation, cultivation and retail. And they would prioritize licensing applications from women, minorities and veterans.

Sen. Nicholas Scutari, D-22nd District
Sen. Nicholas Scutari, D-22nd District – NJBIZ FILE PHOTO

“We have got to get this done by the end of the year,” the bill’s upper house sponsor, Sen. Nicholas Scutari, D-22nd District, said at the Assembly committee hearing Thursday morning. “If we don’t, we’re going to run into a myriad of other problems.”

An accompanying decriminalization measure – which is meant to act as a stand-in for legalization before its effective date on Jan. 1 – stalled in the lower house.

Assembly members cited concerns about an amendment that would lower the penalties for the possession of magic mushrooms – but that measure garnered the support of both Democrats and Republicans in the state Senate on Monday.

Sen. Teresa Ruiz, D-29th District, who sponsored the decriminalization bill, cautiously approved the Thursday bill to set up the market, saying the state first needed to approve the measure to eliminate the criminalization possession laws.

The legalization measure stalled last week, but Scutari and Senate President Stephen Sweeney, D-3rd District, struck an agreement with the governor’s office over a proposed cultivation excise tax.

That would come out to a fraction of a percent, which would be tacked onto the sales tax and come out to roughly 7%.

Both state senators maintained that the tax rate needed to stay low, so that it could allow the cannabis market to grow, and at a rate that the black market could be forced out of business.

“None of us really know how much it will generate, because we don’t know what this market will be,” said Assembly Appropriations Chair John Burizchelli, D-3rd District, said on Thursday. “We have to be careful not to place such a deep burden on the product that it can’t find its way to the marketplace.”

But the two houses remained at odds over whether to cap the total number of licenses in the early years of the market.

Scutari and Murphy agreed to remove the cap entirely, but the Assembly proposed capping the number of cultivation licenses at 38 for the first 24 months of legalization.

“My understanding [is]… that was a drafting error” in the Assembly version, but lawmakers “already voted on that and left” for the day,” said the one source close to the discussions.

And both chambers are disputing how the cannabis revenue would be split. The bill’s lower house sponsor, Assemblyman Jamal Holley, D-21st District, wants tax money to go toward a variety of social equity programs for lower-income, typically African American and Latino communities that have been hit hardest by the war on drugs.

Assemblyman Jamel Holley, D-20th District.
Assemblyman Jamel Holley, D-20th District. – JOSE ARCE

“A key component of cannabis legalization is addressing social justice concerns,” Holley, a member of the Legislative Black Caucus, said in a Thursday statement. “The fact that black New Jerseyans are three or four times more likely to be arrested on cannabis charges has contributed to the disenfranchisement of (Black) communities.”

He was not available for comment on Thursday.

“We are reviewing the Senate’s amendments. We have no further comment at this time,” reads a statement from Kevin McCardle, a spokesperson for the Assembly Majority Office.

The Senate’s version calls for setting aside 70% of the sales tax toward community programs, along with all the revenue from the cultivation tax. The remaining 30% of sales tax revenue would go toward the training of drug recognition experts, and to fund the CRC.

That was an improvement over the Assembly version, according to Rev. Charles Boyer, founder of Salvation and Social Justice, a racial equity organization.

“This bill still lacks firm, codified language that guarantees that funding from the excise tax is reliably allocated with real community input to the state’s impact zones,” he said in a statement. “We cannot allow this funding to become subject to the political whims of the state legislature.”

The two sides agreed to an amendment for the CRC to set up a process for licensing so-called drug recognition experts. Their job would be to gauge whether someone driving a car, or at the workplace, is under the influence.

But lawmakers at the Senate Thursday hearing clashed on whether they were based on sound science, and the cost and difficulty for employers to hire and train potential drug recognition experts.

Ray Cantor, vice president of government affairs, New Jersey Business & Industry Association
Ray Cantor, vice president of government affairs, New Jersey Business & Industry Association – NJBIA

“‘[The New Jersey Business and Industry Association] is opposed to placing additional burdens on employers that need to ensure their workplaces are drug-free for safety issues such as in critical infrastructure, chemical plants, and utilities,” reads a statement from Ray Cantor, their vice president of government affairs.

Lawmakers at the Senate committee pushed back, and Sen. Troy Singleton, D-7th District, said that “you’re creating two different classes of employees,” by trying to make an exception for those workers to be entirely free of cannabis.

“An individual who’s tested randomly on that site may have ingested marijuana two weeks earlier and is healthy as can be and is not high and not impaired at all, and unfortunately it’s going to show up in the system when they take the test,” Sarlo said.

But he and Scutari sparred on whether the drug recognition expert could actually tell if someone was not under the influence despite having cannabis in their system.