Still lacking deal, Murphy budget eyes $60M in legal marijuana tax money

The governor’s proposed budget calls for $60 million of tax revenue on legal marijuana for half the year, assuming lawmakers and Gov. Phil Murphy can agree on a bill.

If legalized adult use cannabis and the surrounding bureaucracy is implemented on Jan. 1, 2020, the budget projects $39 million in net revenue over the course of six months.

Twenty-one million dollars would go towards the first-time costs of getting the administration set up, according to Treasurer Elizabeth Maher Muoio, but over time that amount would flatten out at roughly $12 million a year.

Murphy campaigned on legalizing marijuana within his first 100 days of office, but his efforts fell flat as they stalled in the state Legislature. A deal struck in February calls for cannabis to be taxed at $42 an ounce, and for a five-person Cannabis Regulatory Commission to oversee the fledgling market. Murphy would be able to pick three seats requiring Senate approval.

The $60 million gross revenue estimate is based on the per-ounce-tax, according to a senior administration official.

“We haven’t seen final legislation yet so we had to make some assumptions,” the official said. “But the estimate doesn’t assume any licensing fees at this point. It’s based on the per ounce tax, and the assumption that the per ounce tax might phase up in steps.”

The departments expected to be responsible for the expenditures are the Department of Health, Department of the Treasury, Department of Agriculture and the Attorney General’s Office.

Additionally, the continued expansion of medical marijuana is scored for $20 million.

Daniel J. Munoz contributed to this report

Gabrielle Saulsbery
Albany, N.Y. native Gabrielle Saulsbery is a staff writer for NJBIZ and the newest thing in New Jersey. You can contact her at gsaulsbery@njbiz.com.

NJBIZ Business Events