The push to make marijuana legal is sweeping the nation and New Jersey’s Democrat Governor Phil Murphy and Senate President Steve Sweeney want to jump on board. Billing it as a potentially giant revenue maker for New Jersey, they’re pushing to pass legalization this legislative session.
The Revenue Facts
Unfortunately, the windfall they claim will occur is only a dream. Moody’s Investors Service examined the results of legalized recreational marijuana in Colorado and Washington, two states that legalized recreational marijuana early and have the most established industries. It found that legalizing recreational marijuana produced only “limited” tax revenues, with little of that money flowing to the state’s or cities’ general funds. The report found that while revenues grew rapidly, they only make up a relatively small share of state general fund revenues and “therefore provide only modest budget relief.” Colorado’s gross revenues from recreational and medical marijuana sales in fiscal 2017 totaled only 2 percent of total general fund revenues. Washington’s revenue for the two-year period beginning in 2015 equaled only 1.2 percent of general fund revenues, the report found.
Moody’s also notes that in Colorado, almost half of revenue generated from marijuana went to the Marijuana Tax Cash Fund where it was used for marijuana-related programs such as enforcement, regulation, prevention and substance abuse programs. Only about 5 percent was directed to the general fund, representing only 0.1 percent of state general fund revenues.
When reviewing the District of Columbia and the nine states that have legalized recreational marijuana, the credit agency states there is “a marginal credit positive” to legalization; a far cry from the large revenue being suggested by proponents in New Jersey, a state that’s seen its fair share of financial misjudgments and disarray.
The report also notes that while growth in state and local government marijuana revenue has been strong in the early years, “the growth is likely to slow.” “Markets in the states that legalized early are already showing signs of stabilizing,” Moody’s said. “Also, as more states legalize recreational marijuana, states will face increased competition from their neighbors.” New Jersey has suffered the same affect from the legalization of gambling in adjacent states. The state has bailed out the city of Atlantic City, hotels and casinos in the last decade, while suffering the loss of thousands of jobs.
Phil Murphy wants a 25% tax on pot. The NJ General Assembly is resistant to the 25% rate the Governor wants. Sweeney is struggling with gathering the minimum 21 votes to pass in the state senate.
Implications for the Criminal Justice System
Some argue that legalizing marijuana will not just bring tax revenue to the state, but it will help reform a broken criminal justice system that has disproportionately harmed communities of color. State Senator Ron Rice D-Newark, a former Detective with the Newark Police Department, is demanding a study on the impact of urban communities legalizing recreational marijuana use in NJ.
Marijuana’s Legal History
So why is marijuana an illegal substance? For over 100 years we have known that Marijuana/ Hemp/Cannabis have psychoactive properties. The Food and Drug Administration has held since the Johnson administration that Marijuana is a gateway drug.
1937: The Marihuana Tax Act is enacted, effectively prohibiting cannabis at the federal level. Although medical use is still permitted, new fees and regulatory requirements significantly curtail its use.
1970: The Controlled Substances Act is enacted, officially prohibiting cannabis for any use (medical included) at the federal level.
1990: The Solomon–Lautenberg amendment is enacted. As a result, many states pass laws imposing mandatory driver's license suspensions for persons caught possessing cannabis, even if unrelated to driving.
2014: The Rohrabacher–Farr amendment passed the U.S. House and was signed into law. Requiring annual renewal, it prohibits the Justice Department from interfering with the implementation of state medical cannabis laws.
Because of its medicinal benefits in certain narrow circumstances, marijuana was legalized for medical use in the Garden State in 2010. That made marijuana a controlled substance.
In the mid to late 80’s the Founder and President of the Center for Garden State Families Gregory Quinlan, a nurse, worked with AIDS patients. Marijuana was illegal including for medical use. An AIDS diagnosis was terminal and the medication, AZT was the only treatment and was previously classified as toxic for humans. Health care looked the other way or passively encouraged the use of marijuana for AIDS patients. “I observed men who were so sick they could not hold down food from the AZT they were taking. They were extremely anxious and had multiple physical and emotional issues. The chemical properties in marijuana helped sedate them and allowed them to cope with daily life despite their diagnosis. Marijuana has an anti-emetic effect allowing them to keep food down and is anti-anorexic improving appetite. The pharmacologic properties of Marijuana had a positive effect in treating the adverse side effects of the other medications they were on as well has the effects of the disease process.”
But although the multiple chemical compounds in marijuana provide such benefits in certain medical situations, there are also downsides to its use. These downsides are both medical and social, and these costs far outweigh the benefits when viewed from a recreational standpoint. These costs will be discussed in part two of this series on why marijuana is a drug that should remain a controlled substance, not available for recreational use.
The Center for Garden State Families opposes
the recreational use of marijuana.
For more information on Marijuana visit our website here.