New Jersey Gov. Phil Murphy is proposing a significant tax hike on the state’s $1 billion adult-use marijuana industry and a new, even bigger tariff on intoxicating hemp products.
Murphy’s budget includes a fivefold increase in a per-ounce cannabis tax to $15 per ounce as well as a new $30 per-ounce fee on intoxicating hemp goods, the New Jersey Monitor reported.
The new marijuana and hemp fees are part of a broad package of items Murphy is proposing to tax – or tax more – in order to raise $1.2 billion in revenue, according to NJ.com.
Under Murphy’s proposal, the two taxes “are expected to generate an additional $70 million in revenue.”
That would be a major increase from the state’s current cannabis-tax revenue of $90 million.
Murphy’s plan also would also raise retail prices to unsustainable levels and buoy an illicit market that’s already attractive to price-conscious consumers, say critics such as state Senate President Nicholas Scutari.
“I don’t want to see our taxes for that product go up, which it already can’t compete with the gray market, the (illicit) market product,” he told the Monitor.
Large cultivators holding a Class 1 License in New Jersey already pay a $2.50 “social equity excise fee (SEEF)” that went into effect Jan. 1.
Raising that levy to $15 per ounce would be the second increase in quick succession.
State regulators voted to double the fee in December, up from $1.24.
At $240 per pound, New Jersey would have one of the highest per-pound fees in the country.
And, as the Cannabis Business Times noted, the state has yet to dispense any of the SEEF fees.
The tax on hemp products would be in addition to local sales taxes that Murphy imposed on increasingly popular hemp beverages in October.
Murphy is the latest Democratic governor to look to new cannabis taxes as a source of revenue.
In his annual budget proposal in February, Pennsylvania Gov. Josh Shapiro suggested a 20% tax in his pitch to legalize recreational marijuana.
