- Voters in New Jersey passed Public Question 1, a constitutional amendment legalizing the consumption and sale of marijuana for adults over the age of 21.
- It will be some time before New Jerseyans are able to buy legal pot. The ballot measure kicks it to the state's legislature to enact the rules governing the new industry.
- At the very earliest, legalization wouldn't take place until January 1.
- The referendum fulfills a long-sought campaign promise from Gov. Phil Murphy.
Welcome to the world of legal marijuana, New Jersey.
Voters in the state passed a constitutional amendment legalizing the consumption of marijuana for adults over the age of 21, fulfilling a long-sought promise from Gov. Phil Murphy. The ballot measure, Public Question 1, also legalizes the sale of marijuana in New Jersey, subjecting recreational cannabis products to a 6.65% sales tax.
Local municipalities with dispensaries will also be able to put their own taxes on marijuana — capped at 2%. The ballot measure will kick regulation of the industry to the newly-formed Cannabis Regulatory Commission.
It's not likely that people in New Jersey will be able to legally purchase marijuana for some time. At the very earliest, the constitutional amendment would take effect on January 1, 2021. The state could see annual sales of up to $950 million by 2024, per industry publication Marijuana Business Daily's annual factbook.
As part of the ballot measure, it will now be up to New Jersey's state legislature to pass laws legalizing the sale of marijuana in the state before then.
That could be easier said than done.
The state legislature has previously failed to pass marijuana legalization since Murphy campaigned on that promise prior to his election in 2018. Many New Jersey Republicans are not friendly to legalization, and some Democrats, including State Sen. Ronald Rice, have raised concerns over the impact of selling the drug to communities of color.
New Jersey's legislature is also gearing up for a debate over equity issues, including how to grant a limited number of cultivation licenses, and how to ensure that communities most impacted by the drug war share the economic benefits of the newly legal industry.
Despite these challenges, the cannabis industry and the financial community are clearly excited about the prospect of New Jersey — with its easy access to New York City and Philadelphia — legalizing marijuana.
Cowen analyst Vivien Azer said in a note that New Jersey could be a tipping point that encourages other Northeastern states to legalize, including New York, Pennsylvania, and Connecticut, bringing hundreds of thousands, if not millions, of new consumers into the legal fold.
New Jersey's legalization is set to be a boon for cannabis stocks, as many large US cultivators already have invested significant resources in the state.
Curaleaf, analysts say, is well-positioned to benefit from the New Jersey market, as are Green Thumb Industries and the Canopy Growth-backed Acreage Holdings.
Key dates:
January 1 — Marijuana becomes legal in New Jersey
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