How N.J. could lose out on millions of dollars if it doesn't legalize weed soon

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2018 was supposed to be the year of legal weed in New Jersey.

Gov. Phil Murphy rode into office last January on a promise to quickly legalize marijuana. He said it would bring money and social justice along with it. But lawmakers couldn't get legal weed through the Legislature, and here we are in 2019.

It's still unclear when exactly the Legislature will vote on legalization.

As New Jersey debates the details, potential damage mounts. New Jersey risks losing out on millions of dollars in tax revenue as recreational marijuana gets increasingly palatable across the country. At the same time, people keep getting arrested for something likely to be legal soon.

Here are six ways New Jersey could lose out if lawmakers don't act on marijuana soon.

New York is gearing up for legal weed

New York is gearing up for legal weed

In mid-December, New York Gov. Andrew Cuomo gave a full-throated endorsement of marijuana legalization, echoing his cross-river colleague Murphy in calling it a social justice issue. Cuomo, who will be sworn in this month for his third term as the Empire State executive, said he wants to sign a legal weed bill in the first 100 days of his new term.

Yes, Murphy said similar things in 2017, and yes, New York still has miles to go before it could match New Jersey's progress on crafting a piece of legislation. Some of those closest to New Jersey's efforts to get legal weed said it would be tough for New York to catch up.

"The idea that they're just going to walk into Albany and put it on legislators' desks and get it approved -- that's just not going to happen," Bill Caruso, a marijuana lobbyist and member of the New Jersey Cannabis Industry Association, said last month. "I think it's going to take them some time to work through those issues."

But if things fall into place in New York and the debate continues to drag in Trenton, the two states could see the gap start to close.

The state is missing out on tens of millions of dollars

The state is missing out on tens of millions of dollars

If New Jersey were to somehow get beat to legalization by New York, the state would be leaving a lot of potential tax revenue on the table. Millions of people would likely cross the border to buy legal weed, based on estimates of New Jersey's potential marijuana market.

But no one is likely to cross the border to buy weed in New Jersey if it's also legal in New York. 

Hugh O'Beirne, president of the New Jersey Cannabis Industry Association, said that New Jersey's marijuana market would never be bigger than it would be in its first year, assuming it could legalize before New York and Pennsylvania.

Even without considering New York, the longer it takes to legalize marijuana, the longer the state goes without the additional tax revenue that legalization would generate. Had Murphy been successful in legalizing marijuana in his first 100 days in office, the state likely would be just weeks from opening its first pot shops and collecting tax on weed sales.

Instead, New Jersey is more than a year from opening any recreational dispensaries and recognizing the tax boost.

Dozens of people are still getting arrested for pot every day

Dozens of people are still getting arrested for pot every day

But it's not all about the money. Far from it.

In 2016, New Jersey police arrested more than 32,000 people for marijuana possession, according to a report from the State Police. At that rate, more than 87 people every day are arrested in the state for marijuana possession. Those arrests will keep happening until the governor puts pen to paper on the legalization bill.

The expungement system remains broken

The expungement system remains broken

Among the promises of legalization in New Jersey is that once possession and personal use of marijuana are allowed, people who have been convicted of those crimes will be given the opportunity to clear their records.

But pushing for marijuana expungements has exposed the deficiencies of the state's whole expungement process. Experts say the process is difficult and burdensome, and the state Judiciary doesn't keep track of how many expungements it grants every year.

"It is so ridiculously cumbersome," said Laura Cohen, director of the Criminal and Youth Justice Clinic at Rutgers, about the state's expungement system. "It's definitely a porous remedy."

In changing the process to facilitate marijuana expungements, lawmakers have started working on reforms to the wider expungement system. But without legalization, those reforms are unlikely to come.

Patients are facing a supply shortage

Somewhat lost in the legalization debate is a separate bill that would continue New Jersey's medical marijuana expansion that began under Murphy in 2018. Legislative leaders have tied the bills together, meaning the medical marijuana expansion is unlikely until the legalization bill is considered.

But as the number of medical marijuana patients in the state continues to climb -- now up to more than 40,000 -- the existing providers are having trouble meeting the spiking demand, a problem that would be somewhat alleviated if lawmakers pass the medical marijuana bill that's before them.

 

The black market continues

Until legalization is done, anyone in N.J. who's not a medical marijuana patient has to buy their weed from the black market, something that advocates and lawmakers alike have sought to diminish through recreational marijuana.

Plenty of words have been spilled over whether legalization can curb the black market, and how effectively it could be done in New Jersey would depend on several factors, including the taxes and how widespread dispensaries would be.

What's taken so long?

In short, debate and delay.

The debate has been generally healthy in New Jersey, manifested in how far the legalization bill has come since last January. Lawmakers have added ideas like weed delivery and social consumption lounges, while removing a cap on the number of businesses allowed in a legal weed market. Thinking on things like expungements has also evolved. But these changes take time, part of the reason the full Legislature hasn't voted on legalization yet.

But there's also been plenty of politics involved, further delaying legalization. Senate President Stephen Sweeney has said he won't go a penny higher than 12 percent on the tax rate, while Murphy wants something closer to 25 percent. Their unwillingness to compromise has definitely played a factor.

Legal weed poses problems

While legalization would have its benefits, none more than for people with marijuana possession convictions and for the state's coffers, this isn't an endorsement of legalization. Plenty of issues will likely arise from legal weed.

There's no clear-cut solution to the potential spike in people driving while high. Several states that have legalized marijuana have then seen an increase in traffic accidents. It's important to point out that it's unclear if the spike in accidents was caused by a spike in more stoned drivers. The solution offered by the state is to increase the number of drug recognition experts, police trained to spot intoxicated drivers, since there's no Breathalyzer for marijuana. Still, we don't know if more of these experts means safer roads after legalization.

If the state doesn't get the price of weed right, it likely won't get rid of the black market. If the tax is too high, meaning prices aren't comparable to the black market, people will keep buying from their dealer. If the tax is too low or if supply is too high, we could see legally grown weed make its way to the black market, as has happened in Oregon.

Other concerns include a potential increase in youth usage and employers still being able to test for marijuana even after legalization, though the results have been mixed in states that have made it legal.

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