By Sam Sutton
02/16/2019 09:00 PM EDT
Significant details of a bill to legalize recreational cannabis in New Jersey still need to be finalized, even though Gov. Phil Murphy, state Senate President Steve Sweeney and Assembly Speaker Craig Coughlin have reached a broad agreement on key elements of the measure, three sources close to the discussions said Saturday.
There still isn’t a consensus on the rate at which local governments could tax recreational cannabis sales, which the current bill caps at 2 percent. Local governments, led by the New Jersey State League of Municipalities, Newark Mayor Ras Baraka and Jersey City Mayor Steven Fulop, want to impose a tax as high as 5 percent to pay for some of the necessary changes that will come with legalized pot.
“That’s still being worked out,” said state Sen. Nicholas Scutari (D-Union), the legalization bill’s lead sponsor and a central player in negotiations between the governor’s office, Sweeney (D-Gloucester) and Coughlin (D-Middlesex).
“We still believe that the flexibility to pass an up to 5 [percent] local excise is appropriate,” Michael Cerra, assistant executive director for the League of Municipalities, said in an email. “We don’t view … that as a line in the sand however and hope that since it now appears that the other major issues are close to resolution that we can have that discussion.”
Scutari emphasized that while the principal players have agreed on a framework for the bill, NJ S2703 (18R), there are still elements that need to be hashed out. Another point being discussed, he said, would give the commission tasked with regulating the industry the authority to review cannabis sales tax rates in the future.
Under terms agreed to this week, the Senate will waive the advice and consent process for Murphy’s three picks to the five-member Cannabis Regulatory Commission. The parties also agreed to a $42 per-ounce tax on recreational cannabis sales, as opposed to basing the tax on a percentage of the sales price, sources close to the talks said.
Disagreements over taxation and regulation were the primary stumbling blocks to getting Murphy on board with the legislation. With an agreement in place, all three leaders will start whipping votes in support of the bill.
By Nikita Biryukov
New Jersey Globe
Legislative leaders and Gov. Phil Murphy may be nearing a deal on marijuana legalization, State Sen. Nicholas Scutari (D-Linden) told the New Jersey Globe Thursday.
“There’s a possibility that we have an agreement by next week,” Scutari said.
Marijuana legalization stalled last year after opposition from within Senate President Steve Sweeney’s caucus stopped the marijuana legalization package from reaching a 21-vote threshold in the legislature’s upper chamber.
Part of the trouble there may lie in Murphy and legislative leaders butting heads over the tax rate for recreational marijuana sales.
If the two reach a deal, they may be able to gin up the 21 votes needed to pass the measure.
By Susan K. Livio
NJ Advance Media
State Sen. Nicholas Scutari, the prime sponsor of the bill to legalize adult-use marijuana in New Jersey, told NJ Cannabis Insider he’s “losing faith” that Senate Democrats and Gov. Phil Murphy will come to an agreement.
The concern is so acute Scutari said he and state Senate President Stephen Sweeney have discussed letting the voters decide by putting the issue on the November ballot that, if approved, would amend the state constitution.
“It’s not my preference,” said Scutari, D-Union, “but I think it might be a lot easier to let the people decide.”
It would likely be easier to win votes in the state Senate and Assembly for a ballot question than an outright vote on legalization, he added.
The state Legislature would need to pass a bill by three-fifths majority to put a question on the November ballot, according to the state constitution.
Scutari said one of the latest compromises Sweeney, D-Gloucester, verbally offered a month ago would let the governor choose three of the five members on the proposed Cannabis Regulatory Commission — without the legally mandated “advice and consent” of the Senate.
Payton Guion | NJ Advance Media
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.
With a shrinking marketplace for their products, tobacco companies — unsurprisingly — are looking to adapt to the changing marketplace.
Take, for instance, the maker of Marlboro cigarettes, Altria.
Last month, Altria announced it was abandoning its e-cigarette brands as it eyed “reduced-risk tobacco product opportunities,” including but not limited to a minority ownership stake in Juul, as well as a partnership with Philip Morris on its tobacco vape, pending FDA approval.
Also, you may have heard Altria invested nearly $2 billion in Cronos Group, the Canadian cannabis company, purchasing a 45 percent ownership interest with an option to acquire more.
Altria is the fourth largest tobacco company in the world, with Philip Morris International, British American Tobacco, and Imperial Tobacco taking the top three spots, respectively.
What does this mean for the cannabis industry as a whole?
Efforts to legalize marijuana gained momentum when the legislation sailed through multiple committees two weeks ago — only to have it all grind to a halt again as Gov. Phil Murphy and the Democratic lawmakers have since refused to meet.
A private negotiating session scheduled for Thursday will likely determine whether or not they end 2018 keeping a public promise to end pot prohibition.
Representatives for Murphy and Assembly Speaker Craig Coughlin, D-Middlesex, confirmed the meeting and that cannabis is on Thursday’s agenda. It’s likely the last time the governor, the speaker and Senate President Stephen Sweeney, D-Gloucester, will meet before 2018′s last scheduled voting session is held on Monday.
Sweeney said he’s still holding out hope the meeting will lead to an accord on the final sticking points on the bill legalizing marijuana for adults 21 and over.
“Until we have communication with the governor, we won’t know,” Sweeney said.
Murphy remains opposed to creating a full-time Cannabis Regulatory Commission that would be empowered to control the industry, including the medicinal marijuana program. The latest version of the bill requires an examination at the three-year mark to see if the commission is doing its job and should be scaled back. It’s a compromise acknowledging the governor’s concern about having too much power, Sweeney said.
“We felt a full-time commission, to deal with the licensing, was important. It was what they did with casinos” after gambling casino gambling was legalized Sweeney said.
Murphy has declined to publicly discuss what he finds objectionable in the marijuana legislation.
Coughlin last week told NJ Cannabis Insider he still believes a deal still can be reached and that he was “not ready to give up on Dec. 17.”
Hugh O’Beirne, president of New Jersey Cannabis Industry Association, said he doesn’t have a problem waiting a little longer for a compromise.
“I don’t think this is kicking the can down the road. I actually think there are real issues in the state that sort of caution a careful approach, which means getting it right and getting the requisite buy-in from the legislature and the municipalities,” O’Beirne said.
Gov. Phil Murphy wouldn’t say on Monday whether he supported the marijuana legalization bill being pushed by Assembly Speaker Craig Coughlin and Senate President Steve Sweeney, even as both legislative budget committees held a hearing on the bill.
“We haven’t commented on specifics, but I’m very happy that this is moving,” Murphy said following an unrelated press conference Tuesday. “This is first and foremost for me, and I’m going to reiterate this, a matter of social justice.”
Murphy’s refusal to endorse or condemn the bill could sidestep a fight between him and the two legislative leaders over provisions in the bill that the two sides have long disagreed on. At the very least, it will likely delay such a conflict.
The 12% tax rate sought on marijuana sales by Sweeney and Coughlin is significantly lower than the rate sought by Murphy’s administration. Murphy’s team prefers a tax rate of roughly 25%, a figure that falls much closer to those of states like Washington, which levies a 37% sales tax on marijuana, and Massachusetts which taxes marijuana sales at 30%.
The plan proposed by legislative leaders would also allow municipalities to levy a 2% tax on marijuana sales, but even at 14%, New Jersey’s tax on marijuana would be among the lowest in the nation.
They say they want to keep the tax rate relatively low to keep consumers from going back to the black market to purchase marijuana, but they have moved from their initial offer of a 10% tax rate.
“I’m encouraged it’s moving in the right direction, and it’s too early to tell as it relates to exactly the elements that, ultimately, are in there,” Murphy said.
Still, none of this matters unless legislative leaders can drum up enough votes to get the bill to the governor’s desk.
Passage is far from certain since even some lawmakers who voted measure out of joint committee indicate they’re not ready to say ‘yes’ in December legislative session
After a long, heated debate on a bill to legalize recreational marijuana for adults, a joint committee hearing of both the Senate and Assembly released on Monday the proposed law that would make New Jersey the 10th state to do so. The bill could be considered by the entire state Legislature as soon as December 17.
But whether the bill will pass remains in doubt. At this point, Democrats do not have enough votes to see it through, at least in the Senate. It takes at least 21 votes to pass legislation in the upper house; currently, there are only 20 votes in favor, at best.
In addition to legalizing recreational marijuana, the joint bill would also set up a process to expunge the criminal records of those previously convicted of possessing or distributing small amounts of cannabis. Erasing those records could remove barriers affecting college, employment, and housing options.
Cutting off comment
An overpacked hearing listened to four hours of testimony pro and con before Senate Budget Committee Chairman Paul Sarlo (D-Bergen) took the unusual step of shutting down public comment with about 40 people still listed to speak. Many of those who testified took issue with various provisions of the bill, rather than the entire measure. But because the bill language was not available to most of the public before the hearing, it was unclear whether some objections had been addressed in amendments. What’s more, a number of legislators seemed confused about the contents of the measure. Nevertheless, committee members forwarded the bill (S-2703/A-11) to the entire Legislature without changes.NJ Spotlight published anyesterday.
Liz Acevedo, a spokeswoman for Assembly Speaker Craig Coughlin (D-Middlesex), said that the speaker and Sen. President Steve Sweeney (D-Gloucester) are in talks with the Murphy administration. “The Speaker is confident the bill will pass when it is posted for a vote in the full Assembly,” she said.
The bills might never have made it out of the committees if Democratic leadership hadn’t substituted members who solidly supported the measures on each panel. In both houses, three lawmakers sat in on the hearing and voted in place of other members. And even some of those who voted to release the bills — including Sarlo and Assemblyman Gary Schaer (D-Passaic) — said they may not vote in favor of final passage.
Getting beyond ‘no’
In the Senate, replacing budget committee members Nilsa Cruz-Perez of Camden County, Linda Greenstein of Mercer, and Brian Stack of Hudson left their support in doubt. Five others are “no” votes at the moment: Nia Gill, Ronald Rice, and Richard Codey, all of Essex, Nicholas Sacco of Hudson and Shirley Turner of Mercer. Codey and Rice are considered definite “no” votes, but it is believed Gov. Phil Murphy might be able to sway other Democrats to support the bill.
“We are going to work on them, but we are also going to work on some Republicans,” said Sen. Nicholas Scutari (D-Union), the key sponsor of the bill, along with Sweeney. Sen. Declan O’Scanlon, a Republican based in Monmouth County, abstained but said he could be swayed to support the bill if it is amended to address some of his concerns.
Sweeney said he won’t post the bill for a floor vote until there is enough support for it.
Murphy vs. Sweeney (again)
There appear to be at least two sticking points between Murphy and Sweeney. The governor, who ran on a platform calling for legalization, originally wanted to impose a 25 percent tax on marijuana to bring $300 million into the state’s coffers, but with the two top Democrats arguing over the percent, and half the year gone, it’s not likely the state will see that much money. And Sweeney wants only a 12 percent tax. Another issue, according to the Senate president, is that the bill calls for a paid five-member board to oversee and regulate the cannabis industry, rather than a volunteer, advisory board.
“When we first allowed legalized gaming in the state, we created a part-time commission that was wrought with corruption,” said Sweeney, who also filled in on the committee and voted for the bill, of which he is a co-sponsor. “But on the creation of this industry, we want a full-time commission that has nothing else in terms of responsibilities.”