Editor’s note: Election results reported are projected, and subject to change. CBT/CD will update its election coverage as necessary to accommodate changing election results.
New Jerseyans have voted to approve Public Question No. 1, which amends the state constitution to legalize cannabis for adults aged 21 and over, as well as the cultivation, processing and sale of recreational cannabis products, by a 67-33 margin, according to unofficial election results reported by the New York Times at 9:48 p.m. ET.
The ballot initiative does not spell out a regulatory framework of any kind.
The Public Question No. 1 referendum comes after years of failed attempts to legalize adult-use cannabis in the state legislature.
This year’s referendum effort raised more than $2 million in campaign contributions, most of which were given to cannabis-legalization campaign NJ CAN 20 and political advocacy group Building Stronger Communities Action Fund.
NJ CAN 2020’s coalition included the American Civil Liberties Union (ACLU) of New Jersey, Minorities for Medical Marijuana (M4MM), the National Organization for the Reform of Marijuana Laws (NORML), the National Association for the Advancement of Colored People (NAACP), Law Enforcement Action Partnership, Progressive Democrats of New Jersey, and other industry members and stakeholders.
The initiative received a full-throated endorsement by New Jersey Governor Phil Murphy. “$150 million. That’s what processing marijuana arrests costs New Jersey taxpayers every year—arrests that disproportionately impact young people of color and make it harder for them to get a job, a place to live, even a credit card. … Join me in correcting this wrong by voting ‘yes’ on Public Question No. 1 to legalize and regulate adult-use marijuana,” said Murphy in a video advertisement for NJ CAN 2020.
The NJ CAN 20 campaign also worked to ensure voters knew the question was on the ballot, and not to mistakenly skip it on the back page. A #TurnthePage campaign was promoted on social media, by Gov. Murphy as well as Senator Cory Booker (D-NJ).
“This is great news for the Garden State but the work is not over,” said representatives from NJ CAN 20 in an emailed statement to Cannabis Business Times (CBT) and Cannabis Dispensary (CD). “Now, the legislature must immediately act to end arrests and establish statutory guidance on legalization. We are hopeful that legislation will pass and be signed into law later this month and that adult use sales could begin in NJ in the 3rd or 4th quarter of 2021.”
NJ’s Past Legalization High Hopes and Setbacks
Medical cannabis in New Jersey became law in 2010 under the Compassionate Use Medical Marijuana Act (CUMMA); however, the state’s previous governor Chris Christie (R) was staunchly opposed to legalization and held up the program’s implementation while he was in office.
Christie vowed to crack down on state cannabis programs federally during his presidential run in 2016, and going so far as to say cannabis would “poison our kids” and that taxes from legalization would be “blood money” in a speech in 2017. (In 2018, Christie made comments that suggested he has since softened his stance and now views legalization as a states’ rights issue.)
When Christie left office in 2017 and Gov. Phil Murphy came into power, Murphy promised to legalize cannabis within his first 100 days in office. New Jersey cannabis lobbyists tripled their spending in the state the following year. However, efforts to legalize adult-use in the legislature fell short when disputes over taxation remained unresolved.
According to POLITICO, Scott’s Miracle-Gro Company, which owns the cannabis hydroponic product distributor Hawthorne Gardening Co., was the largest financial backer of this year’s effort, contributing $100,000 to NJ CAN 20 and $700,000 to Building Stronger Communities Action Fund.
More than 60 percent of New Jerseyans are in favor of adult-use legalization, according to data collected by an April 2020 Monmouth University Poll.
Today, New Jersey’s medical market includes more than 86,000 patients, as well as an expanded qualifying conditions list, reduced barriers for young patients, and sales tax rate reductions since the program’s start.
The amendment to legalize adult-use cannabis will take place on Jan. 1, 2021; however, experts anticipate it will be at least a year before adult-use cannabis will be ready for sale, according to Patch.com. Lawmakers are now tasked with determining how the program is run, including restrictions and regulations, and a licensing process. Officials must also establish and appoint members to the state’s Cannabis Regulatory Commission, according to NJ.com. (The commission was established under the Jake Honig Compassionate Use Medical [Marijuana] Cannabis Act in July 2019.) The legislature will likely look to State Senator Nicholas Scutari’s recreational marijuana legalization bill from 2018 as a legal framework. According to POLITICO, an enabling bill could be introduced as soon as Thursday, Nov. 5.
The initiative does not affect the state’s current medical cannabis program nor its hemp program, Patch.com reported.
Cannabis industry research firm Brightfield Group projects that an adult-use cannabis market in New Jersey could see more than $352.6 million in sales in 2021, and nearly $649 million in sales the following year. By 2023, Brightfield estimates recreational sales in the state to be more than $1 billion. These figures assume that voters will approve adult-use legalization, and Brightfield makes these projections “for states that we think have a good chance of legalizing,” according to Brightfield Group’s Alyssa Jank.
Industry members anticipate that New Jersey’s legalization may also influence legalization in neighboring states and throughout the country.
“If New Jersey votes in favor of adult-use cannabis, then the pressure will be on Pennsylvania, New York, and even Connecticut to also legalize adult use, otherwise, they will lose significant tax revenues to New Jersey as customers cross state lines to purchase cannabis (even though it remains federally illegal to return from out of state with cannabis),” according to Patricia Baldwin Gregory, general counsel for Pennsylvania-based medical cannabis dispensary operator Keystone Canna Remedies.
Industry groups echo this sentiment. “Regionally, passage of this initiative is certain to add urgency to adult-use cannabis regulation efforts in states like New York, Pennsylvania, Connecticut, Delaware, and Rhode Island. On the national stage, New Jersey’s sizable population and relatively large congressional delegation is likely to add significantly to the growing chorus of federal lawmakers calling for an end to prohibition,” according to a statement from the National Cannabis Industry Association emailed to CBT and CD.
In an emailed statement, Marijuana Policy Project Executive Director Steve Hawkins told CBT and CD, “This victory will undoubtedly have a rippling effect in the Northeast and add to the increasing pressure in neighboring states to take action on marijuana legalization.”
More Industry Reaction
“By moving to end this fiscally wasteful and morally repugnant policy, state officials will now be able to prioritize law enforcement resources toward combating more serious criminal activities, better respect the personal freedom and civil liberties of their citizens, end the racist application of marijuana prohibition laws against communities of color, and direct new tax revenues toward important social programs such as education and infrastructure development,” said NORML Executive Director Erik Altieri in an emailed statement.
“Their first priority should be bringing about an end to the tens of thousands of low-level marijuana possession arrests that occur each year in New Jersey. Once this is accomplished, they should then expeditiously move forward to meet voters’ second demand, which is to initiate regulations to license and oversee the commercial cannabis market in New Jersey,” Carly Wolf, NORML’s State Policies Coordinator, commented in an emailed statement.
In response to how New Jersey legalization could affect the country overall, Gregory of Keystone Canna Remedies said, “The population in the Northeast equates to the aggregate population in the adult-use states of California, Oregon, Washington, and Colorado. Projected sales for these Western states in 2020 is approximately $8 billion, representing approximately 50% of the entire U.S. industry. While initially, the Northeast is not likely to produce the level of sales seen in the mature Western markets, over time they will rival them and consequently move the needle significantly.”