New Jersey Governor Proposes Increase to Cannabis Social Equity Tax

LOS ANGELES- Governor Phil Murphy has proposed raising New Jersey’s social equity excise fee on cannabis from $2.50 to $15 per ounce. This proposal aims to generate additional revenue for social service and violence intervention programs.

The social equity excise fee, paid by cannabis cultivators, directs funds to programs supporting communities disproportionately affected by previous cannabis prohibition. As of August 2024, the tax had accumulated over $6 million, which remains unallocated pending legislative action.

Senate President Nicholas Scutari expressed reservations about the proposed increase, citing concerns that higher taxes could make legal cannabis less competitive with illicit markets. He emphasized the importance of attracting consumers to legal dispensaries to ensure the regulated market’s success.

Governor Murphy’s proposal also includes extending the tax to intoxicating hemp products, such as those containing delta-8 and delta-10 compounds, which produce effects similar to THC. This expansion aims to regulate and tax these products within the state’s framework.