Newly elected New Jersey state governor Phil Murphy vows to fully legalize marijuana and use the projected $300 million in tax revenue to fund education and worker pensions.
With the newly-elected governor’s enthusiasm about the issue, the state’s pot advocacy groups are seeing a positive future for the state’s cannabis market. But analysts say that the numbers might just be too enthusiastic.
Spokesman for the New Jersey Policy Perspective Jon Whiten says that “the uncertainty at this point is how long it will take from the legislation being signed to stores selling product. Some industry folks are suggesting at least one year to write the regulations. So, bottom line, $300 million a year in [tax] revenue isn’t likely until 2020 at the earliest, but more like 2021.”
Analytics company New Frontier Data also predicts that sales wouldn’t top $1 billion until 2023.
However, not everyone is in consensus. Kate Bell of the Marijuana Policy Project says there’s a possibility that these forecasts can be underestimating the market, being their data based on federal polls where only 4 percent of NJ residents claim to be pot users.
Bell emphasizes that that figure is below the national average which is closer to 10 percent, according to a 2015 data from the National Institute of Health. She adds that they also failed to factor in the potential demand from neighboring states.
Levying tax on cannabis sales can be a bit tricky as any potential taxes slapped on the drug can scare away customers and ramp up the illegal pot market, a scenario that is already observed in states like Colorado.
Even with solid tax regulations, however, establishing a solid infrastructure that will help mobilize the legal marijuana market in the state would itself take time. In fact, ever since medical marijuana has been legalized in the state, there are still only six dispensaries serving NJ’s market of nine million people.
Given these conditions, Bell adds that New Jersey would most likely follow the footsteps of Oregon where it took two years for the market to completely ripen from legislation to sales.
“Absolute best case scenario,” Bell adds, “you’re looking at late 2019 [for statewide marijuana sales.]”