NJ marijuana legalization: Home grow, 400 legal weed dispensaries OK in new bill

TRENTON - New Jersey could become home to hundreds of legal marijuana dispensaries and users would be allowed to grow legal weed at home under new marijuana legalization legislation introduced Tuesday.

The bill, proposed by Assemblyman Reed Gusciora, D-Mercer, calls for a much more open market than first envisioned by proponents, with some 400 marijuana dispensaries and a lower tax rate on legal weed.

RELATED: Marijuana going mainstream against NJ legalization hurdles

The Senate and Assembly are expected to try and find common ground between Gusciora's bill and the one proposed by Sen. Nick Scutari, D-Union, which took a more conservative approach to the state's nascent legalization movement

Gov. Phil Murphy, as a candidate for the office he has held since January, made marijuana legalization a priority, citing social justice concerns. In his budget address Tuesday, Murphy said he was committed to passing a legal weed bill this year.

But marijuana legalization has become a galvanizing issue, with legislators on both sides of the aisle rallying against it.

POLL: Is support growing for legal marijuana in New Jersey?

Instead, some are proposing marijuana decriminalization, in which marijuana offenders would be subjected to penalties similar to a traffic ticket. It's one of many potential issues facing New Jersey's weed industry, which you can learn about in the video at the top of the page.

"We've seen from other states that the tax revenues from legalization pale in comparison to the costs associated with drugged driving, more hospital admissions, increased law enforcement, lost tourism dollars, and other costs to our communities," said Jeanette Hoffman, a spokeswoman for anti-legalization advocacy group New Jersey Responsible Approaches To Marijuana Policy.

In his budget address on Tuesday, Murphy said "decriminalization alone will not put the corner dealer out of business.

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"It will not help protect our kids and it will not end the racial disparities (in marijuana arrests) we see," he said.

Here are some of the main differences in the new marijuana legalization bill introduced Tuesday.

More marijuana dispensaries

At the New Jersey Cannabis Symposium in January, industry experts said a revised Senate bill would likely call for 80 dispensary licenses statewide. The number was met with groans by weed entrepreneurs looking for more business opportunities.

RELATED: Inside the cutthroat process to get a marijuana license in New Jersey

Gusciora's legislation falls on the other side of the spectrum. The bill calls for as many as 400 retail marijuana dispensaries, 10 in each of New Jersey's 40 legislative districts, with a minimum of two dispensaries in each.

There would be a limit of 11 dispensaries per legislative district, including one medical marijuana facility. If marijuana is legalized, it's likely that the cap on dispensaries will fall somewhere in the middle of the two bills.

"Where are we going to put them all?" asked cannabis consultant Brian Staffa, who said the possibility of 400 dispensaries was "exciting."

"Colorado is a great example, where 70 percent of the towns opted out. And if we had 70 percent of towns opt out in New Jersey, we'd run out of land," he said.

Lower tax rate on weed, more tax revenue for towns

The bill proposed by Scutari last year called for a gradually increasing tax rate, starting at 7 percent in the first year and escalating to 25 percent by year five.

Gusciora's bill starts at the same 7 percent tax rate for the first two years, before rising to 10 percent in the third and fourth years. It caps the marijuana tax rate at 15 percent beginning in the fifth year.

Like Scutari's legislation, Gusciora's bill also specifically outlines tax revenue for municipalities that allow marijuana operations.

During the first two years a marijuana business is in operation, 1 percent of tax revenue will go back to the local municipality. The town's share of tax revenue increases to 2 percent in the third and fourth years, and 3 percent in the fifth year and beyond.

The tax revenue could serve as an incentive for towns to allow marijuana businesses, as more and more follow the lead of Point Pleasant Beach in preemptively outlawing marijuana sales or weed businesses.

Under Scutari's plan, towns begin collecting 3 percent of tax revenue in the third year.

RELATED: Toms River weed ban stalled for now

“So many mayors and council people are asking, 'What’s in this for us?'” Staffa said. “I tell them to wait before they make a decision (on banning marijuana sales). This is huge for a little town.”

Information on transportation, growing licenses

The Senate marijuana bill did not include a specific number of licenses for any aspect of the cannabis industry. Gusciora's bill spells matters out in detail: The state would hand out 15 licenses to grow marijuana for the first two years, divided evenly among northern, central and southern New Jersey.

Check out our profile of these three cannabis-adjacent businesses

Another 10 licenses would be issued in year three, bringing the total to 25 growing licenses.

The state would issue 80 transportation licenses, two per legislative district.

Home growing legalized

Gusciora's bill allows New Jerseyans to grow up to six marijuana plants at home, but only three of those will be allowed to flower – when the drug is ready to be harvested – at the same time. Any municipality can pass its own ordinance outlawing home-grow operations.

Most states with legal weed have "home grow" regulations similar to those in Gusciora's bill. In those states, medical marijuana patients are often permitted to keep more plants than a recreational user.

Marijuana users can purchase full plants at a handful of dispensaries, while seeds are more widely available at dispensaries.

But Staffa, the cannabis consultant, is not confident it will be included in any final legalization bill.

One of the main incentives cited by legalization advocates, including Murphy, is the cost savings that come when police officers don’t have to investigate weed dealers or illegal growers.

“By allowing even the small number of home grows to persist, you open up that whole aspect of monitoring and regulating the hundreds or thousands of individual growers,” Staffa said. “That becomes an incredible task that has to fall upon the state or back on local police.”

There was no language allowing home grow in Scutari's bill.

It was a deliberate move, after a trip to Colorado in 2016 left him convinced that homegrown marijuana would contribute to the black market: What's to stop someone from selling homegrown marijuana at a cheaper rate – and without collecting taxes – than a dispensary?

Mike Davis; @byMikeDavis: 732-643-4223; mdavis@gannettnj.com