While New Jersey marijuana legalization may be inching closer to reality, the idea of legal weed taxes serving as a revenue windfall is likely just a fantasy, according to a legislative fiscal impact study.

The Office of Legislative Services, a nonpartisan Statehouse bureau that assists with crafting and studying legislation, estimates that New Jersey would bring in a little over $210 million in state taxes from nearly $1.8 billion in annual marijuana sales, according to its fiscal impact study of the legal weed bill.

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That estimate was derived from comparing New Jersey and Colorado populations in 2017, as well as Colorado marijuana sales that year. It represents less than 1 percent of the nearly $38 billion state budget.

“It’s hard to say whether it’s going to be a huge revenue stream. I don’t think it’s going to have a huge impact in terms of trying to reduce property taxes,” Rutgers University-Camden associate public policy professor Michael Hayes said. “In the short run, it’s kind of hard to really know how this is all going to play out — particularly because there’s not a piece of legislation that’s passed yet."

As written, the legal weed bill would give New Jersey the cheapest marijuana tax in the nation. Gov. Phil Murphy's office called for a 25 percent marijuana tax in its 2019 budget.

Instead, the marijuana legalization bill comes with a 12 percent tax — including the standard 6.625 percent sales tax and a 5.375 percent marijuana tax — with a potential 2 percent tax levied by local municipalities hosting marijuana dispensaries.

Revenue is expected to be "significantly lower" for the first few years, the OLS warned. In 2014, Colorado saw about $300 million in legal weed sales in its first year of marijuana legalization.

That's less than 28 percent of Colorado marijuana sales in 2017.

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Experts have said New Jersey — especially if legislators legalize weed before New York and Pennsylvania — could be the home of a billion-dollar cannabis industry, due to its population and location in the busiest area of the country. The closest state with legal marijuana is Massachusetts, where dispensaries opened last month.

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"This will stimulate the economy of New Jersey like nothing ever has before," marijuana legalization sponsor state Sen. Nicholas Scutari, D-Union, said last week before a legislative committee voted to advance the legal weed bill he drafted. "We’re on the precipice of a historic event here, starting something and creating jobs like no other Legislature has done before. We have that opportunity."

But that industry will be reliant on “how quick the market responds,” especially if the state puts up “a lot of barriers for entry,” Hayes said.

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“It’s a new market, and you have the potential for new businesses to be established in the agricultural sector and on the retail side,” Hayes said. “In the long run, I think you’ll see some employment growth as a result, but in the short run?

"It depends on how fast these businesses can be established — and that all depends on what rules are in place.”

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

This story has been updated to correctly state New Jersey's total budget.