With recreational marijuana sales starting in New Jersey on Thursday, the Garden State is hoping to catch the same profit buzz that states like Colorado and California have enjoyed. But some experts caution the tax revenue won’t be enough for a high and mighty economy.
“Legalizing this market does bring some revenue gains, but states also need to be careful before they start cutting that cash understanding just how much it is,” Jared Walczak, Tax Foundation vice president of state projects, told FOX Business’ Lydia Hu.
After three previous failed attempts at the legislation, New Jersey passed its recreational bill in 2020 that permits any person 21 or older to purchase up to one ounce of cannabis and possess no more than six ounces.
The Garden State is now one of 18, plus the District of Columbia, to legalize recreational marijuana. California became the first state to legalize medical marijuana in 1996.
CALIFORNIA CANNABIS MEGA-FACTORY EYES FEDERAL LEGALIZATION OF WEED
Colorado cashed in a record $423 million in tax revenue from marijuana sales last year, according to its Department of Revenue, and nearly $2 billion since 2014. In 2020, California collected more than $1 billion in revenue, and Illinois recreational marijuana sales reached nearly $1.38 billion in 2021, more than doubling the total from 2020.
But experts raise flags that the influx of taxpayer money may not greatly impact a state’s economy.
Hu pointed out on “Mornings with Maria” Thursday that California’s tax revenue from recreational sales last year only accounted for 1% of its annual budget.
“It’s not fundamentally changing the revenue picture,” Walczak said.
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Meanwhile, White House press secretary Jen Psaki stated Wednesday that President Biden is reviewing his clemency powers related to marijuana drug charges. Earlier this month, the House passed legislation that would decriminalize weed on the federal level. The measure is expected to face headwinds in the Senate.
While New Jersey might’ve missed the 4/20 “holiday” by just one day, they’re expecting the budding industry to roll in $4 million in tax revenue through June 30.
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