How New Jerseyans want the state to spend a social equity cannabis tax

As the state mulls how to spend the revenue generated from a social equity tax on cannabis, marijuana advocates say they want more funding for business programs, investments in communities hurt by the war on drugs, and access to legal counsel, both for entrepreneurs and people leaving prison.

The fee, required by the state’s marijuana legalization law, is imposed on cannabis cultivators and fluctuates based on sales. It generated $3.1 million in 2023, and the New Jersey Cannabis Regulatory Commission this week is seeking public input on how to spend it.

“The social equity excise fee is more than just a financial measure. It’s a step towards rectifying the injustices inflicted by the war on drugs,” said Marleina Ubel, senior policy analyst at progressive think tank New Jersey Policy Perspective.

Jeff Brown, the cannabis commission’s executive director, said the agency has no control over where the money goes but collects recommendations from the public to deliver to the governor and Legislature. He said the hearings are “crucial” in deciding where and how state officials will invest cannabis revenue.

Cannabis has brought in $62 million in total tax revenue since 2022. The social equity fee is set aside in a fund that can be used for legal services, apprenticeships, financial assistance, workforce development, and other programs.

The state shares some information on where the cannabis revenue funds have gone — anti-violence groups and a cannabis training academy are among the recipients — but there isn’t an accessible breakdown of where all the money goes.

The fee is set at $1.24 per ounce cultivated for 2024. State law allows it to rise as high as $10 an ounce.

Members of the public who spoke to commissioners during hearings on Tuesday and Wednesday emphasized the need to help people harmed by marijuana prohibition.

Mike Berry, a union organizer for some cannabis workers, said restorative justice and support for social services should be top priorities, especially in those communities. Cannabis attorney Natasha Andrews noted there is a need for reentry services for people reintegrating into society after being incarcerated for marijuana-related offenses. Dispensary owner Tyler Johnson said more grant money could help entrepreneurs struggling to find the money to get started in the industry.

“Most of the people I talked to can’t get their business off the ground,” Johnson said.

Ami Kachalia, campaign strategist at the American Civil Liberties Union of New Jersey, is among those who want New Jersey to hike the social equity fee. The state has millions in potential revenue that could go toward community reinvestment, she said.

“Increasing that SEEF from $1.24 an ounce to $10 an ounce allows the state to collect eight times as much revenue that could then be directed back to communities that have really been more harmed, and really increase this pot,” she said.

A third hearing is scheduled for Thursday at 1 p.m.