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Reality Check 2019

Where We Are On Weed • James Campion NJ Finally Poised to Vote to Legalize, Tax & Regulate Recreational Marijuana

You know you’re close to actual legislation when committees are being formed, with fancy titles, and taxation has numbers to it and government officials, including the governor himself are going on the record with time tables. This means, at least as it currently stands, we are as close to an actual vote on the legalization of recreational marijuana in the state of New Jersey than we have ever been, and that is pretty damn cool and about friggin’ time.
“We’re still trying to machine this to get it over the goal line, but I think we’re all working really hard to get this done,” Governor Phil Murphy told reporters this week, tamping down too much excitement. “We’ve said all along that this is not a light lift.”

The pulling back of expectations is also a good sign, as NJ legislators begin massaging the vote with numbers that everyone can live with. We are just about through the morality bullshit stage where people warn against blood running through the streets and a plague of frogs. We’re into reality time here (oh, if only the federal government worked in this construct) and we’ll soon have people on record to how we shall continue to proceed into the 21st century.

With New York suddenly breathing down our necks, the Garden State needs to make this happen – beyond even the promises of Governor Murphy, who was supported in this space in 2017 for this and this only. It is a very lucrative and successful business model currently seeing a variant of successes in eleven states. But just like anything else going state-to-state without a federal law to back it up, these are vacillating experiences. Each state has taxed, regulated and policed the new laws in differing ways. In fact, some have “relaxed” restrictions now, sort of a test pattern of legislation most recently in Michigan, Utah and Missouri – in all cases the popularity of legalizing recreation weed is well over 60 percent.

Here in NJ we’re at 62 percent, but much higher among people under 50. How this is being represented by our…ahem…representatives will be determined. The measure needs 21 votes in the Senate to pass. The conservative estimate of absolute votes on record currently is 16. The hold up on some of these potential thumbs-up votes have to deal with reaching agreements on the initial number of licenses to be distributed and how many public consumption sites would be allowed. There is also language in the latest bill which include expungements — clearing marijuana convictions from criminal records – that has to be ironed out. But perhaps the most pressing hurdle was traversed over the past month when taxation was put to rest.

Ah, yes. Taxation. This is the main reason this space had called for this measure – beyond the hypocrisy of having alcohol, sport-book gambling, bear hunts, et al being legal, whilst a profitable substance is being viewed with an early 20th century lens. It is the money that could curtail the high cost of living in this state; property and school taxes being the big culprits. How lawmakers came to an agreement makes perfect sense, which scares me, because usually making sense is enough to doom any bill. “There will be a $42 excise tax on every ounce that is sold, regardless of price,” State Senator Nicholas Scutari told CBS News this week. “There will be a three-year look-back in case we need to reevaluate that because it is a possibility that the price goes down so low that $42 becomes unmanageably high.”

The reason why taxing by weight is important is the simple supply and demand shift in the pricing of a once illegal substance brought into the economic structure of a state. For instance, a Cuban cigar is somewhere in the range of $32 to $35 right now. A similar quality cigar, like my favorite, the Ashton Magnum, singularly goes for anywhere from $11 to $15. The mistake is in thinking that you’re taxing a $32 item once it is legally and thus readily available, but if the U.S. Congress were to lift the ridiculously meaningless embargo on Cuba the price of these cigars would plummet to the range of Dominican cigars (Ashton is Dominican), which are in the class, but in my estimation have not yet reached the level of quality of the Cuban. All of this, of course, effects how the cigars will be taxed.

There is not enough time to go into the ridiculously high tobacco tax here, but holy shit, man.
In essence, this kind of market shift is what happened to flat-screen TVs over the past decade-plus. What used to be a luxury item, priced as such, flooded the market and became pedestrian. And this is where the government has to be prepared to ride the decrease in price for the legalized brand of pot, as opposed to those who may still choose the black market to purchase theirs. I personally think it is silly not to since now one will know what one is actually buying.

The price of an ounce of marijuana has plummeted to half in the past year in Colorado, one of the first states to legalize it in 2014. It has reportedly generated over $5 billion in revenues for the state in the past five years, but I am not sure if Colorado legislators provided a failsafe for the free market to dictate the price, which it always will. My guess is they are getting hammered in their projections – for a good example of this see the federal government’s projections for the success (not) of the passing of the Affordable Care Act or the recent Republican tax reform law (not), which both woefully misread the actual pace of its returns. This is something governments due by rule. NJ has to be on this, and it looks like it is.

Governor Murphy originally wanted a tax closer to 25 percent, but with the tax-by-ounce agreement it will be closer to 12 percent to start. Either way the projections are good for added tax revenue immediately for the state.
All of this to say that we are close, as close as we can possibly be to getting there, but we are talking about votes and changing the laws dramatically for a controversial subject. Nevertheless, one that has rightfully been discussed in rational ways in the past half-decade leading to us profiting from it.
Hooray for the free market and democracy. Only a half century to make a plant legal.

© James Campion 2.22.19
realitycheck@jamescampion.com

Do yourself no favors and “like” this idiot at www.facebook.com/jc.author or, if you dare, follow on Twitter (@FearNoArt) and Instagram (@jamescampion)

James Campion is the Managing Editor of The Reality Check News & Information Desk and the author of “Deep Tank Jersey”, “Fear No Art”, “Trailing Jesus”, "Midnight For Cinderella" and “Y”. and his new book, “Shout It Out Loud – The Story of KISS’s Destroyer and the Making of an American Icon”.

** Published 06/16/2018 “Accidently Like a Martyr, The Tortured Art of Warren Zevon” Order the new book here.

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