New Jersey Votes to Approve the Legalization of Adult Use Recreational Cannabis

As expected, on November 3, 2020 New Jersey voted in favor of legalizing adult use recreational cannabis.  The proposed amendment to the New Jersey constitution passed by a wide margin, with about 67% of New Jersey voters in favor on the amendment.

New Jersey becomes the first mid-Atlantic state to legalize adult use recreational cannabis. New Jersey was not alone on this election day as Arizona, Montana and South Dakota also approved their cannabis ballot measures.

New Jersey and the others bring the total that have legalized adult use recreational cannabis to 16 states, plus the District of Columbia. New Jersey’s rule requires the purchaser to be 21 years old or older.  Purchases will be subject to a 6.625% sales tax, plus a local tax at the discretion of the town or city of up to an additional 2%.

Next up for New Jersey? The establishment of rules, regulations and implementation details regarding the industry. Because the New Jersey referendum was a non-binding ballot question, the legislature is now charged with creating and implementing rules in accordance with voter sentiments.

The state also has to consider how many licenses to issue for the cultivation, processing and sale of adult use recreational cannabis and how to issue them.  The measure doesn’t take effect until January 1, 2021. 

This may spur neighboring states to move forward on legalizing adult use recreational cannabis.  New York, Connecticut and others who have been discussing legalizing adult use recreational cannabis for some time may be incentivized to move quickly. I cannot imagine that the legislature of those neighboring states are going to be very happy seeing their residents cross the border to buy product in (and pay the taxes to) New Jersey.