New Jersey cannabis advocates reacted to the recent news of the slight increase in the Social Equity Excise Fee by the NJ Cannabis Regulatory Commission (NJCRC).
The NJCRC raised the tax paid by cannabis companies to $2.50 an ounce of usable and unusable cannabis versus the $30 an ounce initially announced. The law mandates that the tax increases as the price of New Jersey adult-use cannabis goes down.
NJ Cannabis Trade Association Lobbyist Reacts
The NJ Cannabis Trade Association (NJCTA) was happy that the NJCRC lowered the Social Equity Excise Fee (SEEF) Tax increase.
“The New Jersey Cannabis Trade Association appreciates the CRC’s deliberative and thoughtful approach in setting next year’s rate. And their willingness to listen to the concerns of the thousands of cannabis industry stakeholders and consumers who expressed grave concerns about the ramifications of a drastically increased SEEF,” NJCTA Executive Director Todd Johnson said.
“From outreach to the Governor’s Office, and the Legislature, to Stakeholder Listening Sessions and direct advocacy with the Commission, the NJCTA is proud to be the voice of the licensed cannabis industry,” he declared. “The NJCTA is hopeful this moderate increase will allow operators to navigate the increased cost of operations without requiring material price impacts for consumers.”
“We strongly support a change in the SEEF mechanism to ensure that when funds are raised and reinvested in underserved communities, it is done so purposefully and intentionally to achieve the intentions of CREAMMA while allowing the cannabis industry and budding entrepreneurs to thrive,” Johnson added.
Product Taxes and Prices
“If the SEEF had been raised to the allowable amount of $30 per ounce, there is no question that prices would increase 15% or more for consumers,” he claimed.
“We’re hopeful the growing number of cultivators entering the New Jersey market will further increase product diversity. And allow the current trend of declining prices to continue at a steady rate,” Johnson added.
The NJCTA represents licensed companies only. So, the largest Multi-State Operators (MSOs) in the New Jersey cannabis were their first members. They were followed by some of the new local adult-use cannabis companies.
Its members have collectively controlled legal New Jersey cannabis prices for years.
In many other legal cannabis states, like Oregon, licensed companies have problems when their legal cannabis is too cheap.
Former NJCRC Executive Director Jeff Brown said more than once competition would help lower NJ cannabis prices.
Many consumers expressed concerns online that it would noticeably increase the retail price at the store.
The price has been going down gradually, according to the NJCRC’s data.
A lot of licensed cannabis dispensary owners remain unhappy about competition from intoxicating hemp smoke shops and underground legacy sales cutting into their proposed revenue projections.
Social Justice Versus Affordable Prices
ACLU advocate Ami Kachalia defended raising the increase at the last NJCRC meeting. She said it would help the minority communities most hurt by the War on Drugs.
“I’m ok with raising that tax. It was already a kind of low bar,” NORML legalization cannabis advocate and Heady NJ guest writer Chris Goldstein said.
“If the price goes down, then the tax isn’t that much, and they will not feel it,” he argued. “They won’t see it go up a buck because the prices are already going down to offset.”
NJ Cannabis Price Issues
Goldstein noted Pennsylvania’s medical cannabis market is more affordable than New Jersey’s, while large MSOs similarly dominate it.
“New Jersey is the most expensive (state cannabis market), and it’s not even close!” he exclaimed.
Goldstein criticized the low quality and high prices of the NJ cannabis market.
“New Jersey legislators sold out, and these companies are getting away with price gouging!” he argued.
“There’s no way a business can succeed selling $75 Domino’s Pizza!” Goldstein declared.
Local cannabis growing applicants have told Heady NJ it takes millions of dollars to operate a legal cannabis growing operation. So, getting many licensed growers operational has been hard. Thus, progress has been slower on prices versus dispensary locations.
Defending the Social Equity Excise Fee
He defended increasing the tax to fund social justice goals.
“It’s not a huge tax in the grand scheme of things for all the money that’s made in the market,” Goldstein explained.
“The state has to anticipate the price going down, so they need to charge more to get the revenue they need,” he said.
Goldstein noted towns have seen money from adult-use cannabis tax revenue funds for different social justice goals.
Some of those goals include helping minority entrepreneurs.
He added many social justice cannabis advocates did not want money to go to the police.
(The NJ State Flag is pictured above, along with cash.)
