Singleton Bills to Address Cannabis Laws on Tax, Homegrow, & Cost


cannabis law troy singleton homegrow

As the NJ Senate debates a new compromise bill, Troy Singleton (D-Burlington) is working on several bills to change cannabis law including a bill to decouple the state income cannabis tax law from federal income taxes, a bill on medical homegrow, and a dispensary purchase subsidy bill.

Three of the Senators in the Black Caucus are needed to vote for cannabis law being sponsored by Senator Nick Scutari (D-Union). They include Senators Nia Gill (D-Essex), Sandra Cunningham (D-Hudson), Shirley Turner (D-Mercer), and Troy Singleton himself. That would assume Senator Ron Rice (D-Essex) votes against it, which is likely.

“I’m hopeful both bills bill will be signed quickly. We need the regulated market and guard rails,” Singleton said. “We arrest far too many people in the State of New Jersey. I hope the Governor signs bills, and we figure out the larger conversation on the regulated market.”

Legislators are concerned they won’t meet the deadline of Monday, February 8th. It’s the first Assembly Quorum 45 days after the enabling and decriminalization bills on December 17th. No deal has been reached in the Senate. So the Assembly will be forced to move its quorum to give Trenton more time to make a deal. That means that New Jersey’s governing will be stopped from proceeding during a pandemic and economic recession. So a deal can eventually be made.

Troy Singleton on Homegrow

“By authorizing homegrow and subsidizing product sold at medical dispensaries, similar to how we cover other medications, we can ensure that cannabis is accessible to all potential medical users, regardless of income,” he said.

Singleton’s homegrow bill is S. 3420, “Authorizes home cultivation of medical cannabis.” However, no text is available to the public yet.

“We know that medical cannabis has the potential to treat a vast range of health conditions, especially those often addressed with opioid prescriptions. Unfortunately, because the product has to be paid for entirely out of pocket, it is rarely a feasible long-term option for low-income patients,” Singleton said regarding his efforts.

One proposed cannabis law would allow patients to grow cannabis at home, but only for medical purposes. Patients, or their caregivers, would need to register. They would do so with the Cannabis Regulatory Commission as a home cultivator and indicate who it would be. Only one person per household can serve in this capacity. A home cultivator could grow and possess four mature cannabis plants and four immature plants.

However, the bill does impose a $1,000 fine. That is on top of the current harsh penalties for illegally cultivating registered medical plants.

Regarding homegrow, Troy Singleton noted the biggest challenge is having to forgo a certain amount of revenue. However, it is an indeterminate amount.

“That being said, if there’s truly an interest in embracing cannabis, we shouldn’t be in a position to walk away from the customary practice,” he said.

Medical Dispensary Purchase Subsidies Cannabis Law

Singleton’s next cannabis law proposal, S. 3422 would require the Cannabis Regulatory Commission to establish a program to subsidize up to 20 percent of the cost of medical cannabis and other products for registered patients enrolled in Medicaid or the NJ FamilyCare program. The Dept. of Human Services would coordinate with medical cannabis dispensaries to verify if a patient is enrolled in either. The medical dispensaries would have to notify patients or their caregivers of this subsidy.

The bill has no text either.

280-E Business Tax Expenses

Singleton is sponsoring the cannabis law S. 3240, “Decouples State tax provisions from federal prohibition on cannabis business deductions, but only for businesses with less than $15 million of gross receipts.” He is early in the process of a bill’s passage, have recently released it.

Many experts say that the inability of cannabis companies to deduct business expenses from their income tax is a severe problem holding back the industry’s growth. Singleton said it is one of the biggest issues facing the cannabis industry that stems from cannabis prohibition. He is working with the NJ Society of Certified Public Accountants (CPA) to develop the bill to have the cannabis industry in the same way others “and we treat it like any other industry.”

The bill decouples the state business income tax from federal taxes.

“For me, it just seems common sense…. we shouldn’t treat that industry like any other industry in the state,” Singleton said.   “Deducting business expenses is a fairly routine part of opening a business to be profitable.”

Section 280-E of the federal IRS Tax Code prohibits an illegal business from deducting expenses.

Cannabis Industry Issues

“On the federal level, that may make sense. But it doesn’t make sense to treat it differently from any other business in the state,” Singleton said.

He said Colorado and Oregon have already completely essentially decoupled them exceptionally well.

“It’s about leveling the playing field by doing that across business,” Singleton said.

He added that large businesses have cash on hand and more liquidity. In contrast, this could be the difference between ever getting off the ground for fledgling businesses.

“We have pressed legislative leadership in the Budget Committee Sarlo to look at the bill and get moved its imp to create a consistent playing field in the state of New Jersey and hope to get moved sooner than later.”

“The (New Jersey Society of Certified Society of Public Accountants) has been very outspoken on the need to educate. Ralph (Thomas, CEO) has been a staunch ally in wanting to get this done. He understands that this needs to get done,” Singleton said.

Singleton is also sponsoring a proposed cannabis law to help find capital funding from different sources.

He said, “If we get moving, it will get favorable attention to be able to advance it.”

Singleton is the only bill sponsor thus far in the Senate, and no Assemblymember has introduced a companion bill yet. He said he typically doesn’t look for sponsors.

Once a deal is made on bigger issues, other bills will likely move forward.

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