NJ Medical Marijuana Got Cheaper in July 2020 – New Jersey sales tax on medical marijuana was cut to four percent on July 1, down from six percent. This represents the first stage in a three-year plan designed to phase out state taxes on purchases of medicinal cannabis. Fast forward to July 1, 2021 and you will see that the state sales tax will be cut even more — to two percent. Then, in 2022, it will be completely gone.
Don’t assume that this means medical marijuana will be totally tax-free, though. Each community is allowed to impose a two percent “transfer tax” on purchases; that being said, no municipality has instituted such a tax as of yet.
Jake Honig Compassionate Use Medical Cannabis Act
The sales tax phase-out was a vital part of 2019’s Jake Honig Compassionate Use Medical Cannabis Act. This Act also legalized medical marijuana edibles and raised the monthly allowance to three ounces per patient, requiring them to re-certify once annually.
The law’s name honors seven-year-old Jake Honig from Howell who died in 2018. Medical marijuana provided the only relief the boy could get from an inoperable brain tumor.
Breaking it Down
Activists say the policy of instituting a tax on medical marijuana purchases is “criminal,” as OTC and prescription medicines at traditional pharmacies do not have to impose New Jersey sales tax.
More than 77,000 patients are currently registered with the New Jersey medical marijuana program. However, supply issues due to the high prices (up to $500 for a single ounce of medical marijuana) have dogged the program from the beginning.
An ounce of “Green Fire OG,” for instance, goes for $440 per ounce at Curaleaf NJ, a Bellmawr dispensary. With the sales tax in place prior to July 1, a customer would shell out $29.15 in taxes, for a total amount of $469.15.
Now, that tax paid is reduced to $17.60, for a total of $457.60.
Just nine medical marijuana dispensaries are open around the state at this time. Other pre-approved locations are involved in legal battles and cannot open yet.
What’s Next
Come November, New Jersey residents will vote on a constitutional amendment legalizing marijuana for recreational purposes. It would also allow recreational dispensaries. Some legislators are looking to pass a bill that decriminalizes weed, with a fine of $25 for possession, prior to that date.
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