What New Jersey cities want from marijuana legalization

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As New Jersey considers legalizing recreational marijuana, some of its cities are fighting for a piece of the revenue pie.

Three New Jersey mayors penned a letter to state lawmakers requesting a home rule in any cannabis legislation that would enable municipalities to receive a larger percent of generated tax revenue. The city leaders are also pushing for a legalization bill to include measures that would strengthen social justice issues related to marijuana such as expunging past convictions and lifting jail sentences.


“It is not enough that we simply legalize adult use of cannabis,” said Newark Mayor Ras Baraka, who was among the mayors to send the letter along with Jersey City Mayor Steve Fulop and Hoboken Mayor Ravi Bhalla. "We must make our municipalities full partners in the revenue that will be gained from cannabis sales."

Baraka said the mayors of Trenton, Maplewood, Bloomfield and Linden have also voiced strong support for the letter, which requests a provision in any marijuana legalization measure that would designate 5% of state tax revenues generated within a municipality to the local government. The mayors said the extra revenue could be used for programs related to marijuana enforcement, regulation, education and aiding the establishment of local cannabis businesses.

“The proposals down in Trenton today propose one percent for the host municipality, which really doesn’t do anything,” Fulop said during a press conference Thursday alongside Baraka and Bhalla. “When you look around the country, you see numbers closer to five percent.”

A 2016 report from New Jersey Policy Perspective and New Jersey United for Marijuana Reform estimated that the state would reap an estimated $300 million annually from legalizing cannabis. New Jersey Gov. Phil Murphy unsuccessfully pushed lawmakers to legalize marijuana early this year in hopes that the revenue could be used for the 2019 fiscal year budget.

Newark is on the verge of a credit upgrade three years after sliding to near junk level. Moody’s Investors Service revised its outlook on Newark's Baa3 rating to positive from negative in January citing economic development projects that have fueled improved reserves and liquidity in New Jersey’s most-populous city.

Jersey City, New Jersey’s second most populous city, is rated A2 by Moody’s. S&P Global Ratings affirmed Hoboken’s AA-plus long-term bond rating in February.

“I also stand here today to ask the state Legislature to give municipalities authority to decide how many cannabis licenses are appropriate for their communities, to gain a fair share of tax revenue generated by the sale and also use those revenues as investments locally,” Bhalla said at Thursday’s press conference held in Newark City Hall.

Marijuana revenue from legalization would help New Jersey confront structural budget challenges that along with a large pension burden have contributed to it having the second-lowest bond ratings among U.S. states. New Jersey’s general obligation bonds are rated A3 by Moody’s, A-minus by S&P and A by Fitch Ratings and Kroll Bond Rating Agency.

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