“We only recommend to both the state Legislature and to the governor how these funds should be used.”
By Sophie Nieto-Muñoz, New Jersey Monitor
More than $6 million collected from a cannabis tax has been sitting unused even though the state’s cannabis agency has sent spending recommendations to the Legislature for three years.
The millions in revenue—collected from what’s called the social equity excise fee—have been accumulating since recreational cannabis sales began in 2022. The tax is paid by cannabis cultivators, and the revenue is intended to be used for projects in towns impacted by the war on drugs.
The Cannabis Regulatory Commission set the fee at $2.50 per ounce for 2025, more than double last year’s amount. Activists had urged the panel to raise the fee to the maximum of $30 in hopes of more money going to social equity projects.
As of August 2024, the balance in the fund was more than $6 million, according to the commission.
The commission can’t appropriate the money. The state’s recreational cannabis law requires the funds to be allocated by the Legislature while crafting the annual state budget.
But the commission has submitted three reports to state lawmakers, Dianna Houenou, the commission’s chairwoman, noted, urging the Legislature to use the money for economic development in communities hurt by marijuana prohibition, access to legal counsel for entrepreneurs and people leaving prison, and more grants for cannabis businesses.
The commission also holds hearings every year during which the public suggests where these funds should go.
It’s unclear if lawmakers are listening. The budget process for fiscal year 2026 begins after Gov. Phil Murphy (D) delivers his budget address next week.
Assembly Speaker Craig Coughlin (D-Middlesex) and Senate President Nicholas Scutari (D-Union) declined to comment. A spokesperson for Murphy did not respond to requests for comment.
During Tuesday’s Cannabis Regulatory Commission meeting, members of the public expressed disappointment that the funds hadn’t been spent yet. Houenou said there’s a “great misconception” that the committee oversees what the fee brings in.
“If you read the report that we publish every year, we only recommend to both the state Legislature and to the governor how these funds should be used,” she said. “Again, we do not have the power to dispense these funds—we can only recommend.”
The commission will host virtual hearings this month seeking public comment on how to spend revenue from the social equity tax. People can attend the hearings February 20 at 6 p.m., February 25 at 11 a.m. and February 26 at 1 p.m.
This story was first published by New Jersey Monitor.
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