New Jersey will phase out the state sales tax on medical cannabis by 2022 and allow towns that host dispensaries to impose up to a 2% local transfer tax as part of a bill Gov. Phil Murphy signed Tuesday.
Murphy, a Democrat, signed A.B. 10, which includes a gradual exemption for medical cannabis from the state's regular sales tax rate of 6.625%. The sales tax rate would decrease to 4% on July 1, 2020, drop to 2% on July 1, 2021, and be eliminated on July 1, 2022.
“Today’s legislation creates a medical marijuana program that is modernized, compassionate, progressive and meets the needs of patients,” Murphy said. “I am proud to stand with my legislative partners as we break down barriers to ensure this life-changing medical treatment is affordable and accessible for those who need it most.”
The law includes several policies dealing with cannabis and comes after New Jersey lawmakers decided to give up on legislative efforts to legalize and tax recreational cannabis in May. Instead, legislative leaders pivoted to broadening existing medical cannabis programs, concentrating on social justice issues and trying to put the recreational cannabis question to the ballot in 2020.