Cannabis agency delays decision on raising social equity fee
The Cannabis Regulatory Commission on Wednesday punted on whether to hike a fee tacked onto cannabis after already canceling a scheduled vote on the fee earlier this month.
Chart of Social Equity Fee Increase since 2022
The commission was expected to vote during a special meeting Wednesday on whether to raise what’s known as the social equity excise fee from $1.24 an ounce to as much as $30 for 2025.
The fee, mandated by state law, goes toward a fund that dedicates some revenue from recreational cannabis to social equity projects and reinvesting in communities that were harmed by marijuana criminalization. A percentage of the fee also goes to funding programs aimed at diverting young people from cannabis.
But following a two-and-a-half-hour meeting behind closed doors, the five-member panel voted 3-2 to delay the Nov. 1 deadline to approve any changes to the fee. Commissioner Charles Barker said delaying the decision would give the commission “more time to gather information, to speak to more stakeholders and organizations who represent the businesses and the people who will be directly impacted by this decision.”
The fee was expected to be discussed at the commission’s Oct. 17 meeting, but it was pulled from the agenda. The panel did not say when they would reconvene to vote on the fee that goes into effect on Jan. 1, 2025. Their last meeting this year is scheduled for Dec. 12.
The fee brought in an estimated $2.6 million in fiscal year 2024. The funds from the fee are allocated by the Legislature and governor, though no money has been spent so far. In the past three years, the commission has held several public hearings to consider what the money should be spent on.
New Jersey Commissioner Charles Barker
Cannabis cultivators pay the social equity fee based on the quantity of usable cannabis produced. But critics claim a higher fee would lead to businesses passing the cost onto consumers.
Commissioner Sam Delgado proposed raising the fee to $5 per ounce of usable cannabis, and Commissioner Maria Del Cid-Kosso proposed setting the fee to $10 per ounce. Neither proposal advanced to a vote Wednesday.
Barker said he doesn’t want to limit revenue raised from the fee nor raise the fee to the maximum of $30 if the funds are used for their specific purpose.
“We need to be sure that we’re going to be able to generate more tax revenue for great social equity programming that gets to communities and the people most impacted by the federal war on drugs, while at the same time not having a colossal effect on the industry where the social equity businesses that we’ve newly onboarded can’t make it and don’t succeed,” he said.