New Jersey Governor Phil Murphy has put forward a proposal to significantly increase the social equity excise fee on cannabis, raising it from $2.50 to $15 per ounce. The additional revenue, estimated to reach $70 million, would be used to support social service initiatives and violence prevention programs.

“In just five years, cannabis has transitioned from being a source of harsh criminal penalties to funding programs that can help save lives,” Murphy stated during his budget address on Tuesday.

This proposal follows a recent tax hike by the state’s Cannabis Regulatory Commission, which raised the fee from $1.24 to $2.50 per ounce in December.

The social equity excise fee, which cannabis cultivators are required to pay, is allocated to a dedicated fund aimed at supporting communities impacted by past marijuana laws. A portion of the funds is also used for programs designed to steer young people away from cannabis use.

As of August 2024, over $6 million has been collected through this tax, though none of it has been spent yet, according to the cannabis agency. State law requires that these funds be distributed through legislative and gubernatorial approval.

Murphy’s plan also seeks to extend this tax to certain hemp-based products that contain intoxicating compounds such as delta-8 and delta-10, which produce effects similar to THC.

According to officials in Murphy’s administration, they do not need the Cannabis Regulatory Commission’s approval to implement this tax increase. If passed, the changes are projected to generate $70 million in additional revenue.

However, not everyone is on board with the proposed hike. Senate President Nicholas Scutari (D-Union), a strong advocate for legal cannabis, expressed opposition to increasing the tax at this time. He pointed out that New Jersey already has some of the highest cannabis prices in the country, making legal purchases more expensive than the illicit market.

“I don’t want to see taxes on cannabis increase further, especially since the legal market is already struggling to compete with the black and gray markets,” Scutari said. “Right now, that would be a tough move.”