Where New Jersey Cannabis Tax Revenue Is Going

Where New Jersey Cannabis Tax Money Goes

Legal cannabis sales generate a lot of tax revenue in New Jersey. That money is supposed to help rebuild communities hit hardest by past cannabis laws. Here's how the system works and where the dollars are headed according to current rules and recent updates from state officials.

Sales have topped $1 billion since recreational cannabis went live in April 2022. That includes both medicinal and adult-use products; total tax revenue is in the tens of millions already.

The Social Equity Excise Fee Fund

A tax called the social equity excise fee is paid by cultivators. In 2025 it reached $2.50 per ounce, previously much less. That money goes into a fund meant to support communities disproportionately impacted by cannabis prohibition. It is meant to finance workforce training, legal aid, small business support, education, and violence prevention.

By August 2024, lawmakers had collected over $6 million in this fund but had not yet distributed it . The Cannabis Regulatory Commission has submitted yearly spending recommendations to the state Legislature, but actual allocation requires legislative action.

Governor Murphy’s proposed 2026 budget suggests raising the fee up to $15 per ounce, possibly generating around $70 million for social equity and youth diversion programs.

State and Municipal Tax Splits

Cannabis in New Jersey is also taxed under the state sales tax rate of 6.625%. Medical cannabis sales are now exempt from that tax since mid‑2022.

State law requires that 100 percent of the excise fee and nearly 60 percent of cannabis sales tax be directed to community reinvestment efforts. That includes education, public health, violence prevention, and economic development initiatives.

Local governments can opt in to allow cannabis businesses in their towns and impose a local transfer or user tax up to 2 percent . Those funds can support municipal services like youth programs, road repair, or park maintenance.

Where The Money is Supposed to Go

Recommendations from the state point toward funding:

• Entrepreneur support and social equity business grants in impacted communities
• Legal aid and reentry services for people with past cannabis convictions
• Youth diversion and violence prevention programs
• Training and apprenticeships for cannabis industry jobs in equity zones

A public hearing process is used to gather feedback on how the funds should be spent .

Why it Matters to Glassboro Customers

Glassboro benefits from these rules in a few ways. Funds earmarked for inequity and social programs may eventually impact South Jersey communities. Local businesses, including The Jersey Joint, operate under these laws and contribute to that pool of money. If your town opts in, some of the local tax revenue could return to community services where you live.

While The System Works on Paper…

The money has not yet been spent in full. The Cannabis Regulatory Commission doesn’t have the power to spend the money, only to recommend it. That means real change depends on legislative follow-through.

Still, growth projections are notable: cannabis could bring in hundreds of millions in tax dollars annually if cultivation tax hikes are enacted.

Final Thought

New Jersey’s cannabis tax policy aims to drive social equity, community reinvestment, and economic opportunity. Some of the funds are still waiting to be deployed. For now they sit in a growing pot, with formal recommendations made but implementation pending the state budget process. The promise is real. We'll just need to watch and see how these funds get used over time.