Federal legalization in the U.S. is something that is becoming increasingly likely over the coming years. Until then, cannabis enthusiasts and investors are paying special attention to the individual states within the country which are slowly opening up to cannabis legalization.
One of those states is New Jersey, which announced today they are moving forward with a proposal to open up legal cannabis consumption in the region. In response to the news, most cannabis companies jumped as a result of the news.
Several New Jersey lawmakers came together with Democratic Governor Phil Murphy where he announced today that the bill would permit adult-use of weed in the state. This would also let the various cities in the state collect a two percent tax from the proceeds. Although the bill has only been proposed and has yet to pass into law, it seems likely that such an eventuality will become a reality.
“Legalizing adult-use marijuana is a monumental step to reducing disparities in our criminal justice system,” Murphy said in a press release. “After months of hard work and thoughtful negotiations, I’m thrilled to announce an agreement with my partners in the Legislature on the broad outlines of adult-use marijuana legislation.”
The full bill is yet to be released, but it’s expected to come out within the next few days as it needs to be approved by a committee before it goes up for a floor vote. The next scheduled voting session will be on March 25th. While some wonder whether the bill has enough support to pass, it now has the support of Senate President Stephen Sweeney, who has previously said he wouldn’t support a marijuana bill unless he was certain it would pass.
“This plan will allow for the adult use of cannabis in a responsible way,” added Sweeney in a statement. “It will create a strictly regulated system that permits adults to purchase limited amounts of marijuana for personal use. It will bring marijuana out of the underground market so that it can be controlled, regulated and taxed, just as alcohol has been since the end of Prohibition.”
The bill would also include an “expedited expungement process” for people convicted of low-level cannabis-related offenses. This would these people, many of whom have records of consuming or dealing small quantities of the plant, re-enter society without being denied access to education, jobs, and investment opportunities.
In response to the news, most cannabis companies rallied as the news broke. Cronos Group (NASDAQ: CRON), Tilray Inc (NASDAQ: TLRY), Canopy Growth (TSX: WEED)(NYSE: CGC), and Aurora Cannabis (TSE: ACB)(NYSE: ACB) all increased between 2.6 percent up to 4.5 percent. Nine of the top 10 companies in the ETFMG Alternative Harvest ETF – a fund that acts as a benchmark for major cannabis equities – also surged in Tuesday’s trading session.
There are a variety of other states that cannabis investors are hoping to see legalization within the short-term future. Illinois is expected to be one of these, with the state’s Governor promising to make marijuana legalization part of his campaign where taxes from legal weed used to pay for various construction plans. Other states such as Pennsylvania, Minnesota, Arizona, and Connecticut are all possible candidates for legalization in 2019.