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Products purchased at medical cannabis dispensaries are no longer subject to the state sales tax.

For nearly a decade, New Jersey has been among the few states that has imposed sales taxes upon medical cannabis products. (Sales taxes do not apply to other physician-authorized medicines.) The imposition of the tax has been among the reasons that patients in the state have been paying higher than average prices for medical cannabis.

Provisions in legislation initially signed in 2019 began phasing out the application of the tax. Those provisions eliminated the tax on July 1.

“Removing state sales tax on medicinal cannabis is consistent with Governor Murphy and the legislature’s intent to prioritize patients and improve affordability,” said Jeff Brown, Executive Director of the New Jersey Cannabis Regulatory Commission, in a prepared statement. “As the sales tax has been phased out, … patients have been able to spend less on their medicine, further ensuring patients are prioritized over recreational consumers.” 

Longtime medical cannabis activist Ken Wolski, Executive Director of the Coalition for Medical Marijuana — New Jersey, hailed the elimination of the tax, opining that “it should have never been imposed in the first place.”

NORML’s Deputy Director Paul Armentano added, “The primary focus of any medical cannabis legalization law must be providing safe and convenient access to patients in order to improve their quality of life; it should not be about increasing revenue streams for state lawmakers.”

Last week, California Gov. Gavin Newsom signed legislation into law reducing the tax burden on adult-use cannabis sales. That action came after a recent economic analysis reported that California imposed an effective tax rate of as much as $92 per ounce — far higher than the tax burden imposed on retail cannabis transactions in other states.

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