Murphy’s Record $58.1 Billion Budget Includes 500% Cannabis Tax Hike

TRENTON, NJ – Governor Phil Murphy’s proposed $58.1 billion budget for fiscal year 2026 includes a significant increase in the tax on cannabis cultivation, proposing a 500% hike to $240 per pound of cultivated marijuana. This increase follows a prior 100% rise in December, which raised the tax from $1.24 to $2.50 per ounce, equating to $40 per pound. The tax hike is aimed at generating $70 million in additional revenue, which would go into a dedicated fund for social equity programs and community investments.

TRENTON, NJ – Governor Phil Murphy’s proposed $58.1 billion budget for fiscal year 2026 includes a significant increase in the tax on cannabis cultivation, proposing a 500% hike to $240 per pound of cultivated marijuana. This increase follows a prior 100% rise in December, which raised the tax from $1.24 to $2.50 per ounce, equating to $40 per pound. The tax hike is aimed at generating $70 million in additional revenue, which would go into a dedicated fund for social equity programs and community investments. The fund, which currently holds nearly $7 million, has not yet allocated any of its funds for specific programs, despite being in place for three years. Murphy’s proposal also seeks to extend the tax to the cultivation of intoxicating hemp products, such as those containing delta-8 and delta-10, chemicals that mimic the effects of THC. Despite the increase in revenue, concerns have arisen about the lack of a clear plan for how the funds will be used. Critics argue that the proposed tax increase may exacerbate New Jersey’s already higher legal cannabis prices, which are 30% to 40% higher than prices on the illegal market. Senate President Nicholas Scutari has expressed strong opposition to the tax increase, fearing it could push consumers back to illegal sources. The proposed budget is expected to face challenges in the Legislature, with Republicans arguing that it creates structural deficits that the next governor will need to address. The budget must be passed by July 1 and is being debated as all 80 seats in the New Jersey Assembly are up for election in November.