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Legalizing marijuana could stoke the state coffers

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When U.S. Attorney General Eric Holder announced in August that the Department of Justice would not be challenging recent decisions by voters in Colorado and Washington to legalize marijuana for recreational use, Gov. Chris Christie was asked about its implications for New Jersey.

It was a valid question given that the Garden State is one of just 20 to have some form of a medical marijuana program in place.

"We're not going to have recreational pot in New Jersey, not at least as long as I'm governor," Christie told reporters last August in Point Pleasant. "So no, it doesn't have any implications for that at all, and I think it's a mistake by the attorney general, candidly."

At the time, that was seemingly the end of the conversation. End of story.

But that all changed last month when state Sen. Nicholas Scutari (D-Union) announced that he plans on introducing a legalization bill in the current legislative session and that it would be modeled after the one currently in place in Colorado.

Sure, there's the morality of it all, and for Scutari, that's certainly an angle he's looking to take with the bill.

As a prosecutor in Union County, Scutari said he's seen far too many low-level offenders unnecessarily dragged through the system.

But at least for the business community, the more compelling argument to be made is that legalizing marijuana could be a gold mine for New Jersey.

Projections are still being hashed out but he estimates the state benefit will be in the "millions and millions," he says.

"We're going to make a lot of money on this," Scutari says.

So how many pot brownies will it take to balance the state's budget? It's not quite that easy, but it's still worth a look.

While the law is still being implemented in Washington, marijuana became legal in Colorado as of Jan. 1 and has since set off a firestorm of economic activity in the state that many have dubbed the "green rush."

Joe Hodas, chief marketing officer for Colorado-based marijuana product manufacturer Dixie Elixirs, says that so far, "demand in the market has far exceeded anybody's expectations in terms of sales and revenues."

State tax revenue has been widely projected at around $67 million annually, but Hodas said he wouldn't be shocked if that figure was closer to $100 million by the end of the year.

That's because Colorado's industry is not just about people lining up to buy some joints. Legalization has created the need for new positions to support the booming industry, from cultivators to regulators to distributors and so on.

And let's not forget to mention the development of "weed tourism" as Colorado businesses are finding that people from all over are flocking to the Centennial State to legally purchase and use marijuana. Companies promoting themselves as tourism agencies are already in place and regularly welcoming visitors. It's an economic engine that "can't be overlooked," Hodas says.

"Not only is that person purchasing product here, but they're renting a car and staying in a hotel … We are definitely seeing a lot of tourism," Hodas said.

Hodas says Coloradans know that other states, New Jersey included, are watching to see how the experiment unfolds and monitoring their nascent industry very closely. The goal, he says, is to look for ways to sustain growth and do so responsibly.

"We want this to grow appropriately, and we want it to grow right," Hodas said.

So will marijuana legalization fix all of New Jersey's fiscal woes? Morgan Fox, communications manager at the Washington, D.C.-based Marijuana Policy Project, says that's a stretch, but it could definitely help.

"It's obviously not going to be a panacea for all the state's problems, but it will create jobs," Fox said.

Fox added that New Jersey would certainly stand to gain from the kinds of ancillary businesses that Hodas mentioned are taking off in Colorado.

But then there's that Christie issue again. With the governor so adamant against legalization, should advocates be getting their hopes up anytime soon?

National and state polls widely show that attitudes are continuing to shift in favor of legalization.

Scutari says it's inevitable and he notes that Christie has "three and a half years left maximum" before either filling out his last term as governor or running for president.

And Scutari is strategizing as well.

In Colorado, Gov. John Hickenlooper was an outspoken critic of legalization prior to the amendment's passing. And though he still is not a fan, he has pledged to comply with its regulation.

His team also has agreed to talk with Scutari. A planned meeting last weekend was postponed due to the winter storm that hit the East Coast.

Scutari, however, knows he's got plenty of time to push his plan.

E-mail to: andrewg@njbiz.com
On Twitter: @andrgeorge


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