Phil Murphy’s Budget Plan Includes a Significant Tax Increase on Cannabis

25 February 2025

Governor Phil Murphy has proposed a sharp increase in New Jersey’s cannabis tax, seeking to raise the Social Equity Excise Fee from $2.50 to $15 per ounce. The proposed tax hike is part of Murphy’s broader $58.1 billion FY2026 budget, which includes additional tax increases on alcohol, online gambling, tobacco, and real estate transactions. Murphy argues that the cannabis tax increase will help fund social service programs and investments in communities disproportionately affected by past marijuana prohibition.

The proposal has sparked debate among state lawmakers, with Senate President Nicholas Scutari opposing the increase. Scutari argues that New Jersey’s legal cannabis market is already struggling to compete with the illicit market due to high prices, and further tax hikes could push more consumers toward unregulated sales.