Marijuana sector awaits a key vote on legalization in New Jersey

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March 25, 2019 12:27pm NYSE:MJ

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From Azi Paybarah: This week the New Jersey Legislature could pass the most progressive recreational marijuana bill in the country. Lawmakers were poised to vote on the issue as early as today.

New York may not legalize marijuana anytime soon.

My colleagues Nick Corasaniti, who covers New Jersey, and Vivian Wang, who covers the New York Legislature, explained.

What makes New Jersey’s marijuana bill so progressive?

Mr. Corasaniti: Mainly, two things: criminal records and access to the market.

First, the bill would make it possible to expunge nonviolent criminal records for marijuana-related offenses (up to five pounds, one of the highest thresholds in the country).

People with past convictions, or who are incarcerated or on parole, would be eligible for a clean slate, and they could request expungement online.

Second, the state would require that at least 10 percent of licenses for marijuana businesses go to small companies. Those licenses would be geared toward low-income or high-crime cities, or ones that have had a lot of marijuana arrests.

Basically, places that have been hit hard by marijuana criminalization would reap some benefits of cannabis legalization.

New Jersey would be the 11th state to legalize marijuana, along with Washington, D.C. Wealthy, white investors have traditionally reaped the profits of the emerging industry.

Where would people be free to consume marijuana?

New Jersey’s bill would allow for “public consumption areas.”

People wouldn’t be able to consume marijuana outdoors in public spaces. There would be designated areas for use, mainly at marijuana dispensaries: buy the drug in one room, and use it in another.

The bill would also allow casinos and hotels to have consumption areas.

Also, the bill would allow marijuana delivery.

Where does New York stand on all this?

Ms. Wang: Legalization felt like an inevitability when Governor Cuomo announced his support for it in December. But that was just three months ago; that’s not a lot of time to figure all this out.

Some counties, like on Long Island, said that if the state legalizes marijuana, they may opt out. It’s politically tricky.

Then there’s the lobbying. Social justice groups don’t want well-funded medical marijuana groups rewarded. Medical marijuana companies have been lobbying lawmakers to make sure they’re not frozen out of the New York market.

And after the collapse of the Amazon deal for a campus in Queens, the relationship between Mr. Cuomo and his fellow Democrats who control the Legislature has gotten complicated. That makes negotiating this deal harder.

Mr. Corasaniti: New Jersey’s governor, Philip Murphy, has been working on this for over a year. Before that, a Democratic state senator was pushing a bill in March 2017.

Why did New York get a later start on this?

Ms. Wang: Mr. Cuomo called marijuana a “gateway drug” in February 2017. By the end of 2018, he said it should be legalized.

In between, he was running for re-election and facing a primary challenge from the actress Cynthia Nixon. She supported legalization (and auctioned off a bong as a fund-raiser).

The ETFMG Alternative Harvest ETF (MJ) was trading at $37.35 per share on Monday afternoon, up $0.52 (+1.41%). Year-to-date, MJ has gained 14.84%, versus a 4.99% rise in the benchmark S&P 500 index during the same period.

MJ currently has an ETF Daily News SMART Grade of C (Neutral), and is ranked #59 of 75 ETFs in the Global Equities ETFs category.

This article is brought to you courtesy of New York Times.

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