LEGISLATIVE FISCAL ESTIMATE
SENATE COMMITTEE SUBSTITUTE FOR
SENATE, No. 4509
STATE OF NEW JERSEY
221st LEGISLATURE
DATED: DECEMBER 22, 2025
SUMMARY
|
Synopsis: |
Creates regulatory scheme, in line with federal law, on sale of certain hemp-derived cannabinoid products; repeals law concerning intoxicating hemp. |
|
Type of Impact: |
Annual State revenue increase. |
|
Agencies Affected: |
Department of the Treasury and the Cannabis Regulatory Commission. |
|
Fiscal Impact |
FY 2026 and Thereafter |
|
|
State Revenue Increase |
Indeterminate |
|
· The Office of Legislative Services (OLS) determines that the bill will result in an indeterminate increase in State revenues from the excise tax imposed on intoxicating hemp beverages; however, the magnitude of the increase cannot be determined due to insufficient market data.
· Actual State revenue collections will depend on consumer demand for intoxicating hemp beverages and the timing of market entry, preventing the OLS from producing a precise revenue estimate.
BILL DESCRIPTION
This bill establishes regulatory requirements and imposes taxation on certain hemp-derived products that contain intoxicating levels of tetrahydrocannabinol (THC). The bill imposes an excise tax of $3.75 per gallon on intoxicating hemp beverages.
Additionally, the bill clarifies definitions related
to hemp, intoxicating hemp products, and total THC concentration; strengthens
enforcement provisions; and establishes civil penalties for violations.
FISCAL ANALYSIS
EXECUTIVE BRANCH
None received.
OFFICE OF LEGISLATIVE SERVICES
The OLS concludes that the bill will result in an indeterminate increase in annual State revenues from the excise tax imposed on intoxicating hemp beverages. The bill establishes a $3.75-per-gallon excise tax on intoxicating hemp beverages. While the beverage excise tax is expected to generate State revenue, the OLS cannot quantify the magnitude of the fiscal impact because New Jersey lacks reliable data regarding consumer demand, pricing, and sales volumes for intoxicating hemp beverages.
Although the OLS cannot determine a precise revenue estimate, illustrative scenarios demonstrate the possible scale of the State revenue impact from the intoxicating hemp beverage excise tax. For example, if New Jersey consumers were to purchase between one million and three million 12-ounce cans of intoxicating hemp beverages annually, the $3.75-per-gallon excise tax would generate approximately $350,000 to $1 million in State revenue per year. These figures are illustrative only and are not predictive of actual market behavior, as actual fiscal outcomes will depend on regulatory implementation by the Cannabis Regulatory Commission, the timing of market entry for intoxicating hemp beverages, consumer purchasing behavior, and the extent to which intoxicating hemp beverages substitute for or complement other regulated cannabis or alcohol products. Given that these variables cannot be reliably estimated at this time, the OLS characterizes the fiscal impact of the bill as indeterminate.
|
Section: |
Revenue, Finance, and Appropriations |
|
Analyst: |
Associate Fiscal Analyst |
|
Approved: |
Thomas Koenig Legislative Budget and Finance Officer |
This legislative fiscal estimate has been produced by the Office of Legislative Services due to the failure of the Executive Branch to respond to our request for a fiscal note.
This fiscal estimate has been prepared pursuant to P.L.1980, c.67 (C.52:13B-6 et seq.).