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Is New Jersey Closer to Legalizing Recreational Cannabis?

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Nov. 20 2020, Updated 4:04 p.m. ET

New Jersey on recreational cannabis

As each day passes, we hear more positive developments about cannabis legalization in the United States. In the latest developments, lawmakers in Garden State, New Jersey, debated about legalizing recreational cannabis. The bill to legalize recreational cannabis will be voted on later this month.

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Will New Jersey be the 11th state?

If New Jersey passes the bill to legalize recreational cannabis, it will become the 11th state along with the District of Columbia to legalize recreational cannabis in the United States. The move comes despite recreational cannabis being illegal under federal law. There are severe penalties if individuals are caught with cannabis in a state that hasn’t legalize recreational cannabis. The District of Columbia was the latest region to legalize recreational cannabis in the United States.

There are strong incentives for lawmakers to legalize recreational cannabis. Some of the incentives include the potential to curb illegal cannabis sales and lower related crime rates. There’s also a strong incentive for collecting tax revenues from legally selling cannabis. In the above chart, you can see the increase in the share of income from cannabis for Washington year-over-year.

Attorney General Jeff Sessions, who was strongly against cannabis legalization, resigned. His resignation could pave the way for a softer stand on the industry (HMMJ). Recently, Canada legalized recreational cannabis. If there’s a softer stand on recreational cannabis, companies like Canopy Growth (WEED), Tilray (TLRY), and Aurora Cannabis (ACB) (ACBFF) are ready to expand their presence in the US market.

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