Is New Jersey Using Its Cannabis Tax Revenue As Promised?

New Jersey promised that most tax revenue would be invested in communities disproportionately harmed by decades of marijuana arrests and incarceration. State records show that much of the state revenue is being directed towards programs that align with that promise, but municipal spending, which, unlike state spending, has no allocation requirements, has not been tracked as closely. 

When cannabis was legalized, former Governor Phil Murphy signed the Cannabis Regulatory Enforcement Assistance and Marketplace (CREAMM) Act into law, which created the CREAMM Fund. The CREAMM Fund collects revenue generated through New Jersey’s Social Equity Excise Fee and other cannabis-related taxes before lawmakers appropriate the money through the annual budget. The law also requires 70% of cannabis sales tax to be appropriated for “Impact Zones,” or communities disproportionately impacted by previous marijuana criminality. 

Historically, across the country, black individuals are over three times as likely to be arrested for marijuana possession, despite comparable usage rates to white individuals. Aside from legalizing the drug, cannabis legislation in New Jersey also centered racial and social justice, something that can be observed in many other states that have taken the path towards legalization. 

Without public reporting, however, many advocates say residents cannot trust whether local governments are fulfilling that promise.

Municipalities

Unlike the state fund, municipalities can generally deposit their 2% Local Cannabis Transfer Tax revenue into their general operating budgets rather than dedicating it to specific programs— a decision advocates question. 

Municipality	Collected Local Cannabis Transfer Tax 2025	Spent on
Bellmawr	$973,205.55	General Budget
Bloomfield	$787,431	General Budget
Jersey City	TBD	TBD
Mount Laurel	$711,356.73	General Budgert
Rochelle Park	$490,892.00
Runnemade	$285,884.89	General Budget
Mount Ephraim	$116,561.09	General Budget
Atlantic City	TBD	TBD
Newark	TBD	TBD

Michael Hayes, an associate professor of public policy and administration at Rutgers University-Camden, who has researched whether  local governments use this new tax to offset property taxes in New Jersey— the state with the highest property taxes in the country—says they do not. 

“You might expect that local politicians and council members and mayors would say, ‘hey let’s lower property taxes or at least not have property taxes not grow at the same level,’” said Hayes. “But in my research, I have not found any evidence that they have reduced property taxes with this revenue.” 

Jessica Gonzalez, a cannabis attorney and strong advocate for marijuana legalization, called municipalities the “kings and queen makers of the cannabis industry,” referring to their powers to approve new cannabis businesses— a process the state tried to use to help minority-owned businesses. 

Despite these attempts by the state to help and prioritize minority communities through tax and priority applications for diversely owned cannabis businesses, Gonzalez says many municipalities hinder the process of even approving new businesses, and act corruptly. 

“A lot of that work unraveled on the municipal level,” said Gonzalez. “And as much as we have in writing that they’re [municipalities] not allowed to ask for anything in return for their approval, a lot of them still do.”

As of now, no legislation is in the works requiring municipalities to allocate cannabis tax revenue to specific areas, or to rein in municipal power when it comes to business approval.  

“Without a centralized location that this money goes to, we have absolutely no idea how these municipalities are going to use it,” said Gonzalez, “I really just want to narrow down that the problem we have is the transparency of it.” 

Where State Cannabis Tax Revenue is Allocated 

Last year, questions as to where state cannabis money was being allocated arose after New Jersey Monitor reported that over $6 million was sitting without allocation despite recommendations from the Cannabis Regulatory Commission (CRC). While reports of how cannabis tax revenue is appropriated can be found in scattered budget documents online, there is not a consolidated, readily available way to view these appropriations. NJ Urban News requested a breakdown of how fiscal year 2026 and fiscal year 2027 funds were being appropriated from the CRC. 

“Through State budget appropriations in FY26 and FY27, CREAMM Fund revenues have supported a variety of initiatives intended to benefit communities disproportionately impacted by past cannabis prohibition,” said Christopher Riggs, the acting executive director of the CRC.

In FY26, and FY27, money from the CREAMM Fund was appropriated to programs which focus on violence prevention, mental health for teens, youth services in cities, transitional programs for incarcerated individuals and community aid. 

Program	FY26	FY27 (FY27 is on going and this number can change)
NJ4S	$34,600,000	N/A
Partnership for a Drug Free New Jersey	$1,000,000	$1,000,000
Governor’s Council on Substance Use Disorder	$5,400,000	$5,400,000
Purchase of Community Services	$11,924,000	$11,924,000
Violence Intervention Programs	$25,500,000	$25,500,000
Cannabis Equity Grant Programs	$5,000,000	N/A
New Jersey-Based Children’s Defense Fund Freedom Schools	$2,000,000	$2,000,000
Anti-violence Out-of-School Youth Summer Program	$8,000,000	$8,000,000
NJLEAD	$7,000,000	$7,000,000
Transitional Aid to Localities	$35,000,000	$28,448,000
University Hospital- Capital Improvements	$20,000,000	N/A
Scholarship and Transformative Education in Prison Program (Rutgers-Newark)	$1,800,000	$1,800,000
Restorative and Transformative Justice for youth and Communities Program Pilot Program	$1,100,000	$1,100,000
Total Spending:	$158,324,000	$92,172,000

Four years after legalization, New Jersey residents can generally trace how the state spends cannabis tax revenue—if they know where to look. But when it comes to local governments, the promise that cannabis taxes would repair communities harmed by prohibition remains far more difficult to verify.