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New Jersey Moves One Step Closer To Legalizing Recreational Marijuana

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Pricing for most cannabis real estate deals is higher than for conventional real estate.

New Jersey is one step closer to recreational marijuana and its potentially transformative effects on the state economy.

Budget committees in both the state Assembly and state Senate voted to approve a bill legalizing cannabis use for recreational purposes, NJ.com reports. The bill's next stop will be the floors of each house for a general vote, and if it passes those votes, to Gov. Phil Murphy's desk to be signed into law.

The timing and details of the law have yet to be determined, as multiple members of each committee stated their desire for amendments to the bill before it is brought to a full vote, according to NJ.com. The two committees passed the same bill in a joint session that lasted longer than four hours, with the Senate committee voting 7-4 in favor with two abstentions and the Assembly committee voting 7-2 with one abstention.

Murphy has been in office for nearly a year following a campaign in which recreational marijuana was among his platform positions, but his vision of the bill differs from that of one of its co-sponsors, Sen. Stephen Sweeney. The bill would charge 12% in taxes on cannabis, while Murphy has advocated for a 25% tax.

Among the provisions in this version of the bill are a 1-ounce limit on marijuana flower (with other forms of THC-containing substances having their own respective limits), a ban on smoking in public and expungement of past criminal charges for marijuana consumption. It would also bar individuals to grow for personal use. Of all the states where recreational cannabis is currently legal, only Washington prevents residents from growing marijuana.

Beyond its potential tax benefits to fund state programs, marijuana's legalization expansion from medical to recreational could have seismic impact on commercial real estate. Indoor growhouses are already major users of industrial real estate for medical purposes, and recreational dispensaries have been large drivers of neighborhood and rent growth in states like Colorado.

If and when Murphy has the chance to sign a cannabis bill into law, it still could be some time before shops can open and start generating revenue. In the case of Massachusetts, the first recreational dispensaries opened two years after legalization.