Winning a constitutional right for adults to smoke pot in New Jersey was, apparently, the easy part.
But creating a legislative pathway to reach proponents’ goals — establishing New Jersey as the dominant East Coast marijuana market, right next to New York, while ending the disproportionate rates of arrest in minority communities — is proving to be far more complicated.
Many of the pitfalls were anticipated.
A battle over psychedelic mushrooms was not.
On Monday, the Senate voted to amend a decriminalization bill to include psilocybin, the hallucinogenic compound in so-called magic mushrooms, or “shrooms,” snarling the time-sensitive negotiations over a separate legalization bill. That bill creates a framework for the constitutional amendment legalizing marijuana, which takes effect Jan. 1.
The mushroom amendment was tacked on just as social justice advocates were spotlighting what they saw as an overarching flaw in the legalization bill: a lack of guaranteed benefit to Black and Latino communities that have suffered most from criminal enforcement of marijuana laws.
“We really do want to see the dollars reach the communities most harmed by the war on drugs,” said Sarah Fajardo, policy director of the American Civil Liberties Union of New Jersey.
The legalization bill was pulled back for an overhaul. On Thursday, after lengthy Assembly and Senate committee hearings, two bills emerged that differed meaningfully, and a final vote on the legislation, originally scheduled for Monday, was postponed.
Once a bill is signed into law, existing medical marijuana dispensaries are expected to be permitted to sell excess cannabis to adults. But supply is limited, and it is likely to take at least 18 months for new shops catering specifically to the adult-use market to open.
For many who had been fighting for years to legalize marijuana, the mushroom amendment was seen as a headline-grabbing smoke screen that muddied what they saw as a crucial effort to wipe away some criminal penalties for possessing the drug — before making it legal to use. The timing also deflected attention from a more substantive debate over how many marijuana licenses to issue, and to whom, as well as how high to set the tax rate, and who would control the purse strings.
It also came in a year of shifting attitudes toward the war on drugs.
On Election Day, Oregon became the first state to decriminalize small amounts of cocaine, heroin and methamphetamine and to make psilocybin mushrooms legal for mental health treatment. In addition to New Jersey, three other states, including South Dakota, where voters supported President Trump by 26 percentage points, approved legalizing the recreational use of marijuana.
New Jersey’s last-minute mushroom amendment was added to a Senate bill designed primarily to end criminal penalties for possession of up to six ounces of marijuana. It calls for downgrading felony possession of an ounce of psilocybin mushrooms to a disorderly persons offense, punishable by up to six months in jail.
By Monday, the Assembly, which had passed its own decriminalization bill in June, had shelved the legislation, unable to reach a consensus on mushrooms.
State Senator Nicholas P. Scutari, a Democrat, said he added the psilocybin amendment to eliminate the three- to five-year prison sentences and the lifelong scar of a felony record that people convicted of possessing even small amounts of the hallucinogens face.
“It’s another failed war on drugs,” said Mr. Scutari, a co-sponsor of the decriminalization bill who, with Senate President Stephen M. Sweeney, is also crafting the bill to legalize marijuana.
Some scientists have studied the potential of psychedelics to treat psychiatric problems. Last year, Johns Hopkins Medicine established the Center for Psychedelic and Consciousness Research to study compounds like LSD and psilocybin to treat mental health problems, including chronic depression.
The amended legislation passed the Democrat-led Senate with only four dissenting votes.
Senator Nia H. Gill, a Democrat from Montclair who voted against the bill, said there was no public or private discussion about the merits of adding mushrooms to a bill centered on reforming the disparate enforcement of the state’s marijuana laws. In New Jersey, Black residents are more than three times as likely as white residents to be charged with marijuana possession, despite similar usage rates, according to a study by the A.C.L.U.
“Why was it introduced at the last minute? And why are we not able to have a full robust discussion?” Ms. Gill said. “It creates a narrative of the public not having faith in the integrity of the process.”
It was at least the second recent hiccup in the state’s effort to lay the ground rules for recreational marijuana sales. The first involved taxes.
The governor and legislative leaders had hoped to absorb the extra tax revenue into the state’s general fund, in part to plug gaps in a budget decimated by the pandemic.
But critics immediately argued that a portion of the tax revenue should be designated for programs that benefit communities most harmed by decades of uneven drug enforcement.
Leo Bridgewater, an African-American Army veteran from Trenton, N.J., who has been pressing for years for marijuana legalization as a means of criminal justice reform, called it “restitution.”
“I need to be made whole,” Mr. Bridgewater said in an interview.
The solution was to impose extra layers of taxes — in addition to what had been stipulated in the ballot question that voters approved.
Patrick Duff, who testified on Thursday at an Assembly hearing that he operated medical marijuana dispensaries, said the added fees would push the cost of marijuana so high that the illicit market would continue to thrive. The extra fees should have been disclosed to voters, he said.
“If that was known, I would never have voted for the law,” Mr. Duff testified.
The proposal calls for adding a cannabis cultivation fee to an already established 6.625 percent sales tax, lifting the effective tax rate for pot to 7 percent. A five-person Cannabis Regulatory Commission, led by Dianna Houenou, would also be permitted to adjust the fee by an additional $10 to $60 an ounce as supply increases and the price of marijuana declines.
Some or all of the extra taxes would be set aside to fund unspecified initiatives within “impact zones” most harmed by marijuana enforcement, like prison transition efforts, start-up grants for minority-owned cannabis companies and after-school programs. An unlimited number of cannabis licenses for micro-businesses run by New Jersey residents were also added as part of the negotiations.
Steven Hawkins, executive director of the Marijuana Policy Project, a national organization focused on legalizing cannabis, said the potential range of taxes would either make New Jersey the state with the lowest marijuana taxes — or the highest. At 15 percent, South Dakota’s tax rate is the lowest of any of the 11 states where recreational sales are already legal, while Washington State is the highest with a 37 percent base tax.
R. Todd Edwards, the political action chairman of the New Jersey conference of the N.A.A.C.P., said the challenge was ensuring that the price of legal marijuana remained low enough to prevent the illicit market from thriving.
“I don’t want to overtax it so much that we make the black market relevant,” Mr. Edwards said.
But the true variable determining pricing is supply, said Brandon McKoy, the chief executive of New Jersey Policy Perspective, a nonprofit think tank.
One of the current drafts of the adult-use marijuana bill stipulates that 37 cultivation licenses may be issued at first; this includes licenses already held by medical marijuana outfits and others that are in the pipeline, but tied up in a lawsuit. Another eliminates the cap on cultivation licenses altogether.
There is already a pronounced shortage of medical marijuana in New Jersey.
Without more cultivation, supply is likely to remain low and pricing will remain high, constraining tax revenue, Mr. McKoy said.
In Michigan, a state with a similar number of residents, there are 330 licensed cultivators, according to an analysis done by the think tank, and in Massachusetts, a less populous state, there are 130. Colorado has 700.
All this points to what some legalization proponents say is an underlying flaw in the process: New Jersey lawmakers have done a poor job replicating programs that worked in states where marijuana was legalized years ago.
“We’re not living in the United States of New Jersey,” Jessica F. Gonzalez, a cannabis lawyer who also advises two national marijuana advocacy organizations, said in an interview. “We need to capitalize on their success and learn from their mistakes. I’m not seeing a lot of learning.”