Cannabis Sales Tax in New Jersey: Rates, Revenue & Dispensary Obligations

Introduction

With New Jersey now fully legalizing adult-use cannabis, the cannabis sales tax New Jersey framework should be taken into consideration. Without any doubts, dispensaries and other cannabis businesses carry the primary responsibility for NJ marijuana tax compliance. Yet, consumers and tax advisors as well as investors should also recognize how the NJ cannabis tax rate applies in practice.

This guide presents how New Jersey marijuana dispensary tax rules function, who pays, and how dispensaries satisfy dispensary tax requirements NJ, covering the cannabis excise tax NJ and the cannabis social equity fee NJ. We also indicate New Jersey cannabis tax reporting obligations and the role of a cannabis business CPA NJ in staying fully compliant, and how cannabis tax filing service providers can support precise remittances.

Finally, the article also distinguishes between tax-exempt medical cannabis and taxed recreational programs and further highlights possible updates that might have influence on the industry.

Current Cannabis Sales Tax Rate

In New Jersey, recreational (adult-use) cannabis is subject to the state’s 6.625% sales tax at retail. At the cultivation level, New Jersey imposes a cannabis excise tax NJ known as the Social Equity Excise Fee (SEEF) on recreational cannabis. This fee is currently $2.50 per ounce of usable cannabis as of 2025. Licensed cultivators should handle New Jersey cannabis tax reporting by paying this fee monthly.

Medical cannabis is exempt from both sales tax and the SEEF. This approach presents tax-free access to medical marijuana products.

Proposed or Upcoming Changes

In 2025, Governor Phil Murphy proposed increasing New Jersey’s cannabis excise tax NJ (SEEF) on recreational cannabis from $2.50 per ounce to $15 per ounce as part of the FY 2026 budget. This increase is intended to generate extra income in terms of public health and social equity in addition to community reinvestment programs.

At this time, there is no proposal to introduce a THC potency-based tax in New Jersey. Municipalities may simply prefer to have the authority to impose a local transfer tax of up to 2%. It should be noted that this rule has been in place since adult-use legalization began.

Operators should regularly monitor NJ marijuana tax compliance via NJ Assembly bills and Cannabis Regulatory Commission updates, as changes could directly affect their dispensaries and related businesses.

Tax Revenue from Cannabis Sales

In 2024, New Jersey collected $64,503,651 in state cannabis tax revenue — specifically $61,019,060 from retail sales tax and $3,484,591 from the Social Equity Excise Fee (SEEF) — excluding local municipal transfer taxes, which are reported separately.

While exact tax revenue figures are not always published separately, both state sales tax collections and the cannabis excise tax NJ (SEEF) have become important contributors to social funding operations. Municipalities may also collect up to a 2% local transfer tax on cannabis businesses and further boost the local government revenue.

Future cannabis tax revenue will depend on factors such as market expansion, the number of licensed dispensaries, and potential changes to NJ cannabis tax rates. Governor Murphy’s 2025 proposal to increase the SEEF to $15 per ounce, if approved, would significantly increase state revenue in coming years.

How Dispensaries Pay Cannabis Taxes

Recreational cannabis dispensaries in New Jersey are responsible for collecting the 6.625% state sales tax on retail transactions, following dispensary tax requirements NJ. Medical cannabis, however, is fully exempt from sales tax.

At the wholesale level, cultivators pay a cannabis excise tax NJ (SEEF) of $2.50 per ounce, which may be built into wholesale pricing. While dispensaries do not file SEEF returns directly, they should make sure that such a fee is correctly reflected in their product costs and documented.

Retailers should also register with the New Jersey Division of Taxation and file Form ST-50, as applicable quarterly for New Jersey cannabis tax reporting. Additionally, dispensaries are required to maintain detailed invoice copies and chain-of-custody documentation to demonstrate full compliance in the case of an audit.

Use of Cannabis Tax Revenue

In New Jersey, the cannabis excise tax NJ (SEEF) collected from cultivators is specifically earmarked for programs that promote equity and further supports communities disproportionately affected by past cannabis laws. Such funding presents aid in creating job opportunities, provides grants and strengthens community development initiatives.

Revenue from the state sales tax on recreational cannabis is treated like other sales tax revenue naturally and flows into the general state budget. This revenue is not earmarked for specific programs.

Municipalities at the local level, can impose a cannabis transfer tax of up to 2% on specific cannabis business activities. These funds stay within the municipality and are generally used for public infrastructure and local law enforcement as well as community services, aligning with NJ marijuana tax compliance guidelines

How Dispensaries Stay Compliant

• Use POS systems to track taxable vs. tax-exempt sales and fulfill dispensary tax requirements NJ
• Keep invoices from cultivators that demonstrate the cannabis excise tax NJ (SEEF) covered in wholesale pricing.
• File Form ST-50 on a quarterly basis to pay sales tax through the NJ Division of Taxation portal.
• Plan finances to cover sales tax and wholesale costs that include the SEEF.
• Watch for updates on SEEF rates and municipal transfer tax rules in order to maintain NJ marijuana tax compliance.

Conclusion & Call to Action

New Jersey’s cannabis tax system is indeed complicated and continually changing. Dispensaries should be fully aware of the sales tax rules and SEEF rates along with the filing requirements in order to prevent penalty payments.

In the case of owning or planning to launch a cannabis business in NJ, professional guidance can make a major difference. Dimov Tax presents custom-made strategies for NJ marijuana tax compliance, including support from an experienced cannabis business CPA NJ. Reach out to us today to protect your establishment and fully align with the regulatory changes through professional cannabis tax filing service options.

FAQs