On Monday, New Jersey officially became the latest U.S. state to legalize recreational marijuana. This took effect when Governor Phil Murphy signed three bills that together sanction and establish a market for adult-use cannabis in the state.

The signing comes more than three months after Election Day, when state voters overwhelmingly approved a ballot measure legalizing the sale and use of recreational weed.

As in other states, New Jersey officials are framing the legal change as criminal justice reform.

Illegal and Legal spelled out in dice next to marijuana leaf symbols.

Image source: Getty Images.

"As of this moment, New Jersey's broken and indefensible marijuana laws, which permanently stained the records of many residents and short-circuited their futures, and which disproportionately hurt communities of color and failed the meaning of justice at every level, social or otherwise -- are no more," Murphy said on Monday.

While that's certainly an important element of legalization, state budgets are also major considerations. The coronavirus pandemic has badly affected finances at the state and local levels, so many leaders are looking for ways to bring in more tax revenue. Due to high support for marijuana reform measures, legalization is a convenient lever to pull.

The New Jersey retail marijuana scene will ramp up considerably in the wake of Murphy's signing. At present, only 13 dispensaries (which, until now, sold only medical product) operate in the state.

Green Thumb Industries (OTC:GTBIF) operates one of its Rise dispensaries in the city of Paterson and promises that another in Paramus is coming soon. Curaleaf (OTC:CURLF) holds three licenses and at present operates a store in Bellmawr. Investors in the weed space should keep an eye on Green Thumb and Curaleaf's New Jersey moves in the coming weeks and months.

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