Paterson, New Jersey Cannabis Tax Rate
8.63% totalAdministering agencies: New Jersey Division of Taxation + Paterson Finance Department · Updated for 2026
A legal cannabis purchase in Paterson is taxed at a combined effective rate of about 8.63%, driven by a 2% Paterson cannabis business tax stacked on top of New Jersey's 0% state excise and 6.63% state sales tax. Every major New Jersey city tracked here carries the same combined rate, because New Jersey applies a uniform 2% local cannabis tax across host communities. On a typical $100.00 dispensary purchase that works out to roughly $8.63 in tax, or about $108.63 out the door.
How Much Is Cannabis Tax in Paterson?
Use these worked examples to see what Paterson's 8.63% combined cannabis tax adds to a dispensary purchase. Figures apply the New Jersey state excise, 6.63% state sales tax, and the 2% Paterson cannabis business tax to the pre-tax price.
| Pre-tax price | Total tax | Paterson city tax | You pay |
|---|---|---|---|
| $50.00 | $4.31 | $1.00 | $54.31 |
| $100.00 | $8.63 | $2.00 | $108.63 |
| $200.00 | $17.25 | $4.00 | $217.25 |
Estimates treat all taxes as applied to the retail price; actual receipts vary by product, potency tax (where applicable), and exact local sales rate. Model a specific basket with the Paterson tax calculator.
Paterson Cannabis Tax Breakdown
| Tax | Rate | Notes |
|---|---|---|
| New Jersey Cannabis Excise | 0% | No state excise |
| New Jersey State Sales Tax | 6.63% | Medical cannabis exempt |
| Typical Local Sales Tax | 0% | County / district average |
| Paterson Cannabis Business Tax | 2% | City-specific cannabis ordinance |
| Combined Effective Rate | 8.63% | What you actually pay at retail |
Official source: New Jersey Division of Taxation ↗ · rates compiled 2026-08-11 · city rates set by local ordinance.
How Medical Cannabis Is Taxed in Paterson
Qualifying registered medical patients are exempt from the 6.63% state sales tax. In practice that trims roughly $6.63 off every $100.00 spent versus an adult-use purchase in Paterson, though the 2% Paterson cannabis business tax may still apply depending on the local ordinance.
Why Is Cannabis Taxed This Much in Paterson?
Cannabis in Paterson carries layers of tax that ordinary retail goods never see. New Jersey adds its 0% cannabis excise on top of ordinary sales tax, and Paterson then collects an additional 2% cannabis business tax on licensed retailers — a cost dispensaries pass through to the customer. That stacking is why the register total at a Paterson dispensary can run noticeably higher than the same product in a lower-tax New Jersey city or across the state line.
New Jersey taxes adult-use cannabis at 6.625% state sales + up to 2% local Transfer Tax + the CRC Social Equity Excise Fee (reset annually — ~$2.50/oz in 2026). Medical cannabis is exempt from sales tax.
Paterson vs Other New Jersey Cities
New Jersey keeps local cannabis taxes uniform, so the combined rate in Paterson matches the other major cities below — the main cost difference between them comes down to base dispensary pricing, not tax.
| City | City Cannabis Tax | Combined Effective Rate |
|---|---|---|
| Newark | 2% | 8.63% |
| Jersey City | 2% | 8.63% |
| Paterson (this page) | 2% | 8.63% |
| Elizabeth | 2% | 8.63% |
| Trenton | 2% | 8.63% |
See the full New Jersey cannabis tax guide →
Frequently Asked Questions
What is the cannabis tax rate in Paterson, New Jersey?
How much tax will I pay on a $100 cannabis purchase in Paterson?
How much is the cannabis business tax in Paterson?
Are medical cannabis patients exempt from Paterson's tax?
Where can I buy cannabis in Paterson?
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