NJ Update: A Light at the End of the Tunnel

Good afternoon friends,

In early December, we published our first article highlighting the growth of New Jersey’s Medicinal Cannabis Program and what may come next within the state and around the nation. When we penned that article, many citizens across the state were optimistic on cannabis as we looked ahead into 2021.

Looking back over the past two years, it has been quite challenging to figure out when and how an expanded New Jersey cannabis market was going to fall into place. As far back as July of 2019, Governor Murphy signed the Jake Honig Compassionate Use Medical Cannabis Act, which set the stage for additional progressive legislation and the potential for significantly more licensing to follow. There have been quite a few hiccups along the road, one involving the selection and clearance for additional licensed business under the 2019 Department of Health RFA. Prospective licensees have been stuck in a holding pattern for more than a year, putting a tremendous strain on groups that have been fully ready to execute on their business plans–leaving an entire industry hanging in limbo. Now, it finally feels like we are gaining momentum with the passage of two bills in December and the advancement of nominations for New Jersey’s Cannabis Regulatory Commission.

A week after our first article was published, the New Jersey state legislature passed the New Jersey Cannabis Regulatory, Enforcement Assistance, and Marketplace Modernization bill, NJ S21 / NJ A21 and a decriminalization bill NJ S2535 / NJ A1897. Once the legislature decides on the final language of these bills, the responsibility for next steps fall into the hands of Governor Phil Murphy. Again, it feels like New Jersey is at the apex of delivering a robust and socially equitable marketplace for personal use cannabis.

Still, one last tipping point remains in the state – how to manage and regulate the underage possession of cannabis products. The Governor’s stance on cannabis possession penalties aligns closely with regulations on alcohol, where participants must be over the age of 21 to purchase and handle the product. Unlike alcohol there are additional provisions where underage patients can be medically cleared by a physician. Governor Murphy has insisted that before he will sign the bills, they need to be better aligned, by incorporating adequate language to handle underage possession and other violations. The amendments are headed to include civil penalties and may also include drug abuse education and/or treatment programs.

This back and forth between the New jersey legislature and the Governor’s Office has dragged the approvals of these bills’ hard deadline of February 8th into overtime. Luckily, the State Assembly approved an emergency ten-day extension for closure of these items. Introduced on January 7th is a new bill, NJ S3320. The noted purpose of this bill is to update and clarify recent legislation passed by both Houses of the Legislature addressing cannabis legalization, and marijuana and hashish decriminalization.

In a broader perspective, the main impact of having Bill S21 passed is that it will organize and expand the powers of New Jersey’s future Cannabis Regulatory Commission to approach sensible medicinal and adult-use cannabis regulation. The CRC was enacted as a commission in Jake Honig’s Law, but the drive and nuances of developing an adult-use cannabis program had placed its formation on the backburner. We would expect that after S21 passes, the CRC will be formed with three appointees coming from Governor Phil Murphy and two additional members appointed by Senator Sweeney and Assemblyman Coughlin. This commission holds the responsibilities of regulating the application, licensing, and oversight of all the industry participants: vertical ATCs, cultivators, manufacturers, wholesalers, distributors, dispensaries, and third-party lab testing. Our next article will cover who has been nominated at this time and what we think the first steps of the commission will entail. The strength and quality of this team is already taking shape. Governor Murphy has established exceptional leadership with the selection of Jeff Brown, who will oversee the commission, as the first Executive Director.

Hang in there New Jersians! Although it is taking longer than we expected, getting these bills signed will be worth the wait.

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