Perhaps the most significant change in Sen. Scutari and Sen. Sweeney’s new adult use cannabis legalization bill is the change in residency requirements for cannabis license holders. In earlier iterations of Sen. Scutari’s legalization bill, cannabis license holders had to be New Jersey residents for two years prior to the date of the license application. The thought process behind this requirement was to prevent established cannabis businesses from jurisdictions that have already legalized cannabis from entering the New Jersey marketplace and establishing dominance before New Jersey citizens had an opportunity to gain a foothold themselves.
The new bill has changed that. It creates a defined term known as a “significantly involved person” which essentially means a person or company with a 20% or greater stake in the company applying for a license. § 9(a)(3) of the new bill states that “[a]n applicant shall have a significantly involved person or persons lawfully residing the State for at least two years as of the date of application to receive a license.” Continue reading
Attorney General Gurbir S. Grewal
New Jersey Attorney General, Gurbir S. Grewal, issued a memorandum to New Jersey prosecutors which ordered them to seek adjournments of “any matter involving a marijuana-related offense pending in municipal court.” The term “adjournment” in legal parlance simply means postponing a court hearing until a future date. The adjournments being sought are until September 4, 2018.
Attorney General Grewal’s adjournment date seemingly coincides with the general time frame of when Sen. Scutari anticipates that the New Jersey legislature will again consider the issue of legalized adult use cannabis. Attorney General Grewal has not commented on whether there is an actual connection between the temporary halt in the prosecution of cannabis offenses pending in municipal court and any efforts to legalize cannabis, instead stating that his office is developing “appropriate guidance” for prosecutors.
Cannabis law continues to develop in New Jersey. On June 28, 2018, a New Jersey workers’ compensation judge ordered Freehold Township to pay for an injured worker’s medical cannabis. This is the second time a New Jersey Workers Compensation judge has come to this conclusion, which is a significant step in the development of New Jersey cannabis law.
The attorney arguing for the insurance company who provided workers compensation insurance for Freehold Township argued that the workers compensation court could not order the insurance company to pay for the medical cannabis because cannabis is illegal under federal law. This argument is called a preemption argument, which means that the Supremacy Clause in the United States Constitution – which makes federal law “supreme” over state law – should not allow the workers compensation judge to rule in the injured worker’s favor. The insurance company cited to a June 14, 2018 ruling from the Maine Supreme Court which disallowed medical cannabis in the workers compensation context because of federal law.
New Jersey Democrats are now hopeful that a legal cannabis bill could be approved before Labor Day. Even though the recent state budget passed without including tax revenue from adult use recreational cannabis, Senate President Steve Sweeney said that lawmakers are “rounding the corner on marijuana” and said that “the speaker and I are committed to getting the marijuana bills done this summer. That’s our goal.”
Sen. Sweeney’s comments suggested that preparing the budget actually made the cannabis discussion more difficult. “I’m thinking late July, August, hopefully,” Sweeney said. “Now that this budget’s out of the way, not that a lot of this stuff’s out of the way, all the noise is out of the way, hopefully the administration and we all can focus on marijuana.”
Senator Nicholas P. Scutari (D) and Senator Stephen M. Sweeney (D)
This installment of New Jersey Cannabis Counsel dives into the new Scutari/Sweeney legalization bill (the “Bill” or the “New Bill”) and focuses on what was changed, and what was not changed, from the predecessor bill (the “Old Bill”) when it comes to cannabis business licenses.
Our inaugural blog post addressed the first step for any legal cannabis business in New Jersey under the Old Bill: licensure. The New Bill still requires licenses, but has slightly changed the overall licensing structure. Currently, the New Bill proposes four cannabis licenses:
Class 1: Marijuana Grower License
Class 2: Marijuana Processor License
Class 3: Marijuana Wholesaler License
Class 4: Marijuana Retailer License
Followers of this blog and New Jersey’s efforts to legalize cannabis will be familiar with these licenses. While the Old Bill had growing and processing under one license, all of the above types of cannabis businesses were included in the Old Bill. More interesting is what was not included in the New Bill.
On June 7, 2018, Sen. Scutari and Sen. Sweeney jointly introduced a new cannabis legalization bill (“the Bill”). Unlike its predecessors, this bill is empowered by the sponsorship of Sen. Sweeney, the New Jersey Senate President, who has been advocating for cannabis legalization for over a year but previously did not take a step this significant toward making cannabis legalization a reality.
This blog will analyze various aspects of this new bill in a multi-part series that will begin with a completely new concept proposed in the Bill: Impact Zones. Continue reading
In an article published by NJ Cannabis Insider, Alex Banzhaf explores the limitations of filing for bankruptcy as a cannabis business due to federal law, and a viable alternative that businesses may consider when faced with insolvency.
Click here to read the article. (Subscription required.)
Governor Murphy promised legalized adult use cannabis as one of his first 100 days initiatives. That time has come and passed. So what exactly is the status of legal cannabis in New Jersey?
In early March, Gov. Murphy told New Jersey legislators that he wanted to legalize and tax cannabis before the end of 2019. Money talks, and Gov. Murphy included $60 million in revenue from taxing the legal cannabis industry in his first budget proposal. Recently, however, Gov. Murphy has been less resolute about a legalization bill coming to fruition by his self-imposed deadline, saying that it was “too early to tell.”
Gov. Murphy and Senate President Sweeney
That is not to say that legal cannabis will not happen in New Jersey. The initial time frame was ambitious – perhaps overly so – but Gov. Murphy and Senate President Sweeney are still pushing for legalization. “There’s no reason to believe we can’t get there,” Gov. Murphy recently stated. “This is not one you get overnight. This takes time. We’re in that process right now.” Sen. Sweeney added “I don’t know if we’re going to be able to get it done in the budget session. I was actually hoping to get it done in the first 100 days. But we have work to do. I think it’s time for us to really start putting a plan in place, have hearings, and for the governor to hold some town halls and draw more attention to it.”
Following Attorney General Sessions’ rescinding of the Cole Memorandum, the most vocal opposition has come from within the Republican Party. Senator Cory Gardner has consistently held up Department of Justice nominees based on his perception that Gen. Sessions reneged on a promise to continue the Obama Administration’s decision not to enforce cannabis laws in states that have legalized.
Recently, Sen. Gardner and President Trump had a private discussion about the cannabis industry and Gen. Sessions. In response, Sen. Gardner dropped his attacks on Department of Justice nominees, noting:
“I have received a commitment from the president that the Department of justice’s rescission of the Cole memo will not impact Colorado’s legal marijuana industry. Furthermore, President Trump has assured me that he will support a federalism-based legislative solution to fix this states’ rights issue once and for all.”
Sen. Gardner and President Trump
While this statement does not offer particulars, two important questions emerge. The first is whether any leniency vis a vis legal cannabis will only be afforded to Colorado – the state with the Republican legislator whose actions were negatively impacting a Republican political agenda – or to all states with legal cannabis (irrespective of the party affiliations of their elected officials). The second focuses on how serious the President (and the Congress) is about a pledge to resolve the discrepancies between state and federal marijuana laws.
This blog has discussed Attorney General Sessions and his recent actions to rescind the Cole Memorandum, an Obama Administration directive that federal law enforcement should not pursue cannabis businesses operating legally within a state’s regulatory framework.
Recently, General Sessions explained that, notwithstanding the retraction of the Cole Memorandum, the Department of Justice would still functionally follow the same policies based on a lack of resources:
“We’re not going to be able, even if we desired, to take over state enforcement of routine cases that might occur,” Sessions acknowledged. “Federal agents are highly paid, highly trained, and they work on cases involving cartels, international organizations, major distribution networks, large amounts of cash. And they deal with criminal organizations, RICO-type cases. And we’re not out there prosecuting those cases every day.”