Regulation

New Jersey Legislators Pass Adult Use Recreational Cannabis Bill

/ Alexander Banzhaf

In a significant step towards the legalization of recreational cannabis in the Garden State, the New Jersey state Assembly and Senate passed Bill S21 on Thursday, making New Jersey poised to become just the fourth state on the east coast to legalize recreational cannabis. The Bill establishes the proposed framework of the industry and is now awaiting the signature of Gov. Murphy.

Earlier this fall, voters overwhelmingly approved a constitutional amendment to legalize cannabis in New Jersey after the New Jersey legislature was unable to pass an earlier draft of the Bill.

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Bill that Would Enable Banks and Insurance Companies to Provide Services to the Cannabis Industry Passes the House; Heads to the Senate

/ Robert Vacchiano

Iconic image of a bank.On September 25, 2019, the U.S. House of Representatives passed H.R. 1595, the Secure and Fair Enforcement (SAFE) Banking Act.  The legislation is intended to allow the cannabis industry to have access to financial services and to enhance public safety by reducing the industry’s reliance on cash.  It provides a safe harbor for financial services companies, including banks, credit unions, and insurers, to serve cannabis-related businesses operating under state law without the threat of regulatory backlash or criminal prosecution.

The House voted 321 to 103 to pass the bill.  The bill was supported in the House by 229 Democrats, 91 Republicans, and 1 Independent.

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Voters to Decide Fate of Legalized Cannabis in New Jersey

/ Alexander Banzhaf

New Jersey State Line

FLICKR/MATT HINTSA

Senate President Stephen Sweeney announced that the legislature is no longer pursuing cannabis legalization through the traditional legislative process.  Instead, the issue of cannabis legalization will be put to a ballot measure in the 2020 election (which coincides with the next presidential election where voter turnout is supposed to be the highest).

Polling data still indicates that a majority of New Jerseyans support legalizing recreational cannabis.  If that is borne out in the 2020 ballot measure, legal cannabis will be a reality in New Jersey – it may simply take more time than originally anticipated.

This blog will continue to track the developments of cannabis law in New Jersey.

Bill that Would Provide Cannabis Industry with Access to Banking and Insurance Services Advances in the House

/ Robert Vacchiano

Iconic image of a bank.As a recreational cannabis bill in the New Jersey legislature stalls, federal legislation directed at expanding the cannabis industry’s access to banking and insurance services advances in Congress.   On March 28, 2019, the U.S. House of Representatives Committee on Financial Services approved H.R. 1595, the Secure and Fair Enforcement (SAFE) Banking Act.  The bill was introduced to allow the cannabis industry to have access to financial services and to enhance public safety by reducing the industry’s reliance on cash.  It provides a safe harbor for financial services companies, including banks, credit unions, and insurers, to serve cannabis-related businesses operating under state law without the threat of regulatory backlash or criminal prosecution.

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Murphy and Legislators Announce Deal for Legalized Cannabis

/ Alexander Banzhaf

Image of New Jersey State HouseEarlier this week, Governor Phil Murphy, Senate President Steven Sweeney, Assembly Speaker Craig Coughlin, Senator Nicholas Scutari and Assemblywoman Annette Quijano jointly announced an agreement on the major outstanding issues for cannabis legalization: regulatory control and taxation.  A new bill, that has not been publicly released, will be debated over the next two weeks in anticipation of a vote on March 25, 2019.

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Early Cannabis Trends in 2019

/ Alexander Banzhaf

With the new year in full swing, New Jersey Cannabis Counsel highlights some of the most impactful news relevant to the potential legalization of cannabis in New Jersey.

New Attorney General Uninterested in Legal Cannabis Businesses?

Photo of William Barr

United States Attorney General Nominee William Barr

New Attorney General nominee William Barr testified at his confirmation hearing that he does not intend to pursue cannabis businesses operating legally pursuant to state regulations.  This is an about-face from former Attorney General Sessions, who rescinded the Cole Memorandum, which was the Obama era policy document that effectively told the Department of Justice to only pursue legal cannabis businesses that were linked to cartels, children or trafficking cannabis to states where it is not legal.  Mr. Barr has also called for additional cannabis cultivation for research purposes, and understands that the new bill legalizing the growth of hemp has implication for cannabis.  Mr. Barr has not formally committed to preparing a revised Cole Memorandum, but if confirmed, Mr. Barr as Attorney General would be a potential boon for the cannabis industry.

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Sen. Scutari Advocates for a New Jersey Cannabis Regulatory Commission

/ Alexander Banzhaf

Image of Senator Nick Scutari (D)

Sen. Nicholas Scutari (D)

New Jersey State Senator Nicholas Scutari (D), the architect of the proposed cannabis legalization bill, authored an op-ed advocating for the creation of a Cannabis Regulatory Commission.  The Cannabis Regulatory Commission has been a hotly debated topic in the legalization process.  The various legalization bills that have been drafted have included versions of the Cannabis Regulatory Commission (originally named the “Division of Marijuana Enforcement”), which would be designed to function as the state regulatory body for the adult use legal cannabis industry.  The Cannabis Regulatory Commission would establish the number of licenses to be issued to growers and retailers, process license applications and have the authority to regulate the cannabis industry.

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Attorney General Sessions Clarifies DOJ Position on Legal Cannabis Businesses

/ Jeremy Kleiman

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:

Jeff Sessions“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.”

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Bipartisan Group of Senators Fight Back Against Attorney General Sessions

/ Alexander Banzhaf

On February 12, 2018, a bipartisan group of senators wrote a letter (“the Letter”) to Sen. Thad Cochran (R. Mississippi), Chairman of the U.S. Senate Committee on Appropriations and Sen. Patrick Leahy (D. Vermont) to fight back against Attorney General Sessions’ actions on January 4, 2018 which rescinded the Cole Memorandum.  The Letter supports the regulatory frameworks of the states which have legalized recreational adult use cannabis and argues that General Sessions’ actions would “deny medications to the sick, push individuals back into illicit markets, and nullify the previously-effective regulations – all while thwarting the democratically-expressed will of the states.”  The Letter otherwise strongly supports states with legal cannabis and attacks Attorney General Sessions’ actions against cannabis.

Jeff Sessions

Attorney General Sessions

The goal of the Letter is to convince the Senate Committee on Appropriations to add language to spending bills to prevent federal enforcement of cannabis laws.  This idea follows the Rohrabacher-Farr Amendment, which prohibits the Justice Department from spending funds to interfere with the implementation of state medical cannabis laws.  This amendment safeguards the medicinal cannabis industry from federal law enforcement.  The Letter seeks to do the same thing for recreational adult use cannabis.  While the Rohrabacher-Farr Amendment and the proposed amendment to the spending bill do not re-write the Controlled Substances Act, the effect would be (and is for medicinal cannabis) to render it meaningless by eliminating funding for its enforcement of cannabis laws.

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Cannabis Businesses and State Banks: a Possible Solution to a Difficult Issue

/ Alexander Banzhaf

One of the more frustrating aspects of the cannabis industry for business owners is the lack of available banking services.  Many banks are hesitant to provide banking services to the cannabis industry because of the conflict between state legality and federal illegality, not to mention the obligation of banks to file Suspicious Activity Reports for transactions that may violate the Bank Secrecy Act.  While the number of banks providing services to the cannabis industry is growing, obtaining banking services is still very challenging for cannabis entrepreneurs.  The standoff between banks and the cannabis industry manifests in many frustrating ways, including but not limited to strictly cash businesses, banks who charge excessive services fees to cannabis business clients and the need to use credit unions in lieu of traditional banks (who themselves are fighting their own legal battles).

Iconic image of a bank.

Recently, California proposed an idea that could very well reshape the entire cannabis industry: a state sponsored bank for cannabis businesses.  California State Treasurer John Chiang and Attorney General Xavier Becerra are planning to conduct a feasibility study to test whether a California state bank would help California’s many cannabis businesses.

“We are contending with the emergence of a multi-billion dollar cannabis industry that needs banking services, and a private banking industry that is stymied by federal law in meeting the needs of the new industry,” Chiang said.

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