On Monday, the New Jersey Department of Health announced that it is seeking new applicants to operate 108 additional Alternative Treatment Centers – 38 in the northern region of New Jersey, 38 in the central region and 32 in the southern region. These licenses will include cultivation (24), manufacturing (30) and dispensaries (54). This is massive expansion of the medical cannabis program in New Jersey, which now has only twelve (12) ATCs licensed.
Application forms will be available on July 1, 2019 and will be due on August 15, 2019. The New Jersey Department of Health has published a Request for Applications that provides information for potential applicants.
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.
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.
On Monday, March 25, the New Jersey Legislature chose not to vote on the adult use cannabis legalization bill that has been the subject of debate for several years. The vote was delayed due to the lack of support for the bill. This is certainly a roadblock to adult use cannabis in New Jersey, but the efforts to legalize are not over. Legislators will continue to debate the merits of cannabis legalization in the hope that the outstanding assemblymen and senators will change their positions and vote in favor of cannabis the next time the bill is presented for a vote. Alternatively, the issue of cannabis legalization could be put to a ballot question, which would give New Jerseyans an opportunity to make their “voice heard.”
This blog will continue to follow all of the legalization efforts in New Jersey.
Earlier 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.
Fed. Chairman Jerome Powell
This blog has previously addressed the difficulties the cannabis industry encounters with the current federal banking system. One potential solution proposed by Governor Murphy was the establishment of a state bank for cannabis businesses only, which has yet to materialize.
A recent development on this issue took place nationally when Chairman of the Federal Reserve Jerome Powell requested clarity on this subject from the Senate Banking Committee. Chairman Powell was responding to a question from Senator Robert Menendez (D-N.J.), who raised that New Jersey is moving toward legalization of recreational cannabis. The concern for Senator Menendez – as is the concern for many in the industry – is that cannabis businesses will be shut out of the banking industry and will be forced to operate only in cash, which is a safety risk.
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?
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.
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.
The final push to advance the cannabis legalization agenda will take place in a closed door session on Thursday, December 13. At that time, the governor will meet with Senate President Sweeney and Assembly Speaker Coughlin to continue to negotiate certain nuances of cannabis legalization. Front and center will be the proposed Cannabis Regulatory Commission, a state agency legislators want to create to control both the proposed recreational cannabis industry and the medicinal industry.
As the debate about legalized adult use cannabis continues to take place in Trenton, a new proposal to the legislative bill represents an intriguing potential opportunity to cannabis entrepreneurs: microbusinesses.
As the various drafts of the legislative bills to legalize cannabis have evolved, the barriers for entry to the New Jersey cannabis market have been relaxed for out-of-state operators. While early drafts of the bill made New Jersey residency a requirement, that is no longer a strict requirement so long as one of the proposed owners of a cannabis business is from New Jersey. The legislature’s relaxation of this requirement makes sense: operators from other states have more experience and can help better establish New Jersey cannabis businesses.
But that comes with a very real drawback for New Jersey entrepreneurs. It will not be easy for New Jersey entrepreneurs to compete with the experience and millions of dollars of funding that could potentially come from out-of-state operators. The concept of microbusinesses may help level the playing field.