Hoban Law: At A Glance – Jersey’s Just-Passed Adult Use Act

On Thursday, December 17, 2020, New Jersey lawmakers approved the “Cannabis Regulatory, Enforcement Assistance, and Marketplace Modernization Act” (“Act”), which next goes to Governor Phil Murphy for his expected signature. Authored By: Steve Schain

Steve Schain

  Under the Act’s timetable, rules must be developed within 180 days of enactment or within 45 days of all five Cannabis Regulatory Commission members being appointed. New Jersey’s decade-old Medical Marijuana Program is comprised of 95,000 patients and 12 Alternative Treatment Centers (“ATCs”) (including Acreage Holdings, Columbia Care, Curaleaf, Green Thumb Industries, iAnthus, and TerrAscend) serving its 9,241,900 population.

Under the Act:

  • Adults 21 and older could purchase an ounce of marijuana or 5 grams of concentrated Cannabis
  • After Act’s rules are issued, existing ATCs could immediately begin adult-use sales but only if having sufficient quantities to meet medical Cannabis demand

Licenses

  • *Establishes 6 classes of licensed businesses: cultivator, manufacturer, wholesaler, distributor, retailer, and delivery
  • *up to 37 marijuana grow licenses may be issued for the first 2 years of legal sales (but the limit does not apply to micro-licenses with 10 or fewer employees)

Tax

  • * 7% state sales tax and municipalities could impose up to 2% hosting tax
  • * Excise tax on cultivators
  • * 70% of sales and excise tax revenue will support legal aid, health care, and mentoring                                             programs in minority communities disproportionately affected by the drug war
  • All prior municipal “Marijuana operation prohibitions” are voided, and municipalities have 180 days from enactment to bar adult-use operations or decide how many licensed businesses to permit
  • Retail stores allowed statewide, but local jurisdictions could ban them
  • Delivery services could operate statewide regardless of local bans
  • Retailers could allow on-site consumption as long as they have local approval

Cannabis Regulatory Commission

  • grant licenses to growers, processors, wholesalers, laboratory testing facilities, distributors, delivery services, and retailers determined by customer demand
  • 25% of licenses would go to microbusinesses capped at 10 employees and include additional residency requirements.
  • 15% of licenses reserved for minority-owned businesses
  • 15% of licenses reserved for businesses owned by women or veterans.
  • 35% of licenses in each license category would be “conditional” to make the process more accessible to lower-income applicants.

Application Scoring Priorities

  • * 25% of total licenses will be awarded to applicants employing 25% of individuals from “impact zones” negatively impacted by unemployment, poverty, or past Marijuana enforcement activity
  • * residents of at least 5 years holding at least a 5% investment interest in an entity
  •  Labor Peace Agreements required except for microbusinesses.
  • creates Office of Minority, Disabled Veterans and Women Cannabis Business Development promoting marginalized groups inclusion
  Written by Steven Schain Copyright ©2020 by Steven M. Schain, Esquire