New Jersey Gears Up Its Legalized Marijuana Program

Here's what you need to know about the proposed "New Jersey Marijuana Legalization Act."

By Steve Schain, Senior Attorney at Hoban Law Group.

Amplifying its existing medical marijuana program and proposing an adult-use system, this month New Jersey's legislature proposed "the Marijuana Legalization Act" and the Department of Health ("Health Department") offered regulations fleshing out Governor Murphy's March 23, 2018 Executive Order 6 expanding existing law's medicinal cannabis program ("Executive Order 6 Regulations").

With both patients and consumers "chomping at the bit" and a massive head start to dominate the Eastern Seaboard's Mid-Atlantic adult-use market, pressure is mounting on the Garden State to pull the trigger.

Marijuana Legalization Act

Legalizing Adult-Use for those 21 years of age and over, the New Jersey Marijuana Legalization Act calls for 120 adult-use and 98 medical marijuana dispensaries and establishes:

  • A "Division of Marijuana Enforcement" under New Jersey's Treasury Department (and not within the Attorney General nor Health Department) governing the adult-use program;
  • 4 license categories: Class 1 Marijuana Grower; Class 2 Marijuana Processor; Class 3 Marijuana Wholesaler; and Class 4 Marijuana Retailer; and
  • An escalating consumer tax scheme starting at 10% in Year 1 and then increasing to 15% in Year 2, 20% in Year 3, and capping out at 25% in Year 4.

Additionally, the New Jersey Marijuana Legalization Act:

  • Permits 6 existing Medical Marijuana licensees to immediately apply to sell Adult-Use marijuana;
  • Allows an on-premise "retail marijuana consumption area" within dispensaries;
  • Phases out "7% medicinal cannabis sales tax" over ensuing 3 years;
  • Prohibits denying medical care, housing or job based on a "positive drug test" unless placing school, employer, or landlord "in violation of federal law or causing it to lose a federal contract or funding"; and
  • Provides municipalities with 180 days to pass dispensary-banning-ordinance.

Executive Order 6 Regulations

The Health Department released new regulations fleshing out Executive Order 6, which, in turn, adds both five (5) qualifying conditions (anxiety, migraines, Tourette syndrome, chronic pain relating to musculoskeletal disorders, and visceral pain relating to internal organs) and empowers the Health Department to add qualifying conditions including opioid addiction.

The Executive Order 6 Regulations:

  • Reduces Program's registration fee from $200 to $100;
  • Makes senior citizens and military veterans (and any minor child for which they're "designated caregivers") eligible for $20 "reduced registration fee";
  • Establishes a "criminal and civil penalties exemption" for Medical Marijuana use or possession; and
  • Beefs up application submission review and permit issuance procedures to require evidence of community engagement and minority, women, and veteran participation in an Alternative Treatment Center's operations through ownership, management, and local hiring plans, and endorsements of community organizations.

Steve Schain is a Senior Attorney to Hoban Law Group and admitted to practice in Pennsylvania and New Jersey. Steve represents entities, governments and individuals in choosing a structure, preparing and submitting license application, regulation, compliance and litigation, and drafting legislation. A nationally recognized consumer finance litigation, banking law and cannabis law expert, Steve is a The Legal Intelligencer and Cannabis Business Executive columnist, frequent Pennsylvania Bar Institute and National Bar Institute author and lecturer and serves as a court appointed judge pro tempore and arbitrator. He can be reached at steve@hoban.law.

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