Cannabis Business and New Jersey
What’s the difference between recreational and medical marijuana legalization? In the state of New Jersey, medical marijuana patients must have a medical condition that's certified by a physician. If they qualify, patients can apply for a medical card. Cardholders can purchase medical products at dispensaries known as Alternative Treatment Centers. Residents without a card cannot purchase medical marijuana products from treatment centers. Now that recreational use is legal in New Jersey, it's safe to say we'll see recreational dispensaries in 2022. When was hemp legalized in New Jersey? Hemp-derived CBD remains legal in New Jersey in all forms. The Garden State became one of the first to have a hemp plan approved by the USDA. Medical Marijuana: In January 2010, New Jersey passed the Compassionate Use Medical Marijuana Act (CUMMA), which allows residents to use marijuana to alleviate "symptoms associated with debilitating medical conditions." Recreational Marijuana: In November 2020, New Jersey Public Question 1 passed with 67% of the vote. This amendment to the state constitution legalizes the possession and use of marijuana for persons age 21 and older. It also legalizes the cultivation, processing, and sale of retail cannabis. Which cannabis bills did Gov. Murphey sign into law? Three months after recreational marijuana was voted legal, s Governor signed a package of bills into law regarding the state's (c*) industry. The three bills enacted are: The New Jersey Cannabis Regulatory, Enforcement Assistance, and Marketplace Modernization Act, Assembly Bill No. 21 (A21), also known as the "Adult-Use Act," allows consumers who are at least 21 years of age to buy cannabis products from licensed retail businesses. Assembly Bill No. 1897 (A1897), also known as the "Decriminalization Bill," decriminalizes the possession of up to six ounces of cannabis or up to 170 grams of hashish. The "Clean-Up Bill," Assembly Bill No. 5342 (A5342), clarifies cannabis use and possession penalties for individuals younger than 21 years of age. More particularly, the Clean-Up Bill establishes a three-level warning system for underage possession or consumption of cannabis items. How will recreational legalization affect the state of New Jersey? The Legislature estimates that the state will save $127 million per year on marijuana-related arrests alone. The new bill also utilizes taxes from legalized purchases for social justice in areas determined as Impact Zones. These zones are communities highly affected by the criminalization of cannabis. With 85,000 registered medical marijuana patients in September 2020, estimated projections for recreational sales are even higher. Market professionals have estimated $400 million in just the first year of adult-use. That number more than doubles to $950 million for projected sales by 2024. What can you legally do now? Purchase and consume cannabis. The new law states that New Jersey residents who are 21 or older and have valid identification may possess up to six ounces of marijuana, including cannabis flower, adulterants, and diluents. Up to five grams of resin is also legal, but not at the same time. You can only possess one or the other. Even though it's legal to consume recreational cannabis products, there aren't any adult-use dispensaries open yet. Some sources predict licensed stores could open as early as September 2021. It's likely to see a growing market in early 2022. CBD and medical marijuana products are still legally available under New Jersey's previously passed Medical Marijuana Program and Hemp Farming Act. Work in a drug-free workplace. While other illegal substances are still grounds for losing your job, cannabis is not. Employers cannot use marijuana
consumption against you during the hiring process or as an employee. Under the new law, "No employer shall refuse to hire or employ any person or shall discharge from employment or take any adverse action against any employee with respect to compensation, terms, conditions, or other privileges of employment because that person does or does not smoke, vape, aerosolize or otherwise use cannabis items...". Possess marijuana-related paraphernalia. New cannabis regulations introduce an exception that declares drug paraphernalia as illegal "other than when used, or possessed with intent to use, for ingesting, inhaling, or otherwise introducing marijuana or hashish into the human body." In basic terms, items used for marijuana consumption are okay, but any other drug paraphernalia is still illegal. You can drive or ride in a vehicle that smells like marijuana. Officers are no longer allowed to search your vehicle because of marijuana odor. It is, however, still illegal to cross state lines and to possess more than the legal limit. What's still illegal? It's illegal to grow at home or without a license. New Jersey residents are not allowed to cultivate cannabis at home. The only legal cannabis in the state will be cannabis grown at a state-licensed cultivation facility. Non-licensed growers will face criminal penalties. Smoking in a rental property. The new law states that "the smoking, vaping, or aerosolizing of marijuana or hashish may be prohibited or otherwise regulated on or in any property by the person or entity that owns or controls that property." Building owners can't ban the possession of marijuana products, but they can prohibit combustion and vaporization of them. In other words, your landlord can make a rule against smoking but can't stop you from using edibles. You can't drive while you're under the influence. While you can travel within state lines with your cannabis products, driving under the influence of any substance is still a violation of New Jersey's "Driving While Intoxicated" law found here: NJSA 39:4-50 What kind of opportunities do industry in New Jersey? Now that recreational marijuana is legal, business licenses are the next step. Recreational retailers, called adult-use stores, cannot open until they apply for and obtain the correct license. You can apply for a business license. The newly formed Cannabis Regulatory Commission has to draw up regulations no more than 180 days following the law enactment. They will then begin accepting applications for licenses within 30 days of establishing the rules. There are two types of licenses. As long as an applicant follows relevant regulations and ordinances applicable to their business operations, they receive a permanent license within a month of approval. Licenses will expire after one year. If an applicant is not in compliance with every aspect of the requirements expected for full licensure, they can still obtain a conditional license. Approval is contingent upon providing sufficient plans to achieve compliance for full licensure. Licensees will have 120 days to prove that they have completed the actions necessary to obtain a permanent license. There are six potential license classes in e cannabis / marijuana industry. Class 1: Cannabis Grower for growing and cultivating cannabis Class 2: Cannabis Processor for manufacturing, preparation, and packaging of cannabis items Class 3: Cannabis Wholesaler for obtaining and selling cannabis items for later resale Class 4: Cannabis Distributor for transporting cannabis items in bulk from one licensed establishment to another Class 5: Cannabis Retailer for the sale of cannabis items to consumers Class 6: Cannabis Delivery for providing delivery services to licensed cannabis retailers and their customers Who can apply for a license? New Jersey residents age 21 and above can apply for a business license either alone or in partnership with someone. During the first two years of sales, only 37 license applications are up for grabs. This limit does not apply to micro licenses with ten or fewer employees and 2,500 square feet of canopy space. For the first 18 months, no business will be allowed to have both cultivation and retail licenses. The 12 currently licensed medical (m*)operators will be permitted to get adult-use licenses, but only if the company can prove it has sufficient supply to meet medical marijuana demand. Is priority being given to specific applicants? "Impact zones" are the first criteria for priority licensing. These are communities impacted by unemployment, poverty, or past marijuana enforcement. The CRC plans to grant at least 25% of licenses to applicants who reside in such zones. With social equity in consideration, 30% of all legal cannabis licenses awarded will be to businesses owned by women, minorities, or disabled veterans. Other priority factors will include long-term residents with at least a 5% investment interest in an entity. Popular questions and answers. What will the taxes be on cannabis? The amendment prohibits a specific marijuana tax. However, cannabis products will be subject to the standard NJ sales tax of 6.625% and possibly an additional 2% imposed by local governments. The Cannabis Regulatory Commission could also institute an excise tax for cultivation. If there is a social equity tax, the entire revenue will go toward social justice programs for impact zone communities. The majority of state-level tax revenues will go towards repairing damages inflicted by the war on drugs. The rest will support the CRC and infrastructure. When and where can I purchase marijuana for recreational use? While the new laws allow the first adult-use stores to open 180 days after Gov. Murphy signed them into effect, it's more likely to see stores open in early 2022. Leafly speculates that "the state Cannabis Regulatory Commission must be appointed and get the entire industry's regulatory system up and running before adult-use stores open. What kind of cannabis products can you buy recreationally? Marijuana stores may sell cannabis, resin, edible products, and extracts, but not seedlings and immature marijuana plants. Seeds and plants are prohibited. Edible items must have only 100 mg of THC per package total and servings divided into 10 mg pieces. Where can Marijuana be consumed in NJ? Even though marijuana is legal, you can't smoke it wherever you want. New Jersey marijuana users may only consume cannabis on their property or in designated consumption areas. State law defines "consumption areas" as either an indoor facility or a structure attached to licensed places that sell recreationally. There aren't any areas set up yet, but New Jersey plans to start opening cannabis lounges. Can I buy marijuana if I'm not a resident? Yes. Adults who are at least 21 can purchase marijuana while visiting from out of state. Although, it's still illegal to cross state lines with cannabis products in your possession.