New Jersey Governor Murphy Signs Historic Adult-Use Cannabis Reform Bills Into Law

NEW JERSEY:  Governor Phil Murphy today signed historic adult-use cannabis reform bills into law, legalizing and regulating cannabis use and possession for adults 21 years and older (A21 – “The New Jersey Cannabis Regulatory, Enforcement Assistance, and Marketplace Modernization Act”) and decriminalizing marijuana and hashish possession (A1897). The Governor also signed S3454, clarifying marijuana and cannabis use and possession penalties for individuals younger than 21 years old.

“Our current marijuana prohibition laws have failed every test of social justice, which is why for years I’ve strongly supported the legalization of adult-use cannabis. Maintaining a status quo that allows tens of thousands, disproportionately people of color, to be arrested in New Jersey each year for low-level drug offenses is unjust and indefensible,” said Governor Murphy. “This November, New Jerseyans voted overwhelmingly in support of creating a well-regulated adult-use cannabis market. Although this process has taken longer than anticipated, I believe it is ending in the right place and will ultimately serve as a national model.

“This legislation will establish an industry that brings equity and economic opportunity to our communities, while establishing minimum standards for safe products and allowing law enforcement to focus their resources on real public safety matters,” continued Governor Murphy. “Today, we’re taking a monumental step forward to reduce racial disparities in our criminal justice system, while building a promising new industry and standing on the right side of history. I’d like to thank the Legislature, advocates, faith leaders, and community leaders for their dedicated work and partnership on this critical issue.”

“At long last, New Jersey is turning the page on our previous treatment of marijuana use,” said Dianna Houenou, incoming Chair of the New Jersey Cannabis Regulatory Commission (CRC). “I am excited to get to work building on the successes of the medical program and standing up the adult-use cannabis industry. It’s an honor to be part of this historic movement in New Jersey.”

“The failed War on Drugs has systematically targeted people of color and the poor, disproportionately impacting Black and Brown communities and hurting families in New Jersey and across our nation,” said U.S Senator Cory Booker. “Today is a historic day, and I applaud Governor Murphy, the legislature, and the many advocates for racial and social justice whose leadership is ensuring that New Jersey is at the forefront of equitable marijuana legalization policy. I will continue to work with my colleagues in the Senate to end the federal marijuana prohibition so we can finally begin healing the wounds of decades of injustice.”

“This is a historic reform that will have a real-life impact on social justice, law enforcement and the state’s economy,” said Senate President Steve Sweeney. “We can now move forward to correct social injustices at the same time that marijuana is made legal for adults. This  will launch a new cannabis industry with the potential to create jobs and generate economic activity at a time when it is desperately needed. The decriminalization law is the most sweeping measure of its kind in the country and is a groundbreaking step in our continued effort to make criminal justice reforms that are fairer and more effective. This will help reduce the racial disparities and social inequities that have long plagued our criminal justice system.”

“For the last fifty years, marijuana criminalization has been used as a tool to propel mass incarceration,” said Senator Sandra Cunningham. “It has done immeasurable harm to Black and Brown communities around the country, and today we begin to right the ship here in New Jersey. I look forward to seeing the tangible impact this legislation has on our communities in the years to come.”

“I am proud to have been a driving force behind the most progressive decriminalization law in the country and I am grateful to finally see it enacted,” said Senator Teresa Ruiz. “Every day roughly 100 people in New Jersey are arrested for marijuana possession, this law is a move that offers individuals a second chance and ensures they do not become entangled in the criminal justice system. This is yet another step towards bringing justice and equity to our communities. Going forward, we must continue to look for creative solutions to reverse the generational impact the War on Drugs has had.”

“This will usher in a new era of social justice by doing away with the failed policy that criminalized the use of marijuana,” said Senator Nicholas Scutari, the leading advocate of legalizing adult-use marijuana in New Jersey over the past decade. “Too many people have been arrested, incarcerated and left with criminal records that disrupt and even destroy their lives. We don’t want the criminal justice system to be an unfair barrier to success. By implementing a regulated system that allows people age 21 and over to purchase limited amounts of marijuana for personal use we will bring marijuana out of the underground market where it can be controlled, regulated and taxed, just as alcohol has been for decades. New Jersey will now be a leader in legalizing a once stigmatized drug in ways that will help the communities hurt the most by the War on Drugs and realize the economic benefits of the new adult-use cannabis market.”

“We’re moving closer to the long-overdue need to end cannabis prohibition,” said Assemblywoman Annette Quijano. “So much time, effort, and thought have gone into this legislation. We’ve continued conversations, for what I believe, has produced a stronger piece of legislation with a focused eye toward social justice and equity. This is the beginning of a new era of economic opportunity, social justice for marijuana possession, and hope for a better future for thousands of New Jersey residents.”

“With legalization comes an unprecedented opportunity for residents to clean the slate with expungement provisions and for communities to grow their economic base with businesses,” said Assemblyman Jamel Holley. “A key component of cannabis legalization is addressing social justice concerns. The fact that Black New Jerseyans are 3 or 4 times more likely to be arrested on cannabis charges has contributed to the disenfranchisement of black communities. We have the opportunity here to also right the wrongs in our society in regards to past criminal possession of cannabis. No matter where you stand in the legalized marijuana debate, there has been a clear understanding that minorities within our urban communities have been hit hardest in the so-called War on Drugs. During this entire campaign for legalization, there has been one united vocal stance: There was harm done in the past and it must be corrected.”

“This new law includes real, enterprising opportunities for New Jersey communities that have been disproportionately impacted by cannabis prohibition, along with more defined employment opportunities and a commission that requires diversity,” said Assemblywoman Britnee Timberlake. “This will be a clear revenue generator for the State, and the social justice and diversity portion in the legislation remains imperative.”

“Undoubtedly, this is the largest regulatory undertaking the state has considered since the Casino Control Commission,” said Assemblywoman Angela McKnight. “Remaining at status quo meant continued disparity in arrests for African Americans and teens for amounts now to be considered personal use.  We are moving the state in a direction more compassionate for cannabis and in line with what is happening across the country in regards to legalization.”

“This has been a long time coming in our State,” said Assemblyman Joseph Danielsen. “who chairs the Assembly Federal Relations and Oversight Reform Committee led the discussion on the bill in today’s hearing. “Social justice for black and brown communities, which have been generationally impacted by cannabis prohibition, and equity in business are priorities in this legislation. We cannot fairly, or effectively provide regulation without ensuring these communities stay at the forefront of the conversation.”

“New Jersey voters on November 3rd issued the Legislature a mandate: to provide the infrastructure for the legalization of cannabis in New Jersey. Today, we move on that directive by presenting legislation for discussion with fellow legislation and statewide stakeholders,” said Assemblyman Benjie Wimberly. “The War on Drugs in many ways became a war on particular communities, incarcerating millions of black and brown people and affecting families irreparably for decades. Our work on refining this legislation aims to correct the economic and social justice disparities surrounding cannabis use.”

“With Governor Murphy’s signature, the decades-long practice of racist marijuana enforcement will begin to recede, in a shift that emphasizes the urgency of building the most equitable framework possible for cannabis legalization,” said Amol Sinha, Executive Director of the American Civil Liberties Union of New Jersey, which is a founding member of New Jersey United for Marijuana Reform. “With this historic reform, New Jersey also shifts our approach to youth possession and use by moving away from the punitive status quo to a framework that values public health, harm reduction, and the well-being of young people. Our state’s cannabis laws can set a new standard for what justice can look like, with the removal of criminal penalties for possession and an unprecedented portion of tax revenue dedicated to addressing the harms wrought by the drug war. Signing these laws puts in motion the next phase of this effort: to work relentlessly to transform the principles of legalization into greater racial and social justice in New Jersey. This is a new beginning – and the culmination of years of advocacy – and we must keep in mind that it is only the start.”

Under A21, the Cannabis Regulatory Commission (CRC) will promulgate regulations to govern the medical and adult-use industries and oversee the applications for licensing of cannabis businesses. The legislation further provides for the Legislature to reinvest cannabis revenues in designated “impact zones”; directs the CRC to promote diversity and inclusion in business ownership; and contains critical employment protections for people who engage in lawful behavior with respect to cannabis.

A1897 reforms criminal and civil penalties for marijuana and hashish offenses, as well as provides remedies for people currently facing certain marijuana charges. The bill prevents unlawful low-level distribution and possession offenses from being used in pretrial release, probation, and parole decisions and provides certain protections against discrimination in employment, housing, and places of public accommodation. The bill also creates a pathway to vacate active sentences for certain offenses committed before enactment of the enabling legislation.

The Governor today also signed S3454 into law, clarifying penalties for marijuana and cannabis possession and consumption for individuals younger than 21 years old. The legislation corrects inconsistencies in A21 and A1897 concerning marijuana and cannabis penalties for those underage.

“I have been working on decriminalizing adult-use marijuana for well over three years now, and I am happy to finally see it become a reality,” said Senator Ronald Rice. “This is a common-sense and just law that gives an equal playing field for folks in communities of color. Many have argued that legalizing adult-use marijuana has been for social, economic and criminal justice, however, decriminalization for me, is equally as important. I will continue to watch closely and fight to ensure communities of color are treated equally.”

“This is only one piece in the many parts of change that must be done in the name of social justice for our communities. The War on Drugs in many ways became a war on particular communities, incarcerating millions of people and affecting families irreparably for decades,” said Assemblyman Benjie Wimberly. “The action we take now to help our black and brown communities who have been disproportionately affected by current laws surrounding cannabis use is critical to trauma for future generations.”

“There have been far too many people, especially those from Black and Hispanic communities, who have been negatively impacted by the criminalization of cannabis,” said Assemblywoman Annette Quijano. “There have been long-term impacts on the lives of all people in this state, but considerably those of color. This law is the product of taking a hard look at our current laws, listening to the will of the majority of New Jerseyans and taking a common-sense approach to cannabis offenses.”

“Black New Jerseyans are up to four times more likely to be arrested on cannabis charges than White people. It is a sad fact, a further painful reminder that so people in our communities have been disenfranchised for far too long,” said Assemblyman Jamel Holley. “There have always been glaring social justice concerns and obvious inequity in the high number of arrests of minority residents. Now, finally, this is the time for it to stop.”

“It’s time for the change we seek,” said Assemblywoman Angela McKnight. “New Jersey residents are not happy with the status quo and we need to move in a direction of compassion for the communities that have long been targeted by current regulatory criteria. The call for action, for social justice reform, is resounding throughout our nation. And it begins in New Jersey today.”

“Decriminalization and expungement for those who have been disproportionately incarcerated for marijuana offenses is well overdue in New Jersey and many other states throughout this nation,” said Assemblywoman Britnee Timberlake. “A criminal marijuana charge has a detrimental effect on an individual’s opportunity to access higher education, obtain gainful employment, receive housing support, and address child custody issues.  Not all communities are impacted equally by marijuana enforcement, measures to reduce the collateral consequences of criminal records are ones of racial, social, and economic justice. This is about social justice for a people who have endured the inequities in the law for generations.”

In July 2019, Governor Murphy signed legislation (“The Jake Honig Compassionate Use Medical Cannabis Act”) to reform New Jersey’s Medicinal Marijuana Program (MMP) and expand patient access to medical marijuana, ensuring this life-changing medical treatment is affordable and accessible for those who need it most.

In December 2019, Governor Murphy signed one of the most progressive expungement reforms in the nation, giving individuals entangled in the criminal justice system the opportunity to fully participate in society. S4154 eliminated fees for expungement applications and additionally created a petition process for “clean slate” expungement for residents, as well as required the State to implement an automated clean slate expungement system. Furthermore, the bill required that low-level marijuana convictions be sealed upon the disposition of a case, preventing those convictions from being used against individuals in the future.

 

New Jersey Requesting Applications For 24 ATC Endorsements – What Applicants Need To Know

By: Rosemarie Moyeno Matos, Esq.

NEW JERSEY: Hot on the heels of Governor Phil Murphy’s May 2019 announcement that his administration would be moving forward with expansion of New Jersey’s Medicinal Marijuana Program (the “MMP”), the Department of Health (the “DOH”) published a new Request for Applications (the “RFA”) for new alternative treatment center (“ATC”) permits and endorsements on July 1, 2019. It’s important to note that this RFA process still falls under the purview of the New Jersey Compassionate Use Medical Marijuana Act (“CUMMA”),[1] despite Governor Murphy signing the “Jake Honig Compassionate Use Medical Cannabis Act” (the “Act”) into law on July 2, 2019. The Act will eventually turn oversight of the MMP from the DOH to a Regulatory Cannabis Commission upon its creation.

Pursuant to the RFA, the DOH will award up to 24 permits and endorsements for cultivation, manufacturing and dispensary operations throughout the northern, central and southern regions of the state. This article will summarize the RFA requirements and any significant differences from prior application requirements.

NUMBER OF ENDORSEMENTS BY REGION & OPERATION:

For the first time since the inception of the MMP, the state will be issuing separate “permit endorsements” for cultivation and dispensing operations, presenting an opportunity for small businesses and minorities to enter the industry on a smaller, more affordable scale. The RFA is looking to award:

Total Permit/Endorsements Type of Permit/Endorsement
4 Vertically Integrated Permits (“VIPs”)[2]
15 Dispensary Endorsements
5 Cultivation Endorsements[3]

The 24 ATC permits and endorsements awarded under the RFA are to be distributed regionally and by operation in the following manner:

Region Number and Type
Northern (Warren, Morris, Essex Counties and up):2       Cultivation Endorsements5       Dispensary Endorsements1-2    VIPs*
Central (Hunterdon, Somerset, and Union through Mercer and Ocean Counties):2       Cultivation Endorsements5       Dispensary Endorsements1-2    VIPs*
Southern (Burlington and Atlantic Counties all the way down):1       Cultivation Endorsements5       Dispensary Endorsements1-2    VIPs*

*One VIP will be awarded in each region. The region of the 4th VIP will be determined at the time of award based on the applicant’s overall score and patient need.

Except for VIP permits, each individual endorsement requires a separate application. Applicants should note:

  • you are limited to a maximum of three (3) applications, one (1) per region;
  • you may not submit for a VIP and for individual endorsements;
  • you may only submit for one (1) cultivation endorsement; and
  • you will only be awarded one (1) VIP or one (1) individual endorsement.

APPLICATION COSTS:

Two checks totaling $20,000 must accompany each application submitted. The checks represent a $2,000 non-refundable application processing fee and the $18,000 permit endorsement fee if awarded. The DOH will destroy the $18,000 checks submitted by applicants not awarded an endorsement.

In addition to application fees (up to $24,000 depending on the number of applications submitted and whether a permit/endorsement is awarded), applicants will need typically need budget for real estate, professional services and contractors, and construction costs. Property and construction costs vary depending largely factors such as location and form of interest (lease vs ownership). Professional or contractor’s costs largely depend on the fees of each professional or contractors and the specific needs of the applicant, but an applicant can realistically expect to pay well over $100,000 for professional and contractor services leading up to and during the application process.[4]

APPLICATION REQUIREMENTS:

Similar to last year’s permit applications, current applications will consist of Part A Mandatory Information, Part B Scored Criteria and Personal History Disclosure Forms for each owner with 5% or more ownership interest in the ATC, as well as each principal, director, board member, and employee.

Part A Mandatory Information largely seeks entity and property information including listing of all individuals and entities having greater that 5% ownership interest in the ATC, all creditors and all individuals and entities having managerial/operational control over the ATC. Applicants will also need to include all formation documentation, all contracts related to management, intellectual property, real estate, equity in, or funding of applicant, Letters of Support and evidence of zoning compliance, site plans and a list of its medical advisory board members with a copy of the board’s by-laws.

Part B Scored Criteria (300 points) includes:

1.   Submission of security, environmental impact and quality control and quality assurance plans (30 pts);

2.   ATC’s compliance history in government-regulated marijuana programs or other highly regulated industry (20 pts);

3.   Financial plan/proof of funding evidencing applicant’s ability to meet supply demand (20 pts);

4.   Evidence of community support and participation (20 pts);

5.   Ability to provide appropriate research data through evidence of past contributions (10 pts);

6.   Compliance experience in cultivating, manufacturing, or dispensing marijuana, as applicable, in government-regulated marijuana programs (100 pts); and

7.   Submission of labor peace agreement, labor compliance plan and a workforce and job creation plan with evidence of WBE, MBE or VOB certifications (100 pts).[5]

IMPORTANT DATES:

Action Date
Application Opening Period on or before July 15, 2019
RFA Question Submission Deadline July 26, 2019
Pre-Application Webinar August 2, 2019
Dispensary Apps Submission Deadline 3:00 pm EST on August 21, 2019
Cultivation & VIP Apps Submission Deadline 3:00 pm EST on August 21, 2019
Final Agency Decision None Provided

CONCLUSION: While the number of endorsements to be issued from the June 3rd RFA (108) versus this RFA (24) dropped significantly, there is reason to believe that additional RFAs will be published soon after the Regulatory Cannabis Commission is established and operational, as the medicinal marijuana  patient population continues to grow in leaps and bounds. The question we frequently receive from interested applicants is whether they should be preparing for this application round or future rounds. The answer depends largely on where the applicant stands with its business plan, site control, capital and team (including owners, managers, and employees, as well as outside professionals and contractors). However, if you are not application ready for this round, you should actively continue to work toward it for the next. If history has taught us anything, an applicant truly vested in this space should be preparing themselves to be application ready at a moment’s notice since RFAs tend to drop with little to no advance warning!

The law firm of Moyeno Gonzalez & Associates PC has represented previous applicants in this space and is ready to assist in answering any questions you may have regarding the RFA, the application process and post-licensing compliance. Please feel free to reach out to us via our website.

In her current role as Partner at Moyeno Gonzalez, Rosemarie Moyeno Matos represents both for-profit and non-profit organizations, rendering a wide range of legal services from entity selection and formation to regulatory compliance advice and commercial transaction representation. In August 2018, she represented a client who submitted two applications for vertically integrated Alternative Treatment Center licenses through New Jersey’s Medicinal Marijuana Program. Currently, she represents several entrepreneurs and start-ups in the medical and recreational cannabis space. Through her corporate and regulatory background, Rosemarie has a keen awareness of the issues faced by those participating in the cannabis industry and successfully helps her clients navigate them.
[1]N.J.S.A. 24:6I-1 et seq.
[2] VIPs include one (1) each of a cultivation endorsement, a manufacturing endorsement and a dispensary endorsement.
[3]Cultivation Endorsements are further broken down by tiers based on canopy size. Of the 5 individual Cultivation Endorsements awarded under this RFA, endorsements will be awarded based upon canopy size in the following manner:
1       for a Canopy up to 5,000 ft2
2       for Canopies between 5,001 ft2 and 20,000 ft2; and
2       for Canopies between 20,001 ft2 and 30,000 ft2.
VIP applicants are not restricted to canopy tiers and may choose any canopy size up to 30,000 ft2.
[4]Additional capital needed to evidence financial suitability and to commence operations are not factored into these application costs.
[5] Applicants who fail to submit a signed labor peace agreement will lose 30 points. Additionally, applicants who submit proof of WBE/MBE/VOB certifications will receive full credit of 30 points, while those who submit evidence of meeting the criteria in the future may receive partial credit.

A New Day In The Garden State

By Stu Zakim

Today, long suffering New Jersey residents got a breath of fresh air when new Governor Phil Murphy presented his first budget for fiscal 2019 to the members of the NJ Senate and Assembly in Trenton.

After years of Chris Christie and his archaic views of Cannabis, both as Governor and State Attorney General, we now have a Governor who understands how legalizing adult use Cannabis can bring enormous benefits to the Garden State in many areas.

Among the highlights

“I advocate for legalization, regulation and taxation of marijuana sales to adults.”  Murphy wants New Jersey to “join other progressive states such as California, Massachusetts, Washington, and Colorado by legalizing, regulating, and taxing marijuana.”

“According to research, New Jersey spends upwards of $140 million per year adjudicating low-level marijuana possession offenses. And, marijuana-related arrest rates are tilted three-to-one against African-Americans, even though rates of marijuana use are similar among races. These resources must have a better use, whether to tackle the trafficking of illegal guns, provide stronger community policing, or to crack the back of our opioid epidemic, which was devastating our urban centers long before it made headlines.”

“Legalization will allow us to reinvest directly in our communities – especially the urban neighborhoods hardest hit by the misguided War on Drugs – in their economic development, in health care and housing, child care and after-school programs, and other critical areas. These investments will pay dividends far greater than the cost of mass incarceration.”

The Governor plans to legalize adult-use marijuana by January 1, 2019 and projects $80 million in related revenue in the first fiscal year.  We can only hope.