Now is the time to stay on top of New Jersey cannabis news and updates. We’re here to deliver information as it’s released!
The cannabis space in New Jersey is evolving each day. As more progress is made, the state’s cannabis industry is on track to level up its economy with various business opportunities.
But is the newly-created legal adult-use market worth investing in just yet?
Let’s just say, if you’re considering starting a cannabis business in the Garden State, now is the time to do it! And if you’re already operating as part of the state’s cannabis sector, it’s time to start scaling your adult use business!
This article serves to discuss New Jersey’s Cannabis Regulatory Commission, its medical and recreational marijuana businesses, and other updates on the state’s cannabis space.
Thinking about scaling your operation in NJ? Let Northstar lead the way!
Contact us now to learn how our financial services will grow your endeavor in this budding space!
New Jersey Cannabis Regulatory Commission
The NJ Cannabis Regulatory Commission, established in September 2018, is a newly created agency dedicated to ensuring that the state has a well-regulated marijuana industry. This Commission analyzes and implements updates and changes to the marijuana market.
At this point, we’re still waiting to learn how the Cannabis Regulatory Commission plans to regulate adult-use cannabis products through cannabis legalization. However, for now, it’s responsible for the medical marijuana program within the state, giving patients access to products including:
- Cannabis flower
- Cannabis extract
- Infused oral lozenges
- Cannabis topicals
Recently, there have been some announcements about how cannabis legalization will proceed in New Jersey. While the state has made it legal to use cannabis for medical and recreational purposes, legalization requires New Jersey to create and implement rules for the space.
Medical Marijuana in New Jersey
Medical marijuana in New Jersey is restricted to those with specific medical conditions. In fact, the list of qualifying conditions is extensive and includes:
- Amyotrophic lateral sclerosis
- Chronic Pain
- Inflammatory bowel disease, including Crohn’s disease
- Intractable skeletal spasticity
- Multiple sclerosis
- Muscular dystrophy
- Opioid Use Disorder
- Positive status for Human Immunodeficiency Virus (HIV) and Acquired Deficiency Syndrome (AIDS)
- Post-Traumatic Stress Disorder (PTSD)
- Seizure disorder, including epilepsy
- Terminal illness with a prognosis of fewer than 12 months to live
- Tourette Syndrome
To qualify and become a registered patient with the state’s Medicinal Marijuana Program (MMP), a person must:
- Have and maintain a bona fide relationship with a physician who has registered with the program. This relationship involves having a physician responsible for handling the assessment, care, and treatment of the patient’s debilitating condition.
- Be a Jersey resident.
- Be diagnosed with one of the qualifying medical conditions the New Jersey health care practitioner registered with the MMP has outlined.
Before adult-use marijuana legalization, the state’s medical marijuana operations were limited to serving patients. But with legalization, New Jersey marijuana laws now allow these operations to apply to begin serving weed to the local adult marijuana market.
New Jersey Marijuana for Recreational Use
New Jersey legalized adult-use marijuana. Now that the law is catching up to this progress, the regulations are in place, and sales will likely begin very soon.
Delivery operations will be allowed to support dispensary sales and other local endeavors. Besides delivery within all state municipalities, sales will be permitted in the state municipalities that allow them.
The law also allows cultivation. However, important to note is that municipalities will decide on how the law works within their jurisdiction.
Dispensary operations will not be allowed to open everywhere within the state. But many municipalities will allow them for the tax revenue benefits.
When Did Recreational Cannabis Become Legal in New Jersey?
Governor Phil Murphy signed the new marijuana law into effect on Monday, February 22, 2021. This made Jersey the 14th state to make marijuana legal, effectively creating the way for these adult use operations to become established.
While Murphy couldn’t outline the process the state would use to implement legalization, his team would begin working on the laws and regulations. It’s now August, and we’ve seen a lot of progress. But everyone is still waiting for the final word from Governor Murphy to begin legal sales.
It’s been years since Governor Murphy said these sales would happen. And now that we finally see the light at the end of the tunnel, it’s easy to see why consumers and cannabusiness operators are eager to ignite this industry.
The process has been a long and hard one. But now that Murphy has taken this massive step in the right direction, it’s only a matter of time until we see the state’s cannabusiness operators reap the rewards.
Cannabis Regulatory Updates
New Jersey Dispensaries Cannot Sell Certain Edibles
New Jersey’s dispensaries have been barred from selling edibles that resemble food. But what does this mean exactly?
For starters, the CRC rules highlight cookies and brownies by mention. So, we can expect that baked goods are out.
The CRC regulations state, “Ingestible forms … shall only include syrups, pills, tablets, capsules, and chewable forms.” This measure has already been approved by the panel.
CRC Executive Director Jeff Brown has stated that some gummies would be allowed under the new regulations. This includes the soft lozenges already available at the state’s medical marijuana dispensaries.
At this point, there is no timeline as to when additional regulations for food-related items for consumers will be issued. However, when the time comes, we can expect the CRC to issue waivers to manufacturers.
New Jersey Still Developing Standards for Workplace Marijuana Testing
The NJ Cannabis Regulatory Commission has made some rules. However, at this point, they have not addressed workplace marijuana testing standards.
The Commission released a 160-page Personal-Use Cannabis Rules that address the cannabis space. But this does not touch upon employer drug testing. This set of rules does temporarily waive CREAMMA’s “physical examination” demands until the Commission “develops standards for a Workplace Impairment Recognition Expert certification.”
For now, employers do not have to physically evaluate employees for drug testing purposes.
NJ CRC Pauses Physical Evaluation Requirement for Drug Testing
The latest alert from the NJ CRC involves new employment protections offered by CREAMMA for employees and job applicants who are legally allowed to use marijuana off-duty.
CREAMMA also preserved employers the right to drug test their workforce. However, there’s a new requirement: testing for suspected cannabis use must include a physical evaluation to check the employee’s level of impairment while performing job duties. This will have to be conducted by someone certified to gauge a person’s state of impairment.
These employment protections under CREAMMA have been enforceable since August 19, 2021. This was when the NJ CRC issued its first set of Personal Use Cannabis Rules. These rules are outlined below.
Commission Approves Specially Adopted Personal Use Cannabis Rules
On August 19, 2021, the Commission approved Specially Adopted Personal Use Cannabis Rules. These rules will remain in effect for at least one year.
Through these rules, New Jersey’s recreational cannabis industry has been established. The CRC can start licensing cannabis businesses while these rules promote social equity, safety, and accessible cannabis as it allows municipalities to remain in control of how cannabis businesses can operate in their jurisdiction.
Cannabis Business Licensing in New Jersey
These new rules allocate different license classes to each stage of the state’s cannabis supply chain. The classes include delivery services, distributors, retailers, manufacturers, and cultivators.
Furthermore, these rules establish a microbusiness license for each license class. This license is for cannabis businesses that do not have more than ten employees and operate at a facility that does not exceed 2,500 square feet.
Small business ownership in the state’s recreational marijuana industry will flourish as the Commission has not limited the number of microbusiness licenses available. Microbusiness license applications will receive priority over other cannabis business applications as the Commission continues the licensing process.
Microbusinesses will have to pay 50% of the license fee for their class. Through these rules, Alternative Treatment Centers licensed under the state’s medical cannabis law will be able to expand their operations to include recreational cannabis.
Furthermore, the Commission plans to limit how many cultivation licenses it will award over the two years from February 22, 2021 to 37. This includes expanded ATCs, but it does not include microbusiness cultivators. After the 24-month period, the Commission will decide if it will increase how many cultivators the state needs to meet the medical and recreational market demand.
New applicants can apply for a conditional license or an annual license. The conditional license applications will receive priority over annual license applications. For application purposes, business owners must show that they’ve made less than $200,000 the previous year or $400,000 if they’re filing jointly.
Initial/Annual License Fees
ATC Expansion Fees
Municipalities receive considerable control over shaping the cannabis space within their jurisdiction. They can:
- Opt-out of the recreational cannabis program. With this rule, around half of all New Jersey towns have decided to refuse adult-use marijuana;
- Limit the number of specific types of businesses operating within their jurisdiction;
- Restrict cannabis businesses’ hours of operation and location. This includes using the law to ban legal cannabis businesses in school zones and setting restrictions regarding how far these operations must be away from playgrounds and places of worship;
- Set local licensing requirements and civil penalties;
- Limit the kinds of cultivation that are allowed within the municipality. One example is that some municipalities might use the bill to demand all cultivation occur indoors;
- Place a 2% transfer tax on marijuana and marijuana products a business transfers within the jurisdiction; and
- Communicate municipality preferences regarding licensure to the Commission.
- Limit cannabis delivery within their jurisdiction; or
- Limit cannabis transports routed through their jurisdiction.
Through the recreational legalization bill, social equity becomes the focus. The state regulations increase opportunities for people who have been significantly impacted by the War on Drugs by designating three types of priority licenses.
The marijuana bill incorporates industry licenses that aim to increase the following:
- Social equity businesses,
- Diversely-owned businesses, and
- Impact zone businesses.
Here’s a bit about each.
Social Equity Businesses
The regulations define a social equity business as follows. To qualify, the majority of the ownership interest must be held by someone who has resided in an economically disadvantaged region for five of the past ten years and whose household income is 80% or less of New Jersey’s average median household income. The second method is to have a person or persons who have been convicted of at least one marijuana-related offense.
A company is listed as “diversely-owned” if the majority of the ownership interest is held by people who are minorities, women, or disabled veterans. The term “diversely-owned business” also applies to businesses with minority, female, and disabled veteran management and operational control. These operations must be controlled by at least one of these types of owners to qualify as diverse.
Impact Zone Businesses
An impact zone is a municipality with a significant population that, as a result of previous criminal cannabis enterprises, contributes to higher levels of law enforcement activity, unemployment, and poverty. A business in an impact zone is controlled by someone who resides in an impact zone and has lived there for at least three consecutive years before the date of application.
Garden State Cannabis News Updates
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Considering scaling your operation in NJ? Let Northstar lead the way.
Contact us now to learn how our financial services will grow your endeavor in this budding space!