New Jersey entrepreneurs continue to lobby for legalizing the billion-dollar legal weed industry—a major component of the platform on which Governor Phil Murphy campaigned in 2017. Legislators have successfully passed the medical marijuana bill which expands access to medical marijuana and allows thousands of qualified users an alternative treatment for intense pain and debilitating medical symptoms to regain more control over their lives.
In June, Illinois became the 11th state to legalize adult-use marijuana, just a few short months after New Jersey failed to legalize its own program. According to Marijuana Business Daily, there are several reasons why New Jersey did not succeed in approving its use.
- NJ leaders felt that only investors would benefit, and lawmakers struggled over tax rates, revenues, and allocation.
- The NJ legislature would need to put forth a ballot initiative to legalize adult-use recreational cannabis as a constitutional amendment, not a new law. Some experts fear that without detailed information about how to administer the program, a ballot initiative might fail.
While the legalization of recreational adult-use marijuana has again been defeated in New Jersey, the legislature has moved forward with medical cannabis reform to expand access and enable more people to participate in the program. In May 2019, the NJ State Assembly voted to approve expanding the state’s medical marijuana program. More than 46,500 NJ patients have qualifying medical conditions—more than double the number of patients from just one year ago. The new law:
- Overhauls the state’s medical marijuana program
- Adds dozens of medical marijuana providers to increase capacity from the six providers currently in operation
- Relaxes rules that govern how much patients can purchase, from 2 ounces to 3 ounces over 18 months—however, those with terminal illnesses have no set limit
- Reduces the number of required doctor visits from four times to once a year
- Ends the 6.625% state tax charged on medical marijuana purchases by 2022
- Enables institutions including hospices and nursing homes to act as conduits between patients and dispensaries
- Permits home delivery
- Grants permission to out-of-state medical marijuana patients to buy cannabis while in New Jersey for up to six months
- Allows municipalities that host dispensaries to impose a maximum tax of 2% on the business
- Has set a goal of awarding 15% of licenses to women, disabled people, and veterans and 15% of licenses to minority owners
New Jersey legislators continue to advance its medical marijuana program. A July 2019 announcement indicated that the state plans to issue up to 108 additional medical marijuana licenses—a number based on the state health department’s market assessment. The state health department says the plan will offer up to 54 separate dispensary licenses, 30 processing permits, and 23 cultivation licenses—including three tiers of grower permits. The state specified geographic makeup of the licenses:
- Up to 38 in the state’s northern region
- Up to 38 in the state’s central region
- Up to 32 in the state’s southern region
An August 8 article stated that NJ lawmakers continue to push to legalizing recreational marijuana; however, these lawmakers would prefer to do so through legislation rather than voter referendum, which would facilitate an easier path to shaping and regulating this new marijuana industry.
According to the New Jersey Cannabusiness Association (NJCBA), the state’s first and largest cannabis trade organization, an estimated 12,232 NJ residents have been charged with cannabis possession (that’s 88 people a day, on average), since legalization stalled in March of 2019. The expungement bill (A4498) voted into law earlier this summer will enable many New Jersey citizens an opportunity to achieve a clean slate—removing small pot convictions up to 10 years from the date they were released, completed probation, or ended parole—to clear a path for employment, home ownership, and loan qualification. Currently, the state only clears about 10,000 convictions annually.
Both NJCBA as well as the New Jersey Cannabis Industry Association (NJCIA) are working to promote education and public safety about using cannabis legally. NJCIA also educates NJ state legislators and decision makers to encourage the development of sensible regulation and policy. The number of medical marijuana (MMJ) patients currently exceeds 46,500.
Meanwhile, Gov. Murphy has said that he would be “all in” for a push by legislative leadership to approve a bill that legalizes adult-use recreational marijuana by the end of 2019 in lieu of waiting for a ballot initiative during the 2020 election. Legislature must either approve the question by a three-fifths majority or simple majorities in back-to-back years to add a voter referendum to the ballot.
Waiting for a referendum in the 2020 election would push legal use back to 2021. This delay could result in neighboring states like Pennsylvania and New York getting a jump on New Jersey. While recreational marijuana use remains illegal, thousands of people will be arrested for minor possession and usage offenses. In 2017 alone, New Jersey arrested over 34,500 people for marijuana possession and 3,122 people for pot sales—a rate that’s more than double the national average.
Meanwhile, the U.S. House of Representatives moved forward with another step to provide mainstream financial services for marijuana companies. This incremental win for the marijuana industry includes a provision in a draft spending bill to bar federal regulators from penalizing banks that work with marijuana businesses. However, the provisions—if approved—are temporary and would need renewal in another spending bill in 2020. These provisions would provide narrower protections than the SAFE Banking Act. It would not protect bankers from possible enforcement by the U.S. Department of Justice—only regulators like the Treasury Department.