By:  Cristina N. Hyde, JD

After New Jersey’s citizens approved a constitutional amendment legalizing the adult use of cannabis last November, attention shifted to the state legislature to create enabling regulations in order to implement the referendum. The legislation, known as the “NJ Cannabis Regulatory, Enforcement Assistance, and Marketplace Modernization Act“ was passed by both the Senate and Assembly last December.  However, the Act still has not received gubernatorial approval as the debate over appropriate penalties for underage marijuana users found in possession of the drug continues.

The bill concerns the development, regulation and enforcement of activities associated with adult personal use cannabis products and provides criminal justice reforms for several offenses associated with the substance. However, Until A.21/S.21 is signed by Governor Murphy, personal use of marijuana in New Jersey is still technically illegal.

Once the bill is signed into law, a proposed Cannabis Regulatory Commission (CRC), charged with the oversight of recreational sales, is required to adopt initial rules and regulations within 180 days or within 45 days of the appointment of all five member of the commission, whichever is later. Until then, here are some details of what we know:

• Marijuana users over 21 years old may possess up to 6 ounces of legal marijuana. However, the smoking, vaping, or aerosolizing of a cannabis item would be prohibited in any place pursuant to law that prohibits smoking and any “indoor public place” except for designated “consumption areas.”
• The legislation provides for six “marketplace” classes of licensed businesses: cultivator, manufacturer, wholesaler, distributor, retailer, and delivery.
• Except for an initial period where cultivator licenses will be capped, the CRC will determine the maximum number of licenses for each class based on market demand and be authorized to accept new applications to meet that demand.
• The CRC will consider applications pursuant to a “point scale.” Among the considerations included an applicant’s operating plan, environmental plan, and safety and security plan.
• A location for any location-based licensed (i.e. retailor) will be required prior to submission of a retailer application.  It will be important to have any proposed lease for a retail location reviewed extensively to ensure (i) the landlord is fully aware that the location will be used for marijuana retail and (ii) there are cancellation provisions for the tenant if the application is denied.
• Existing Medical Marijuana operators will be permitted an adult-use license and will be given appropriate classification.
• Microbusinesses will receive special consideration with a number of licenses specifically reserved for them, alone.
• Priority consideration will be given to minorities, women and disabled veterans.
• Priority consideration will be given to in-state residents meeting certain criteria, and applicants from economically hard-hit communities or those impacted by the war on drugs (i.e., “impact zones”).
• The Act deems all past prohibitions by municipalities “null and void.” A municipality will have 180 days from enactment to prohibit adult-use businesses, but may not ban delivery services to the area.  Municipalities will have the option to determine how many licensed businesses to permit.  We do anticipate all municipalities that had previously passed a ban will do so again in short order once the law is signed.
• In addition to a 7% sales tax, the CRC may levy a “social equity excise fee” on growers; meant to address areas most negatively affected by anti-marijuana laws.
• The legislation specifically protects employees who engage in off-work marijuana use from adverse employment actions based on that use. However, there are circumstances where an employer may require an employee to undergo a drug test upon reasonable suspicion of an employees usage while working or signs of intoxication related to marijuana use, or following a work-related accident that is subject to investigation.
• An employer is generally not required to alter their policies and efforts to maintain a drug-free workplace and is not required to accommodate the use of legal marijuana by employees while at work.

Until implementing regulations are finalized, we expect it will be difficult to truly understand the impact of A.21 on drug-free workplace policies.  Campanella Law Office continues to monitor the progress of this legislation.  Please Contact Us if you have are interested in developing a legal marijuana business or if you have any concerns related to how this might affect your current employees or current business.