Cannabis legislation week

Hello everyone!

We’re making our newsletter free in the weeks leading up to our Oct. 12 event in Newark, which has a lineup including New Jersey cannabis regulators, an owner of the nation’s first Black-owned dispensary and more.

Tickets sell out fast, so click here to attend and feel free to read the details below.

In this issue, we go through a couple of pieces of legislation that passed on the federal and local level that deal with access to capital, in addition to a guest column about the importance of expanded medical cannabis access.

Also, speaking of access to capital, the New Jersey Economic Development Authority just announced it’s going to reveal its grant applicants Oct. 3. so keep an eye out for that as well. Details are inside.

As always, I hope you enjoy the issue.

Take care and until next time…

— Jelani Gibson

Bill easing investment restrictions passes to simultaneous celebration and caution

Gov. Phil Murphy signed a bill that allows more investment into cannabis businesses. Feedback was gathered throughout the week which resulted in some interesting exchanges, some of which were gathered through a social media callout.

According to legislation, the bill’s latest text says it would allow investors to “own up to a 35 percent interest in up to seven entities that have been issued a Class 5 cannabis retailer license, provided that each such retailer is a certified minority or women’s business or a disabled-veterans’ business.”

In Q&A format we’ve assembled answers from cannabis attorneys Mollie Lustig of McLaughlin & Stern and Beau Huch from Porzio, Bromberg & Newman for their respective takes. Huch’s comments come from a conversation with him on LinkedIn, and Lustig’s comments come from a separate interview that was held.

Q: What’s the benefits here and what are some of the components people might not be thrilled about? Also, I see mention of diversely owned businesses. Would this also apply to social equity businesses (businesses owned by people who have lived in an economically disadvantaged area of the state, or who have convictions for cannabis-related offenses)?

Huch: It’s not a perfect bill and I don’t think anyone is thrilled about every component. That’s a good compromise. This will create new investment opportunities and save a lot of people from losing their shirts.

It doesn’t apply to social equity or impact zone businesses. That understandingly rubbed some folks the wrong way. It’s a double edged sword to a degree because some camps seemed to express concern that this bill created too much opportunity for MSO’s (multi state operators) to come in and gobble up businesses. I could see supplemental legislation permitting those classes.

When this moved, it moved quickly in the legislature and I could see that omission as an oversight as to intent. The other issue was that percent. It’s arguably high for one investor.

[On the 35 percent] I personally think it’s a good number to land on, but I’d love to know where it came from. I also get nervous whenever there’s so much discretion in determining reasonableness to a regulator. I like bright lines. What’s permitted today may not be permitted tomorrow, what’s good for one applicant may not be permitted for another.

Lustig: For the good operators and for the clients that need it, yes, it’s a good thing. For the market overall, I don’t know.

On the one hand we’ve got social equity as the highest prioritization, yet if this is intended to be helpful for businesses, we’re only affording it to minority and disabled veteran businesses? That doesn’t make sense to me either.

It might give them (diversely owned and veteran businesses) more opportunity for financing. It might open up their options for equity-based deals where most of them have been debt-based deals where they are are borrowing money and they’ve got to pay it back. This [legislation] is a little different and defines the parameters more.

— Jelani Gibson

SAFER Banking Act makes it out committee amidst prospect of congressional shutdown

The SAFER Banking Act, a bill that’s been marketed by its proponents as something that will make it easier for business operators to access banking services, made it out of a Senate Committee this week.

One of the primary hurdles for New Jersey cannabis operators is access to capital. This bill could have large ramifications on how the state’s market plays out. Whom that capital is made available to and who it isn’t, is also the subject of robust debate in the Garden State.

Here’s the multiple sides of what people are saying about the SAFER Banking Act, along with some of the factors, support and criticisms behind it.

Support

Minority Cannabis Business Association (MCBA) President Kaliko Castille noted the inclusion of Community Development Financial Institutions as a step forward.

CDFI’s are financial institutions that have a focus on bringing financial services to underserved communities.

“After years of dedicated advocacy work, our efforts have culminated in the inclusion of Community Development Financial Institutions (CDFIs) in the SAFE Banking Act,” he said. “CDFIs, with their record of lending to minority communities, can play a vital role in fostering diversity and equity in the cannabis industry by aiding minority entrepreneurs who have long struggled to secure capital.”

Criticisms

While the bill has been primarily pushed by Democrats, there was not unanimous agreement.

U.S. Sen. Raphael Warnock (D-GA) voiced vehement disagreement during the voting session in the Senate Banking Committee. Warnock raised concerns that the bill would consolidate control of larger operators at the expense of smaller businesses — a criticism that had similar lines of concern with New Jersey’s recent legislation.

Additional legislation

Senate Majority Leader Chuck Schumer has said he would pair the legislation with provisions from the HOPE Act, which promises to provide funding to states for technical assistance around expungement programs, and the GRAM Act, which promises to protect the gun rights of cannabis users.

While expungement programs have been made a part of state cannabis legalization efforts, the expungements have been waylaid by tech issues and administrative holdups with systems that do not communicate with one another, resulting in a bureaucratic quagmire for many expungement applicants.

Observers in the cannabis industry say that New Jersey has been no exception to that national trend.

Funding would be used for some of the following:

• Technology to provide cost-effective legal relief at scale;
• Automating the process of expunging convictions for cannabis offenses;
• Clinics, including legal clinics, that assist individuals through the expungement process
• Implementing a notification process for those whose records are expunged as well as to publish publicly accessible information regarding the availability and process of expungement
• Sealing records of conviction for cannabis offenses if appropriate
• Partnerships to provide wide-scale relief to individuals who are eligible for the expungement of a conviction for a cannabis offense under the laws of the State.

Caveats

The government is headed for a potential shutdown and it also has to head to the Senate floor for a full vote. After that, the House of Representatives will have a say as well, where its speaker, Kevin McCarthy, is currently under siege by his own party. Needless to say, the political rodeo is far from over.

— Jelani Gibson

Homegrow and expanded medical access needs to happen — A letter to the Governor

By Ken Wolski, executive director for the Coalition for Medical Marijuana — New Jersey

The Coalition for Medical Marijuana — New Jersey, Inc. (CMMNJ) is grateful for your support of marijuana reform in New Jersey. Legalizing and regulating marijuana is transforming the state in a positive way.

The emerging cannabis industry is progressing at a reasonable pace for a tightly regulated industry, and most importantly, it has social equity and restorative justice at its foundation.

The medicinal cannabis program has eased and expanded access greatly since you became governor. However, too many patients in New Jersey are still without access to medical cannabis. These patients need it, qualify for it, and would be healthier with it.

An important way to ensure the availability of medicinal cannabis to the many impoverished patients in the state is through insurance coverage. There are currently three bills in the State Senate, with identical bills in the Assembly, that propose various forms of insurance coverage for medicinal cannabis.

One bill, S313, passed unanimously from the Senate Health Committee over a year and a half ago. The identical bill, A3248, passed 10-2 out of the Assembly Health Committee. Both bills are now idle in other committees, with no hearings scheduled. These bills need your support, Governor Murphy. A list of the other insurance bills is below.

Medical cannabis Insurance bills:

• S313/A3248: Costs of medical cannabis to be reimbursed by Catastrophic Illness in Children Relief Fund, PAAD, Senior Gold and VCCO.
• S309/A3511: Requires workers’ compensation, PIP, and health insurance coverage.
• S782/A3932: Subsidizes medical cannabis in Medicaid or NJ Family Care.

Home cultivation bills:

• S342/A997: Authorizes home cultivation of medical cannabis.
• A1422: Legalizes possession of six marijuana plants for personal use.
• S353/A3657: Legalizes six plants for personal use and 10 plants for medical uses.

Hospital and institutional access are other important considerations in creating a more complete medicinal cannabis program in this state. Right now, hospitalized patients must stop using their medical cannabis as it is not administered in any hospital in New Jersey.

This can cause much suffering. Patients who have recovered from opioid addiction are now forced to resume opioid treatment after various surgical procedures. Even worse, seizure patients whose conditions are stabilized with medicinal cannabis risk permanent injury and even death when their anticonvulsant medicine is discontinued because of a hospital admission.

I have worked as a registered nurse (RN) in a state psychiatric hospital and in the state prison system for 25 years. I have seen many patients in these institutions who qualify for medicinal cannabis, and whose lives would be improved with this therapy. Moreover, the costs associated with health care in all state institutions would be reduced if this therapy were available to qualifying patients.

Cannabis treats multiple conditions, thus requiring fewer pharmaceutical drugs, with their potential for adverse effects. Use of cannabis can also create more stable medical conditions that require fewer emergency treatments, hospitalizations, and surgical procedures.

The staff in these facilities are already trained to administer and account for controlled substances. The State simply needs to develop policies and procedures to administer oral forms of medicinal cannabis to the patients in its care who qualify for it.

Finally, home cultivation is an important consideration for patient access. This can ensure the availability of specific strains of cannabis that are most effective for a patient’s medical condition(s), at an affordable price. Home cultivation for patients can be tightly regulated, as it is in multiple other states, and it has minimal impact on the emerging industry. Garden State patients need the option to grow their own.

Gov. Murphy, CMMNJ is celebrating its 20th anniversary this year. In 2021 and in 2023, the New Jersey State Governor’s Volunteerism Awards acknowledged CMMNJ’s “extraordinary service to your community.”

This year, the New Jersey Senate and General Assembly issued a Joint Legislative Resolution that read, in part, “The strength and prosperity of the State of New Jersey and the effectiveness of our American society greatly depend upon public spirited individuals, exemplified by the leaders and members of CMMNJ, who devote their time and energies to improve the quality of life for their fellow citizens.”

With your help CMMNJ can continue its mission to ensure access to medicinal cannabis to all New Jersey patients who qualify.

NJEDA to announce winners of grant

The New Jersey Economic Development Authority (NJEDA) will host a press conference to announce new Cannabis Equity Grant awardees Oct. 3 at 10 a.m. The event will take place at NightJar, a local Latina-owned business.

Joining NJEDA will be Bloomfield mayor Michael J. Venezia; representatives from the New Jersey Business Action Center (NJBAC) and representatives from the New Jersey Cannabis Regulatory Commission (NJCRC).

N.J.’s top cannabis business conference, networking event is Oct. 12. Speakers, topics, how to buy tickets

The state’s Cannabis Regulatory Commission will begin accepting applications for wholesaler, distributor and delivery services next week.

“The launch of these new cannabis business license classes represents a significant step in the continued growth and diversification of New Jersey’s cannabis industry,” said CRC Chairwoman Dianna Houenou said in a recent announcement.

Houneou will be among the featured speakers at NJ Cannabis Insider’s Oct. 12 conference from 9 a.m.-5 p.m. at the DoubleTree by Hilton Hotel Newark Airport, where she and other government officials will discuss the best ways to get licenses approved, among other actionable information.

For its second conference of the year, the NJCI fall event will feature a keynote from one of the country’s pioneers in the space, Wanda James. Register here.

Among other government officials joining Houenou will be:

• Wesley McWhite III, CRC director of Diversity, Equity and Inclusion
• Tauhid Chappell, NJ Business Action Center (NJBAC), Cannabis Training Academy
• Genna Jones, program manager at New Jersey Economic Development Authority (NJEDA)
• Donald Newman, manager of Small Business Advocacy, NJBAC

Other key discussions include:

• The Road to License Approval Is Never a Straight Line
• Wholesale, Distribution & Delivery: Following the Road to Success
• Manufacturing & Edibles: Expansion is Here. Infusion Demonstration
• Cultivation: Essentials of Growing Indoors and Outdoors

Another important conversation will be:

Municipalities: Talk to The Mayor and Council President: Insights on Municipal Approval, featuring:

• Ron Mondello, municipal attorney at Ronald P. Mondello, Esq.
• Adrian O. Mapp, mayor of City of Plainfield
• Joyce E. Watterman, Jersey City Council President

To learn about the full lineup, read the full article here.

For cannabis recruitment solutions please contact Deneen Wright, dwright@njadvancemedia.com or call 201-324-5092.