This article originally appeared on Scarinci Hollenbeck’s blog.
Below is a brief summary of certain highlights within the latest version of Senate Bill 2703, the cannabis legalization bill sponsored by Senator Scutari and Senator Sweeney, as revised by the New Jersey Senate Judiciary Committee:
- Licenses: Four licenses will be offered: cultivator, processors, wholesaler, and retailer. For a period of 18 months after the date that regulations are adopted, retailers cannot participate in cultivation, processing, or wholesaling.
- Regulatory Oversight: A five-member “Cannabis Regulatory Commission” (CRC) will be established in but not of the NJDOH, and will oversee the development, regulation, and enforcement of activities associated with the adult use cannabis industry as well as the development, expansion, regulation, and enforcement of New Jersey’s medical cannabis program. The CRC will decide how many of each type of license to issue, create and adopt industry regulations, manage the license application process, review and make decisions regarding applications, and oversee compliance of industry members.
- Residency Requirement: License applicants are required to involve a “significantly involved person” who has resided in New Jersey for at least two years as of the date of their application.
Tax Rate: The tax rate on cannabis sales will be set at 10% (not escalating as in prior iterations of the bill), which would be the lowest rate in the country.
- Municipal Taxes: Municipalities will be empowered to directly assess, collect and retain a 2% tax on sales occurring within their boundaries.
- Priority to Minority, Disabled Veteran, and Women-Owned Applicants: An “Office of Minority, Disabled Veterans, and Women Cannabis Business Development” will be established within the CRC to support the goal of issuing 25% of licenses to businesses owned by members of these groups.
- Social Impact Zones: The bill sets a goal of issuing 25% of licenses to applicants who have lived for at least three years in towns with unemployment rates in the top 10% of the state.
- Micro-Licenses: At least 10% of all licenses will be micro-licenses issued to small-scale businesses.Delivery: Retailers may apply to deliver cannabis items and supplies to consumers.
Onsite consumption: Retailers may apply to have a consumption area on premises.
- Home Grow: The bill does not allow New Jersey residents to grow their own cannabis.
- Expungement: The bill does not call for automatic expungement of prior low-level cannabis offenses, but calls for a certain percentage of industry tax revenue to be dedicated to financial assistance for those who submit expungement applications to the State via the courts.
Governor Murphy, Senator Scutari and Senator Sweeney have previously sought to schedule a vote on Senate Bill 2703 in September, but ongoing negotiations regarding the tax provisions of the bill will likely delay any vote until October. Regardless of the timing, this iteration of the recreational marijuana legalization bill appears to be close to what the final product will look like.
The Scarinci Hollenbeck Cannabis Law Practice group will be continuously tracking the status of Senate Bill 2703. We encourage current and prospective members of the New Jersey cannabis industry to check back regularly for updates.
Dan McKillop leads Scarinci Hollenbeck’s Cannabis Law practice group, which is comprised of attorneys from several of the firm’s practices. Dan has represented entities seeking to obtain medical cannabis dispensary licenses and he has a thorough knowledge of current Federal and state medical and adult-use cannabis law and proposed cannabis legislation. Dan regularly authors articles and presents at business events regarding the emerging cannabis industry, and he is a member of the New Jersey CannaBusiness Association and an Editor of the Cannabis Law Journal.