High Times in the Garden State

During this decade, there has been a trend to legalize the sale and use of marijuana and other cannabis products Nationwide. A total of twenty-nine States, plus the District of Columbia, have some form of legalization either for outright recreational use or for medical purposes. New Jersey is among the States allowing the sale and use of medical marijuana.

Our State is now heading towards legalizing marijuana for recreational use. Legislation has been drafted and Governor-Elect Phil Murphy has gone on the record to make legalization a 2018 priority.

It is expected that a proposed law will be advanced by the State Legislature as soon

as January 1, 2018 (as discussed below it is already written). Based on the track records of other States allowing recreational marijuana, implementation could take between 1-2 years.

N.J. Law Coming

The draft legislation was introduced in May 2017 under State Senate Bill number 3195, by Senator Nicholas P. Scutari. The bill calls for the legalization of the possession of one ounce or less of marijuana for transfer or personal use. Use in public is prohibited. It also implements a set of rules to allow manufacturing, cultivation, transportation and retail sales. Sales or usage by those under 21 years old is strictly prohibited.

A new division, the Division of Marijuana Enforcement, is envisioned to regulate marijuana activities; grant and/or revoke licenses; investigate and prosecute violations; adopt rules and regulations to carry out the intent of the act; and to seize marijuana items to ensure compliance. The rules must address a number of matters, especially as it relates to license qualifications; location and number of facilities; goals for minority and female owned businesses; security requirements; packaging, branding and advertising rules; hiring guidelines; hours of operation and inspection procedures. The commission, via the newly created rules, is also responsible for determining the number of marijuana retailers who may be licensed (at least one per County is mandated).

Taxation

Taxation is also a critical component of the bill. It is projected that the New Jersey marijuana industry will create annual revenues exceeding $1 billion. Excise taxes, over time will be set at 25 percent and are expected to generate hundreds of millions of dollars. There will be strict accounting measures requiring monthly lings to the Division of Taxation.

There are a variety of other provisions including:

  • A tracking system requirement to inventory all cannabis products;
  • Annual Licensure and Renewal Fees;
  • Prohibiting discriminatory hiring practices against marijuana users;
  • Requirements for municipalities to immediately adopt ordinances addressing time, place and manner parameters.

In all, the Legislation appears on track and represents a dramatic change in policy. It will be interesting, to say the least, to follow this developing law as it blossoms into maturity.

 

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