Attorneys

Client Alert: Municipalities’ Implementation Of CREAMMA
What You Need To Know

Ansell Grimm June 15, 2021

Q. When do we need to decide whether to opt in or out?
A. Municipalities have 180 days from the effective date (February 22, 2021) of the New Jersey Cannabis Regulatory, Enforcement Assistance, and Marketplace Modernization Act (CREAMMA) to opt-out of specific cannabis license Classes, or by August 21, 2021.

Q. What happens if we do not make a decision before the opt-out deadline?
A. If no action is taken, Class 5 license activity (cannabis retailers) will be a conditional use in all commercial zones or retail zones and Class 1, 2, 3, 4, and 6 license activities (cultivator, manufacturer, wholesaler, distributor, & delivery respectively) will be permitted uses in all industrial zones. In effect, taking no action equates to opting-in.

Q. Can we choose to opt-out of specific license Classes?
A. Yes. A municipality may prohibit the operation of any one or more license Classes. However, the license Class(es) you do permit will fall under the default zoning requirements without additional municipal action.

Q. Can we prohibit adult-use cannabis establishments if we already have an Alternative Treatment Center dispensary in our municipality.
A. Yes. However, a prohibition ordinance could impact the Alternative Treatment Center’s ability to participate in the adult-use cannabis market depending on the license Class(es) you prohibit in the ordinance.

Q. Can we limit the number of licenses of a particular Class?
A. Yes. Municipalities can restrict the number of available licenses for each Class of license permitted in the Municipality.

Q. What sort of distance requirements can we place on cannabis licenses?
A. You can require that cannabis licenses be minimum distances from places like schools, houses of worship, childcare facilities, substance rehabilitation facilities, etc. You can tailor the requirements by cannabis license class or location, requiring licensees maintain a certain distance. You can also require that cannabis licensees be a minimum distance from other cannabis licensees and specify by license class.

Q. Can we regulate the signage/store front of a cannabis licensee?
A. Yes. You can regulate a cannabis establishment’s signage as you would any other business in your municipality.

Q. Can we create a local licensing process for potential licensees?
A. Yes. Municipalities can impose their own local licensing requirements as part of the restrictions on the number of cannabis licenses.

Q. Can we make state licensure a requirement for municipal approval?
A. No. CREAMMA dictates that a municipality shall notify the Cannabis Regulatory Commission that it either approves or denies each application forwarded to it. Therefore, municipal approval is a prerequisite to receiving a state license from the Commission.

Ansell Grimm & Aaron Round Up: June 2021

Ansell Grimm June 3, 2021

AGA Secures Dismissal Of Nationwide Class Action

Ansell Grimm & Aaron attorneys Joshua S. Bauchner and Anthony J. D’Artiglio obtained dismissal of a putative, nationwide class action for lack of subject matter jurisdiction in New Jersey federal district court. The case, Cindy Adam v. Frank V. Barone, et al., Civ. A. No.: 3:20-cv-10321-MAS-LHG, concerned claims alleging that Defendants violated various California and Federal consumer protection statutes through their online sale of natural beauty products, including seeking to certify a nationwide class alleging violations of over 40 different States’ consumer protection statutes. Following Ansell Grimm & Aaron successfully securing a transfer of the case from the Northern District of California to the District of New Jersey, Defendants filed a Motion to Dismiss arguing, among other things, that a pre-litigation offer of a full refund for the purchased products made in the ordinary course of business mooted plaintiff’s claims and divested the Court of subject matter jurisdiction.

The Court rejected plaintiff’s argument that the U.S. Supreme Court’s decision in Campbell-Ewald Co. v. Gomez, did not moot the claims because, in that case, the Supreme Court held that an unaccepted offer of judgment or an unaccepted settlement offer could not defeat subject matter jurisdiction. Ansell Grimm & Aaron explained that Campbell-Ewald does not apply because a pre-litigation, ordinary course offer of a refund is not a “settlement offer” – a bright-line distinction between pre-litigation refunds and post-litigation settlements. The Court agreed explaining that it was declining “to extend Campbell-Ewald as Plaintiff suggests, where a refund was offered in the ordinary course of business by a representative of the company during a phone call with a customer.” As a result, the offer of a refund mooted Plaintiff’s claims such that there was no “case or controversy” permitting Article III subject matter jurisdiction for the Court. By securing dismissal at the pleading stage, Ansell Grimm & Aaron saved its clients substantial time and expense which otherwise would have been wasted defending a meritless, nationwide class action.

Ansell, Grimm & Aaron attorneys regularly engage in class action defense arising from frivolous claims and seek to obtain a similarly quick and cost-effective result for our clients. Of course, some matters do have merit, in which case our attorneys work to narrow the claims or class towards minimizing damages and obtaining a favorable settlement.

For additional information on Ansell Grimm & Aaron’s class action practice, please contact Joshua S. Bauchner, Esq . (jb@62q.f7d.myftpupload.com) or Anthony D’Artiglio, Esq. (ajd@62q.f7d.myftpupload.com) at (973) 247-9000.

AGA Attorney Testifies Before State Cannabis Regulatory Commission

Ansell Grimm & Aaron attorney Zachary L. Windham testified before the Cannabis Regulatory Commission on June 1, 2021. His testimony concerned whether limitations should be imposed on the potency of concentrates and edibles that will be sold in New Jersey marijuana dispensaries. Zachary explained: “The path of least resistance from a consumer standpoint would be to purchase all of their cannabis products from the unregulated supplier, who could provide them with a wider variety of product types.” Accordingly, Zachary recommended against restrictions favoring effective labeling and consumer education. Media coverage concerning his testimony is available here.

Our dedicated Cannabis Law Practice Group stands ready to assist applicants with ensuring they are prepared when the Request for Applications is issued for adult use cannabis, as well as for additional medical licenses. Please contact Joshua S. Bauchner, Esq. (jb@62q.f7d.myftpupload.com) or Zachary L. Windham, Esq. (zlw@62q.f7d.myftpupload.com) at (973) 247-9000 to get started today.

George A. McGowan III Joins AGA As Corporate Attorney

George A. McGowan, III, joined as counsel with the firm. His practice is concentrated in areas of corporate and commercial law (both public and private companies), technology, and transactional matters including Mergers and Acquisitions, Trusts and Estates, Financing and Real Estate. His client roster includes a major data center, a streaming media company, several international manufacturing companies, professional practices, and closely held businesses. Mr. McGowan brings our clients both his private practice expertise with Fortune 500 Company knowledge and experience.

He is a graduate of Manhattan College with a Bachelor’s of Science in two majors, Finance and Marketing. He graduated from Seton Hall University School of Law with a J.D. He clerked for the Honorable Patrick McGann, in the Chancery-General Equity Court in Monmouth County. He is admitted to practice in the State of New Jersey and its Federal Courts.

Nicholas J. Falcone Joins AGA As Counsel In The Land Use Department

Nicholas J. Falcone is counsel to the firm with the concentration of his practice relating to zoning and land use, and the representation of clients in all phases of governmental approvals for site plans, subdivisions and variances before municipal planning and zoning boards, as well as appeals therefrom. Before joining the firm Mr. Falcone represented planning boards and school districts in Monmouth County, as well as business statewide. Earlier, Mr. Falcone worked at the national law firms Fox Rothschild and the labor and employment boutique Grotta, Glassman and Hoffman, where his practice focused on labor and employment law, representing employers in state and federal courts in all aspects of civil litigation, administrative hearings, and provided HR counseling.

After law school graduation, Mr. Falcone was law clerk to the Honorable Martin L. Greenberg, Superior Court, Chancery Division: General Equity and Probate, and to Honorable Seymour Margulies and Honorable Fred J. Theemling, Jr., Superior Court, Civil Division, Hudson County, New Jersey. While in law school, Mr. Falcone worked as a law clerk at the firm of former U.S. District Court Judge Herbert J. Stern.

Mr. Falcone has had life long association with the arts. Prior to becoming an attorney, Mr. Falcone worked in the Broadway theater, including for the legendary director/producer Harold Prince, film and opera communities. Mr. Falcone served on Board of Directors of the Garden State Film Festival, 2009-2019, including as Chairman of the Board and Chairman and of the Programming Committee for the last six of those years.

Lunch & Learn: Social Equity in New Jersey and New York Cannabis Programs Video and Presentation

Ansell Grimm May 13, 2021

NJCBA VP Marianne Bays, Ph.D., hosted a special guest panel last week which discussed Social Equity in NJ & NY Cannabis Programs. They shared the attached presentation slides with their contact information and additional handouts on the topic.

Josh Bauchner, Partner/Head of Cannabis Law Practice, Ansell Grimm & Aaron, PC
Zachary Windham, Associate/Cannabis Law Practice, Ansell Grimm & Aaron, PC
Lisa Reid, Managing Director, Government Relations, Mercury LLC

The presentation was sponsored by Ansell Grimm & Aaron, PC; Inglesino, Webster, Wyciskala & Taylor; Burton Trent Public Affairs; and NJ Buzz Productions.

Below is a recording of the May 7th, 2021 Lunch & Learn Session along with the aforementioned presentation slides and handouts.

Cannabis Law Update

Ansell Grimm May 10, 2021

Adult-Use Licensing

Attention again turns toward applications and licensing as a result of the passage of adult-use legislation in February, the Cannabis Regulatory, Enforcement Assistance, and Marketplace Modernization Act (“CREAMMA”). The firm is working with a number of clients interested in pursuing one of six license types: cultivation, processing, wholesaling, distribution, delivery and dispensary.

In addition to standard licenses, the newly formed Cannabis Regulatory Commission (“CRC”) is also offering micro-licenses targeting New Jersey entrepreneurs. Microbusiness licenses will be restricted to residents who have lived in the State for at least two years and will limit the size and number of employees of the Microbusiness. However, there will be no limit on the number of Microbusiness licenses that can be issued. CREAMMA requires that a minimum of 10% of the licenses issued for each license type be issued to Microbusinesses, and that 25% of the total licenses issued be awarded to Microbusinesses. The Microbusiness classification is expected to expand the opportunity for New Jersey residents to participate in the industry by removing the need for such applicants to compete for a finite number of licenses.

Medical Marijuana Licensing

The pending applications for the 2018 and 2019 medical marijuana licenses were formally transferred from the Department of Health (“DOH”) to the CRC. As a result of a decision from the Appellate Division reversing and remanding the DOH’s 2018 scoring decisions, a number of appellants were permitted to resubmit their applications for additional review. That process remains underway and likely will take another 90-120 days, at least. Similarly, after the Appellate Division ruled on the 2019 appeal, the CRC is now scoring those applications and decisions are expected shortly. As demand continues to vastly exceed supply, and it can take a year or longer to start operations, we are hopeful that the CRC will act quickly in awarding the six vertically integrated licenses available under the 2018 RFA and the 34 licenses of various types available under the 2019 RFA.

Cannabis Regulatory Commission

The CRC got off to a quick start hosting a number of virtual meetings to introduce the six commissioners –Dianna Houenou – Chair of the CRC, and Commissioners Krista Nash, Maria Del Cid-Kosso, Sam Delgado, and Charles Barker — and to establish an agenda for the significant amount of work which lies ahead. Jeff Brown, who led the medical marijuana program under the DOH, came over as Executive Director of the CRC.

In support of that effort, Zachary Windham, who previously worked as the Legal & Financial Director for a Marijuana Business Operator with retail locations across the state of Colorado and recently joined the firm, submitted comments to the CRC concerning social equity issues, Minority and Women Business Enterprise (“MWBE”) point allocations, and the need to increase cultivation capacity in accord with the findings of the New Jersey Department of Health’s Biennial Report on the Medical Marijuana Industry, among other topics.

Zachary explained that there was a need to educate social equity applicants concerning the licensing process as the current 30 day window between issuance of the final rules and the application deadline was insufficient time to prepare a comprehensive application. He also recommended utilizing the State’s current MWBE designation as mechanism to allot additional points to social equity applicants, in the event there is insufficient opportunity for the CRC to create its own social equity designation. Finally, Zachary explained that the Biennial Report noted the need to increase cultivation capacity, and that 10% of the 37 cultivation licenses (i.e., four licenses) would be awarded to micro-businesses. However, as the micro-licenses are capped at 2,500 square foot canopy, it would only add 10,000 square feet of cultivation capacity. While a robust microbusiness sector is critical to ensuring social equity at the consumer level, we also need to increase supple to meet the demand of more than 106,000 registered patients in addition to the adult-use market.

NJSBA Annual Meeting and Chair Appointment

Joshua Bauchner will be presenting at the NJ State Bar Association’s Annual Meeting on Thursday, May 20, 2021. The virtual panel will provide an overview of CREAMMA addressing topics such as licensing, employment law, expungement and social justice issues, banking and business issues and more. Registration remains open here.

Josh also was appointed Chair of the NJSBA Cannabis Law Committee for the 2021-2022 term, along with his friend and colleague, Lisa Gora, Esq. of Wilentz Goldman & Spitzer, PA.

Lunch & Learn: Hear From NJ’s Cannabis Industry Players

Ansell Grimm May 6, 2021

Click Here to Register

Bauchner Quoted: What NJ Attorneys Are Saying About
Attorney General’s Cannabis Sentencing Directive
by Nick Muscavage

Ansell Grimm April 26, 2021

Law360 (April 23, 2021, 3:16 PM EDT) — The New Jersey Attorney General recently issued a directive instructing prosecutors across the state to waive mandatory minimum sentences for certain nonviolent drug offenses, advancing a key part of the governor’s criminal justice reform plan that has been “delayed and denied” for nearly two years, according to the governor.

State Attorney General Gurbir S. Grewal announced the directive on Monday that instructs prosecutors to waive mandatory parole disqualifiers — also known as mandatory minimum prison terms — for nonviolent drug offenses.

Directive 2021-4 will affect both current and past cases, according to Grewal.

For future cases, the initiative directs prosecutors to waive the mandatory minimum parole ineligibility terms associated with certain nonviolent drug offenses under New Jersey law. It also allows inmates who are currently in prison because of a mandatory minimum term for a nonviolent drug offense to request the waiver, requiring prosecutors to file a joint application to rescind the mandatory period of parole ineligibility so the modified sentence will be as if no mandatory minimum had been imposed.

According to Grewal, the directive “essentially takes the imposition of mandatory minimum terms ‘off the table’ for all current and future nonviolent drug defendants,” and also advances a 2019 recommendation from Gov. Phil Murphy’s Criminal Sentencing and Disposition Commission, which called for the elimination of all mandatory minimum terms for nonviolent drug crimes.

“It’s been nearly two years since I first joined with all 21 of our state’s county prosecutors to call for an end to mandatory minimum sentences for nonviolent drug crimes. It’s been more than a year since the governor’s bipartisan commission made the same recommendation,” Grewal said in a statement. “And yet New Jerseyans still remain behind bars for unnecessarily long drug sentences. This outdated policy is hurting our residents, and it’s disproportionately affecting our young men of color. We can wait no longer. It’s time to act.”

Murphy’s sentencing commission also led to legislation that would have implemented its sentencing recommendations, but the bill has remained stalled in committee in both houses of the Legislature.

Grewal’s directive requires prosecutors to waive the mandatory period of parole ineligibility for the following charges: leader of narcotics trafficking network; maintaining or operating a facility producing a controlled dangerous substance, or CDS; manufacturing, distributing, or dispensing CDS; employing a juvenile in a drug distribution scheme; distributing, dispensing, or possessing with intent to distribute CDS within 1,000 feet of a school; distribution of CDS to persons under age 18.

However, it still allows prosecutors to seek periods of additional parole ineligibility in nonviolent drug cases “when warranted to protect public safety based on the specific facts of the case,” according to Grewal.

To learn more about the attorney general’s latest criminal justice reform effort, Law360 Pulse spoke to attorneys and experts to hear what they think of the initiative and how it will play out in the Garden State.

Jennifer Sellitti
Director of training and communications for the New Jersey Office of the Public Defender

“We are pleased that the attorney general stepped in to provide the relief for nonviolent drug offenders that the sentencing commission unanimously agreed was critical to ending racial disparities in our prisons. It is no secret that drug sentences disproportionately impact Black and brown people in the state of New Jersey — so much so that New Jersey has the highest racial disparity in the nation when it comes to prison sentences. This measure goes a long way in eliminating those disparities.”

Murphy’s sentencing commission noted that Black residents count for 14% of New Jersey’s population, but account for 61% of its inmate population, and many are serving sentences for nonviolent drug offenses, Grewal’s directive noted.

Sellitti said the key to ending mass incarceration is recognizing who needs to be in prison in the first place.

“Overincarcerating people leads to all sorts of barriers like hiring discrimination, lost job and career opportunities, homelessness and weakening of familial ties. We hope this is a small step in ensuring that prison cells are reserved for only those who truly need to be behind bars and marks a return to a more holistic approach to punishment.”

Sellitti also said the attorney general’s directive is “far more complicated than legislation and will result in it taking much longer to modify sentences.”

“Had the legislation passed, all of the judgments of convictions would have been changed administratively by the New Jersey Department of Corrections. Because our law has not changed and still requires mandatory minimums for certain charges, each person serving a mandatory minimum will have to be brought to court, vacate their original guilty plea, have their sentence modified and then reenter their plea. This will be quite a time-consuming process, especially during the midst of a pandemic.”

“The other issue is that the guidelines give prosecutors discretion to ask for discretionary minimums. It also only applies to a small category of offenses — far less than the legislation. This means that the discretion remains with the prosecutor and does not return to judges. Giving power back to judges was the whole purpose of the legislation.”

Regardless, the attorney general’s directive is still a step in the right direction, she said.

“Real change comes when we move away from a system based on punishment and return to a system based on rehabilitation.”

Sarah Fajardo
Policy director for the American Civil Liberties Union of New Jersey

“The attorney general’s directive moves New Jersey’s sentencing away from the use of policies that have exploded mass incarceration rates, and driven New Jersey’s racial disparity rates in prison to the highest levels seen in the nation. By directing prosecutors to stop seeking minimum sentences for specific charges, discretion in sentencing is restored to the courts, and helps prevent prosecutorial pressure behind the scenes to accept hefty sentences. This will benefit thousands of people — more than 1,000 people will become immediately eligible for resentencing under this directive.”

Fajardo said research has shown that onerous, lengthy sentences do not support rehabilitation and, when people exit the prison system, they are in no better position than when they went in.

“Additionally, mandatory minimum sentences for nonviolent drug offenses have been a core tool in the U.S.’s unsuccessful war on drugs. As New Jersey moves away from criminalization of cannabis and has regraded psilocybin possession, other components of our criminal legal system also need to adjust. Reforms in sentencing are a critical component of reducing New Jersey’s reliance on the criminal legal system and the expansion of mass incarceration.”

“A majority of New Jerseyans voted to legalize cannabis on the November 2020 ballot, and national polling shows overwhelming support for moving away from criminalizing people for engaging with cannabis. Simultaneously there is a growing movement towards a public health-focused, harm-reduction approach to drug use. By shifting away from use of onerous, harmful sentencing practices for this category of offenses, New Jersey takes a first step towards aligning our sentencing policies with other policy progress that the Garden State has made. ACLU-NJ supports the elimination of all mandatory minimum sentences and hopes that this change and additional changes will be codified in statute.”

Joshua Bauchner
Partner at Ansell Grimm & Aaron PC and chair of the firm’s cannabis law practice group

“It is a welcome and long overdue change. For far too long, minorities have been prosecuted, if not persecuted, for low level, victimless cannabis offenses at a hugely disproportionate rate.”

He believes that cannabis criminalization led to a racist criminal justice system, and Grewal’s directive comes at a time when the nation is grappling with biased policing practices.

“The country is finally confronting systemic racism, as the recent verdict in Minneapolis confirms. This is one more step forward toward addressing this problem, although much more needs to be done. In addition to the taint of being labeled a felon, incarcerating people among violent offenders creates grave physical and mental risks. Often, upon release, they are challenged in being able to rejoin society as a result of this harm and stigma. A purportedly ‘rehabilitative’ system fails entirely when it never actually permits people to rejoin society free from the consequences of their incarceration.”

Grewal’s directive, he said, will begin the process of a much-needed correction of the criminal justice system in New Jersey.

“The impact will be a significant reduction in the prison population and, more importantly perhaps, the removal of the blight of ‘felon status’ for these nonviolent offenders, which forever impacts on their ability to secure housing, employment, and even vote in certain jurisdictions.”

New Jersey Supreme Court Holds Jake Honig Compassionate Use Medical Cannabis Act Is Not Preempted By The Federal Controlled Substances Act

Ansell Grimm April 20, 2021

On April 13 the Supreme Court of New Jersey affirmed the Appellate Division’s affirmation of the compensation court’s Order in the matter Vincent Hager v. M&K Construction. The Court decided that Mr. Hager was entitled to reimbursement through workers compensation for the ongoing costs of medical cannabis that he was recommended after sustaining a debilitating work-related injury in 2001. The Court reached this conclusion based on the explicit determination that subsequent Congressional action on medical cannabis preempted the Controlled Substances Act since 2015, and effectively legalized medical cannabis at the federal level for those operating in compliance with their own State’s medical cannabis laws. The Court directly challenged the Controlled Substances Act’s assertion that cannabis be listed as a Schedule One narcotic with “no currently accepted use for medical treatment” by identifying it as the clear option when faced with the choice between medical cannabis and highly addictive opioid painkillers due to medical cannabis’s ability to both provide pain relief and help in overcoming addiction to opioids. Hager v. M&K Constr., ___ N.J. ___, ___ (2021) (slip op. at 22).

The Court agreed that there was sufficient credible evidence that medical cannabis is “the clearly indicated option” when the two treatment options available are medical cannabis and opioids. They also agreed that “marijuana’s ability to relieve pain has been expressly recognized by the Legislature in the Compassionate Use Act.” Hager v. M&K Constr., ___ N.J. ___, ___ (2021) (slip op. at 22). In doing so, they also rejected competing expert testimony questioning medical marijuana’s efficacy and use. Thus, denying workers compensation coverage for medical cannabis was determined to be in direct conflict with the Legislature’s intent in passing the Compassionate Use Act.

In the most recent federal Appropriations Act, Congress again explicitly prohibited the Department of Justice from using allocated funds to prevent states from implementing their own medical cannabis laws. See Consolidated Appropriations Act, 2021, Pub. L. No. 116-260, § 531, 134 Stat. 1182, 1282-83 (2020). Congress included similar language every year going back to 2015, even listing the specific States and territories protected as their number continues to grow. “These continuing riders have ‘changed’ federal law by prohibiting the DOJ ‘from spending appropriated funds’… and ‘restrict[ing] the Federal Government from superseding State law when it comes to the use of medical marijuana.’” Hager v. M&K Constr., ___ N.J. ___, ___ (2021) (slip op. at 36) (quoting 163 Cong. Rec. H311 (daily ed. Jan. 11, 2017) (statement of Rep. Rohrabacher). The Court deemed “appropriations acts as the manifested intent of the Legislature to give no effect at all to the earlier statutes, stating that ‘[t]he earlier statutes [could not] coexist with the enacted appropriation and, consequently, must be deemed [to have been] suspended by adoption of the later appropriation acts.’” Hager v. M&K Constr., ___ N.J. ___, ___ (2021) (slip op. at 40) (quoting City of Camden v. Byrne, 82 N.J. 133, 154-55 (1980).

Likewise, the U.S. Supreme Court has long held that “‘[t]here can be no doubt that Congress could suspend or repeal [an] authorization… and it could accomplish its purpose by an amendment to an appropriation bill, or otherwise.” Hager v. M&K Constr., ___ N.J. ___, ___ (2021) (slip op. at 37) (quoting United States v. Dickerson, 310 U.S. 554, 555 (1940); accord United States v. Will, 449 U.S. 200, 222 (1980).

The Supreme Court of New Jersey joins that of New Hampshire and the U.S. Court of Appeals for the Ninth Circuit in concluding that the Controlled Substances Act’s applicability to those acting in compliance with their State’s medical cannabis laws are effectively suspended so long as Congress includes similar prohibitions in future funding legislation because there is currently no direct conflict between the Controlled Substances Act and States’ laws on medical cannabis. Appeal of Panaggio, ___ A.3d ___, ___ (N.H. 2021); United States v. McIntosh, 833 F.3d 1163 (9th Cir. 2016). This suspension of the Controlled Substances Act’s applicability to States’ medical cannabis programs is expected to last for at least the current fiscal year. However, if past behavior is any indication, there is little reason to believe that Congress will change course on States’ and territories’ rights to regulate medical cannabis as they see fit.

Ansell Grimm Adds Attorney To Cannabis Law Practice Group

Ansell Grimm April 12, 2021

Ansell Grimm & Aaron, PC announces that Zachary L. Windham has joined the firm to assist in the preparation of applications for cannabis licenses in the State of New Jersey. The addition of Mr. Windham expands the firm’s already robust Cannabis Law Practice Group, enabling it to further support its clients in licensing, corporate formation and governance, commercial leasing, contract negotiation and drafting, employee issues, capital raising and financing, and regulatory and municipal compliance.

Mr. Windham is an attorney and consultant to the cannabis industry who is widely recognized for his ability to support clients to accomplish business goals within the context of complex regulatory frameworks — including both the medical and adult-use markets, as well as industrial hemp and CBD ventures. Mr. Windham has successfully worked with clients to win numerous local competitive license processes, guided the state license process for nearly every license type, guided clients through multi-state expansion processes, and navigated the cannabis regulatory hurdles in dozens of commercial, real estate, and acquisition agreements.

Mr. Windham is admitted to practice in the states of Colorado, Florida, New York, Oregon, and Washington. He received his B.S. in Business with a dual-concentration in finance and marketing from New York University Stern School of Business and his J.D. from the University of Miami School of Law. Prior to joining Ansell, Grimm & Aaron, Mr. Windham served as the Legal & Financial Director of a Colorado-based Marijuana Business Operator.

Ansell Grimm is pleased that Mr. Windham is bringing his extraordinary experience to service its cannabis clients. Our dedicated Cannabis Law Practice Group stands ready to assist applicants with ensuring they are prepared when the Request for Applications is issued for adult use cannabis, as well as for additional medical licenses. Please contact Joshua S. Bauchner, head of the Cannabis Law Practice Group, at jb@62q.f7d.myftpupload.com or (973) 247-9000 to get started today.

Quarterly Litigation Department Roundup: April 2021

Ansell Grimm April 6, 2021

As the world continues to face the coronavirus pandemic, and millions of small businesses remain confronted with unprecedented challenges, the attorneys in Ansell Grimm & Aaron’s Litigation Department assisted dozens of clients in protecting their businesses and livelihoods. Led by co-chairs Lawrence Shapiro and Joshua Bauchner, and assisted by attorneys Barry Capp, Anthony D’Artiglio, Rahool Patel, Seth Rosenstein, Ashley Whitney, and, our newest member, Courtney Dunn, the Department is pleased to share its numerous successes.

Real Estate Litigation

In a recent matter before the Honorable Henry P. Butehorn in Monmouth County, Lawrence Shapiro and Seth Rosenstein were successful in securing summary judgment in favor of their clients as to all claims prior to trial. Plaintiffs asserted causes of action sounding in common law fraud, violations of the New Jersey Consumer Fraud Act, Unjust Enrichment, Negligence, Breach of Contract, and Equitable Servitude in connection with their purchase of real property in Ocean Grove, New Jersey. The sellers, who own the property sold to Plaintiffs as well as an adjoining property, prohibited the buyers from utilizing a walkway on sellers’ adjoining property to access the rear entrance to buyers’ home. The buyers asserted that representations were made by sellers as to their ability to utilize sellers’ walkway, and that they overpaid for their property if there was no access through the rear entrance.

Judge Butehorn’s Order found that there was no basis upon which to establish claims for common law fraud or Consumer Fraud against the defendants. Specifically, the Court agreed with AGA’s argument that any representation as to walkway access on adjacent property was not part of the transaction at issue and thus could not serve as a basis for a claim of fraud or consumer fraud.

Plaintiffs subsequently filed a motion for reconsideration of the Court’s summary judgment order, which was denied, confirming the victory for our client.

Appellate Litigation

Barry Capp succeeded before the Appellate Division in upholding the validity of the City of Asbury Park’s short-term rental (Air BnB) ordinance, which permitted and established procedures for the short-term rental of residential properties. The plaintiff filed a complaint in the Law Division, Monmouth County, alleging that the ordinance was adopted improperly and that Ordinance itself was facially invalid.

The Ordinance defines those classifications of properties where short-term rentals are both permitted and prohibited. It further establishes a permitting process for property owners who wish to utilize their properties as short-term rentals. Plaintiff asserted a challenge to the manner in which the Ordinance was adopted, claiming that it creates a “new” use of residential property that is a non-permitted and, therefore, was required to be adopted as a zoning ordinance pursuant to the procedures contained in the Municipal Land Use Law (MLUL). Plaintiff further claimed that the use of residential property for short-term rentals violates the City of Asbury Park’s zoning ordinance and therefore was required to be invalidated.

In a thirteen (13) page unanimous decision, and a major victory for the City of Asbury Park, the Appellate Division upheld the City’s actions in adopting the Ordinance and its validity pursuant to its municipal police powers. In so doing, the Appellate Division affirmed the right of owners of certain classifications of property to use their properties as short-term rentals pursuant to procedures established by the City of Asbury Park and its governing body.

Bankruptcy Litigation

Joshua Bauchner and Anthony D’Artiglio are pursuing a multi-million dollar cure dispute in Southern District of New York Bankruptcy Court, seeking to compel a retail Debtor who operated a chain of grocery stores to pay for numerous, needed repairs to a large production and distribution facility. The Debtor failed to maintain the property in the condition required by the Lease, leading to large scale deterioration. The case presents interesting legal questions at the intersection of commercial landlord-tenant law and Bankruptcy law, particularly in light of the new tenant’s assumption of the Lease “as is” as part of the Bankruptcy proceedings.

Class Action Litigation

Joshua Bauchner and Rahool Patel continue the defense of multiple class actions filed against New Jersey Retrofitness gym franchises. This now seven-year old litigation is on remand from the Appellate Division, where the firm successfully secured the dismissal of seven of the eight claims, dramatically narrowing the scope of the litigation. As a result of numerous procedural challenges encountered by plaintiffs, the matter is back at the pleading stage ensuring our already strapped gym clients are not at risk of liability anytime soon.

COVID-19 Litigation

Department attorneys continue to represent national retail and restaurant tenants in numerous COVID-19 Pandemic-related litigations, securing temporary restraints and preliminary injunctive relief to prevent self-help lockouts, restore utilities, permit outdoor dining, and stay eviction actions. As pandemic law remains largely unsettled, the Firm presented novel legal arguments to secure favorable decisions and settlements on behalf of many clients, and are preparing for what is understood to be the first trial in the State addressing the impact of Governor Murphy’s Executive Orders restricting operations.

Policeman Benevolent Association Litigation

Ashley Whitney is waiting on a decision from the Appellate Division involving the termination of a police officer with no prior discipline for alleged Criminal Justice Information Systems violations under State v. Donis, through his use of full-disclosure searches despite the police department’s failure to identify a single full-disclosure search conducted without justification. The Appellate Division’s decision could have lasting implications for police officers as there is little case law addressing the application of Donis in this context.

Ms. Whitney also is continuing her prior practice of the representation of police officers as a member of the PBA Legal Protection Plan at the Firm’s Woodland Park office and is currently defending a high-ranking correctional police officer served with inflated disciplinary charges.

Personnel Successes

Courtney Dunn joined as an associate with the Firm. Prior to joining Ansell Grimm & Aaron, Ms. Dunn practiced commercial litigation along with sports and entertainment law, labor and employment law, and toxic tort law at a firm in New York City. Ms. Dunn received her juris doctor, cum laude, from the Elisabeth Haub School of Law at Pace University where she was a Pro Bono Scholar and worked as a research assistant to Professor Donald L. Doernberg. During law school, Ms. Dunn interned for Justice Terry J. Ruderman, J.S.C. of the Supreme Court of New York. She also served as an Articles Editor on the Pace International Law Review and was a member of the Moot Court Honors Board.

Following law school, Ms. Dunn served as a law clerk to The Honorable Judge Craig L. Wellerson, the Presiding Civil Division Judge of the Ocean Vicinage of the Superior Court of New Jersey. Ms. Dunn is admitted to practice in New Jersey and New York as well as the Southern District of New York and the Eastern District of New York

Anthony D’Artiglio was named as “One To Watch” by Best Lawyers Magazine, for commercial litigation. We congratulate Mr. D’Artiglio on this remarkable achievement.

Make Room for Hemp: NJ and NY Industrial Hemp Regulations

Ansell Grimm March 26, 2021

We have all been following the transforming laws governing the sale and purchase of marijuana which have remained centralized in headlines for quite some time now. Amidst all the excitement, we don’t want to overlook the changes being made state by state in hemp distribution and sale.

New Jersey
Under the relevant regulations, “hemp” means the plant Cannabis sativa L. and any part of that plant, including the seeds of the plant and all derivatives, extracts, cannabinoids, isomers, acids, salts and salts of isomers, whether growing or not, with a delta-9 tetrahydrocannabinol concentration of not more than 0.3 percent of a dry-weight basis. Hemp and hemp-derived cannabinoids, including cannabidiol, shall be considered an agricultural commodity and not a controlled substance due to the presence of help or hemp-derived cannabinoids. See N.J. Stat. § 4:28-8.

While smokable hemp flower is not mentioned specifically within the regulations, according to the state’s definition of hemp and associated regulations, hemp flower is treated like other hemp products, and, therefore, legal in the State of New Jersey. 2018 N.J. A.N. 5322 § C.24:5-23(c) provides that “[n]otwithstanding any other law, a person or business entity may possess, transport, sell, and purchase legally produced hemp products in this state.”

The cultivation, handling, and processing of hemp or hemp products is governed mainly by 2018 N.J. A.N. 5322. This provision generally states that it is lawful for a hemp producer or its agent to cultivate, handle, or process hemp or hemp products in the State. Section C.25:5-23(9)(e) later clarifies that “[r]etail sales of hemp products processed outside the state may be conducted in the state when the products and the hemp used in the products were processed and cultivated legally in another state or jurisdiction that has the same or substantially similar requirements for processing hemp products or cultivation hemp as provided in P.L. C. 238.”

A large portion of the regulations relate to producing the hemp and the site at which hemp is produced. The applicant will need to be able to provide some of this information, which is quite detailed, especially as related to the product site itself. Every individual that intends to plant, grow, harvest, possess, process, distribute, buy, or sell industrial hemp for commercial purposes in New Jersey needs to apply for a license with the Secretary of Agriculture.

The New Jersey Hemp Processor/Handler License Application can be found here.

Upon applying for a license, the State of New Jersey will conduct a background check. Along with the application, there is a $50 application fee, along with additional documentation and payments, which can be found on page 11 of the processing application. Of course, the application can be denied for a variety of reasons ranging from insufficient funding to a criminal background.

New York
2019 N.Y. AB 8977 governs hemp growth, sale, distribution transportation and processing in New York. New York provides the same definition for hemp as described above under New Jersey law. Section 3398 sets forth that you must obtain a cannabinoid hemp retailer license from the Department of Agriculture in order to legally sell hemp product. Under § 3398-d, you can apply for a license with the Department and it can be filled out by either yourself as an applicant or by a representative. This license is available at the New York State Business Express website with a log-in requirement. There are separate applications depending on whether the intended purpose for the license is to distribute, or to process and grow. Section 3398-d explains that a separate license is needed for each facility at which retail sales are conducted or you can otherwise submit one application for separate licensure at multiple locations.

Section 3398-g lists the selection criteria for licensure including: good moral character, experience and competency, adequate facilities, equipment, process controls, and security to undertake activities, ability to comply with all applicable state and local laws, rules, and regulations. Of course, the commissioner can deny an application and, if that happens, will provide reasons to justify the denial.

Notably, a new Part 1005 of Title 10 (Health) of the Official Compilation of Codes, Rules, and Regulations of the State of New York has been amended, thus altering the regulations of processing and retail sale of cannabinoid hemp in New York State. According to Section 1005.1(m), “flower product” means “any form of cannabinoid hemp product consisting of the flower, buds, leave, or stems of the hemp plant, including trimmings thereof, intended for retail sale to consumers without further processing”.

Section 1005.8 outlines the cannabinoid hemp product requirements to be sold at retail. One of the requirements specifies that the product cannot be in the form of flower product including cigarette, cigar, or pre-roll, or any other disallowed form determined by the department. That is likely for good reason – smoking hemp cigarettes has increasingly been mistaken by law enforcement to be illegal marijuana. A number of reports state that if a person gets arrested for smoking, what seems to be, marijuana without a license, he can be held in custody until law enforcement is able to make a determination (i.e. send it out for testing) that it was, in fact, hemp.

The application for a New York Cannabinoid Hemp Distributor Permit can be found here.

If the application is granted, the license is good for one year and has an annual license fee of $300 for each retail location.

Hemp product has been steadily gaining popularity. Both New York and New Jersey have provided easy-to-follow guidelines to spell out how one can go about gaining a license to either grow or distribute. For assistance filling out an application or for any additional questions related to industrial hemp or marijuana, visit our Cannabis Group.

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