Make Room for Hemp: NJ and NY Industrial Hemp Regulations

Posted on March 26th, 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.

Rejected Medical Marijuana Dispensaries Revive Legal Fight Over 2018 Application Process By Sam Sutton

Posted on March 8th, 2021

Politico (March 5, 2021) – – Businesses that lost out on a highly competitive application process for medical marijuana licenses in 2018 are reviving their legal battle against New Jersey’s Department of Health, claiming the department hasn’t adhered to a November ruling that called its handling of the request for applications process “arbitrary, capricious and unreasonable.”

On Thursday, Superior Court Appellate Division Judge Clarkson Fisher granted six applicants that had been rejected in the 2018 RFA the ability to file for emergent relief. Motions are due no later than March 9.

Why it matters: If the Appellate Division grants the motions, the health department’s attempts to develop the state’s medical marijuana program will be mired in even more litigation at a time when oversight of the industry is set to transition to the Cannabis Regulatory Commission. Jeff Brown, who oversees the medical marijuana program for the health department was named executive director of the new, as-yet unformed commission by Gov. Phil Murphy last year.

A health department spokesperson did not immediately respond to a request for comment.

What they want: The plaintiffs — five businesses that submitted a combined six applications in the 2018 RFA — want the department to further clarify the process it used to award six available licenses out of a pool of nearly 150 applicants. They also say the November ruling could merit the awarding of additional permits.

The health department announced the winners for the six permits in late 2018, however, and while the court’s November decision found there was nothing precluding the department from issuing additional permits — the department held another RFA offering for medical marijuana cultivation and dispensing licenses in 2019 — “we have no license to increase the number of successful applicants beyond six as the means for moving these proceedings more quickly to the next step. In fact, it is far from clear that any further proceedings will move any appellant into the top six,” according to the previous ruling.

What happened next: The department ultimately responded to the November ruling by setting up a supplemental submission process whereby the plaintiffs could challenge the scores they were awarded. It also set up a “Quality Control Committee” to review the RFA process and scoring criteria, which the November ruling had found to be problematic.

That isn’t enough, according to the applicants’ attorneys.

“The Department’s recalcitrance leaves the 2018 Appellants stuck on a treadmill,” Joshua Bauchner and Rahool Patel of Ansell Grimm & Aaron, wrote in a letter to the court. “The Department has refused to provide Appellants with the most basic additional information regarding the remand process, again leaving Appellants with more questions than answers.”

To view online:
https://subscriber.politicopro.com/states/new-jersey/story/2021/03/05/rejected-medical-marijuana-dispensaries-revive-legal-fight-over-2018-application-process-1367055

NJ Gov. Signs Legal Pot Bills After ‘Bungled’ Process By Bill Wichert

Posted on February 23rd, 2021

 

Law360 (February 22, 2021, 12:43 PM EST)

New Jersey Gov. Phil Murphy on Monday signed legislation to set up an adult-use recreational marijuana market in the Garden State, ending what one state senator had called a “bungled” process as the governor and legislators tussled for months over the consequences for underage possession of cannabis items.

The Democratic governor took that historic step after the Democrat-led state Legislature on Monday approved a so-called cleanup bill aimed at securing his signature on two separate bills that were passed in December to establish a regulated marketplace for selling adult-use recreational marijuana and to decriminalize the possession of up to six ounces of the drug.

Near the start of a Monday briefing on the state’s ongoing response to the COVID-19 pandemic, Murphy said he had signed the three bills and acknowledged that “this process has taken much longer than anticipated.”

“But certainly it is better to get things done right than fast and to ensure that all voices are heard and all views are considered,” Murphy said. “This process may have had its fits and starts, but it is ending in the right place and I firmly believe this process has ended in laws that will serve as a national model.”

The enactment of the legislation comes more than three months after Garden State voters in November approved by a more than two-thirds majority a state constitutional amendment legalizing cannabis for adult use, which took effect Jan. 1. Supporters of legalization have stressed the need to end marijuana arrests that have disproportionately affected people of color.

The marketplace bill will allow consumers 21 years and older to buy marijuana for personal use from licensed businesses, and it outlines provisions for taxing cannabis products. A commission tasked with overseeing the state’s current medical cannabis program will also oversee the recreational market, which will likely not be up and running until at least 2022.

The decriminalization bill will enable the possession of up to six ounces of marijuana or up to 170 grams of hashish without any criminal or civil penalties, and it will lead to reforms aimed at bringing social justice to communities hurt by the war on drugs.

But those bills are seemingly at odds when it comes to underage possession. While the decriminalization bill allows for small amounts of marijuana, the marketplace bill subjects underage individuals to disorderly persons offenses.

Murphy refused to sign the bills unless changes were made to the provisions dealing with the consequences for underage possession. Lawmakers attempted to make revisions through cleanup legislation, but such measures struggled to garner enough support until Monday’s voting sessions.

“Sixty-six percent of the voters of New Jersey spoke loudly and clearly that they want to legalize … recreational marijuana and they turned it over to this administration and this Legislature to put the process in place,” Sen. Paul Sarlo, D-Bergen, said during the Senate’s voting session.

But the administration and the Legislature “bungled this process,” Sarlo added.

Among other provisions, the cleanup legislation enacted Monday will eliminate the disorderly persons clauses in the marketplace bill and establish a three-tier warning system for underage possession or consumption of alcohol or cannabis items.

The bill also will allow for law enforcement officers to be charged with the crime of official deprivation of civil rights for “knowingly” committing violations related to underage possession or consumption of alcohol or cannabis items, such as for “requesting that a person consent to a search who is not capable of giving lawful consent.”

Noting that the bill was the result of much debate and compromise, Sen. Nicholas Scutari, D-Union — the principal architect of the state’s marijuana legalization effort — told his colleagues that “nothing is ever perfect” and “let’s not let the pursuit of the perfect be the enemy of the good.” The bill is “the best we’re going to get at this point in time.”

“I believe that the underage provisions in here offer appropriate protections for our young people … and keeping them out of the criminal justice system, again freeing up law enforcement and our judicial system to do the much more important items than dealing with marijuana claims, arrests,” Scutari said during the voting session.

As for the provisions related to police misconduct, Scutari added that “much of what’s in this bill today already exists in law.” He acknowledged that the legislation expands the type of victims who could bring the civil rights claims.

But Sen. Robert W. Singer, R-Ocean, argued that the bill “criminalizes police,” suggesting that officers will be afraid to stop underage individuals. He also blasted how the proposed warning system effectively leaves them without any consequences for using alcohol or cannabis items.

“This is absolutely in my mind a way to say, if you want to smoke marijuana if you’re underage, you can, if you want to drink if you’re underage, you can, and there’s no consequence for your actions,” Singer said.

During the Assembly voting session, assemblywoman Holly T. Schepisi, R-Bergen, echoed that point and expressed concern about “creating a culture for our children that essentially is giving them passes to go engage in bad behavior.”

“This bill…is just going to drag all of our youth, regardless of color, into the gutter,” Schepisi added.

Assemblywoman Mila Jasey, D-Essex, later countered that “possession convictions have destroyed lives” and said “it has been argued that passage of this bill will result in underage use with impunity because law enforcement will refuse to act.” The stark reality is “that enforcement power has always been disproportionately applied in communities of color,” she said.

“We cannot allow our fear of adverse consequences to outweigh the disastrous consequences of what has already occurred and, make no mistake, these consequences have fallen squarely upon the very young people who some are so stridently arguing must be protected,” Jasey said.

–Editing by Alyssa Miller.

Update: This article has been updated with additional information on the cleanup bill.

Legal Problems for NJ Medical Marijuana Licensing by Janice Kirkel

Posted on February 22nd, 2021

 

 

FEB 18, 2021 – New Jersey’s medical marijuana licensing process can resume after a court ruling but how it will do that is an open question.

A number of applications were rejected because of technical problems with filing. The applicants sued the state’s department of health over this, but lost.

Craig Provorny, one of the lawyers, said the department didn’t do much to try and fix the problem. “You would hope that they would fix the system going forward but who knows, in our view, in this case, it’s just tough luck, the problem is in the end we may not be getting the best pool of applicants,” he said.

Attorney Joshua Bauchner also represented those whose applications were thrown out because of computer problems. “We’ve banged our head against the wall for a year and a half now trying to understand why they just wouldn’t allow the applicants to resubmit with a certification that nothing’s changed,” he said. “Because again, there’s no dispute, these are qualified applicants and there’s no reason not to review their applications and score appropriately.”

Technical problems aren’t the only ones here. A court ruled in November that the department must change its “unreasonable” system for awarding licenses and make it more transparent. The department has yet to act and had no comment for this story.

“It really creates a conundrum for the state, because as much as I understand they’re eager to score the 2019 applications, the entire methodology and protocol for doing so has been rejected by the court,” he said.

About 150 license applications have sat around for more than a year.

N.J. court hears arguments in case that has stalled expansion of medical marijuana

Posted on February 3rd, 2021

 

Updated Feb 03, 2021; Posted Feb 02, 2021

By Amanda Hoover | NJ Advance Media For NJ.com

EDITOR’S NOTE: NJ Cannabis Insider is hosting a two-day business and networking conference March 9-10, featuring some of the state’s most prominent industry leaders. Early-bird registration is open. Tickets are limited.

A three-judge appellate court panel heard arguments Tuesday in a case that has stalled the expansion of the New Jersey’s burdened medical marijuana program.

But the court must still issue a decision before the state can reopen its review of licenses that a lawsuit put on hold in late 2019.

The case involves eight rejected medical marijuana applicants from a round of licensing the Department of Health opened in 2019. The applicants in question lost out due to technical issues with their applications or because they had insufficient documents to show the town they wished to operate in approved of the business.

But they argue the department incorrectly rejected their applications during its first round of cuts and should reconsider them along with 146 others still in the running.

“The entire purpose of this undertaking is to ensure a merit-based review so that the best and most qualified applicants are awarded licenses to serve the patient population,” Joshua Bauchner, one of the attorneys representing the appellants, said during the hearing, which was held remotely.

“There is no reason to disavow that undertaking. These applications should be scored along with the rest so that the best candidates are awarded licenses and we can proceed.”

More than 190 groups applied for 24 licenses in the summer of 2019. The licenses ranged from large operations to grow, process and dispense marijuana down to smaller businesses that would only grow or dispense marijuana to patients.

The licenses are vital not only to the 100,000 medical marijuana patients in the state who have long complained of product shortages and long lines, but to increase the amount of marijuana in New Jersey and launch a legal marijuana industry once Gov. Phil Murphy signs a bill into law.

The state eliminated 51 applicants during its first round of reviews for licenses in 2019. But several of those took issue with the decision, claiming they were denied simply because the department could not open PDFs attached to their applications.

They have called on the department to reopen their applications, but the state has declined to do so. Instead, an appellate court put the entire process on hold and stranded some 146 other applicants in limbo as those who were rejected awaited their day in court.

Fifteen groups submitted applications with corrupt files, and attorneys Tuesday argued that was a large enough proportion to indicate the technical issue lies with the department, not the filers.

But the health department disagreed. Assistant Attorney General Jacqueline D’Alessandro, who represented the department Tuesday, said an investigation revealed the state was not at fault, and noted that the vast majority of applicants had no problems with their submissions.

“Once this issue was discovered, the department took steps,” she said.

“After investigation, it reasonably concluded the issues did not lie with the department,” she said. “If there was some common compression or corruption problem, most, if not all, applicants would have had this issue.”

But Bauchner argued there was no proof the corruption had occurred on the applicants’ part, as they had taken PDFs from the state and submitted them to the health department.

It’s not the first time the health department has faced legal challenges to its licensing process. Another group of rejected applicants sued over a 2018 licensing round, arguing the scoring methods for selecting six license winners lacked a clear methodology.

A court ruled in November that the health department must change its “unreasonable” system for awarding licenses and offer more transparency going forward.

The appellants argued that point Tuesday, calling the second case “deja vu.”

Throughout the delays, Bauchner has said the applicants would resubmit their materials in a different format if given the chance by the health department. He has said the department could have asked for that at any point, avoiding the year-long delay.

“No one knew there were any problems during the submission process,” he said. “We only learned there were problems three months later.”

 

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Amanda Hoover may be reached at ahoover@njadvancemedia.com. Follow her on Twitter @amandahoovernj.

 

New N.J. legal weed compromise offered with deadline looming for Murphy to act

Posted on January 29th, 2021

 

By Amanda Hoover | NJ Advance Media For NJ.com

Updated Jan 29, 2021; Posted Jan 28, 2021

EDITOR’S NOTE: NJ Cannabis Insider is hosting a two-day business and networking conference March 9-10, featuring some of the state’s most prominent industry leaders. Early-bird registration is open. Tickets are limited.

After weeks of fruitless negotiations on penalties for underage marijuana use and with a deadline to sign two marijuana reform bills looming, Gov. Phil Murphy and lawmakers inched closer to a compromise Thursday.

Talks resulted in a new cleanup bill to address the issue and discussions are continuing, according to two sources with knowledge of the negotiations. But they are far from becoming a done deal.

Assemblyman Benjie Wimberly, D-Passaic, plans to introduce the bill dealing with underage penalties Friday to be heard in a Community Development and Affairs Committee hearing at 2:30 p.m.

If the Legislature passed such a measure, Murphy could sign it and the two other bills legalizing (S21) and decriminalizing (S2535) marijuana into law together.

“Productive talks took place today,” according to a legislative source who was not authorized to speak publicly about the new bill. “This was a result of that.”

The bill is not yet available to the public, and it was not clear Thursday evening what provisions it contains. Wimberly did not immediately return a call seeking comment on the bill.

A note on the legislative website says the bill “revises consequences for underage possession or consumption of various forms of cannabis included in legislation passed by both Houses of Legislature.”

Murphy has remained optimistic about making a deal with state lawmakers on penalties for underage marijuana use, even as legislators have repeatedly called for him to sign the legalization and decriminalization bills they passed last month.

But if he doesn’t get the lawmakers to agree to address the issues on their own by Friday, he may issue a conditional veto.

Sen. Nick Scutari, D-Union, who sponsored the legalization bill, said earlier this week he thought it would be difficult to get a majority of senators to concur with a conditional veto.

On Thursday evening, Scutari said he may introduce a matching cleanup bill Friday if there’s agreement among other lawmakers.

He said the measure is somewhat similar to the past cleanup bill in that it would focus on civil rather than criminal penalties for at least a first offense, but did not provide further details about the plan.

While hopeful the agreement could move his landmark bill forward, Scutari said it was not a done deal.

The deadline for Murphy to act on the bills is Feb. 8.

Many expected the governor to sign the the two bills into law by the end of 2020. But days before Jan. 1, he said he would not sign either until lawmakers made changes to establish uniform civil penalties for those under 21 who use marijuana.

The current bills have a discrepancy: The legalization bill makes possession by those under 21 a disorderly persons offense, similar to alcohol. But the decriminalization bill makes possession of up to six ounces of marijuana legal for everyone, no matter their age.

Instead of issuing a veto in late December, Murphy sent suggestions back to lawmakers who then developed a first cleanup bill. It sought to establish fines for those 18 to 20 caught with marijuana and warnings for juveniles.

It seemed the compromise would finally push the measure over the finish line. But it fell apart days later when Black lawmakers unified to oppose the changes, saying they would lead to police targeting Black and brown teens at higher rates than white youth.

While the legalization bill passed the Legislature by smaller margins, both chambers passed the decriminalization bill with veto-proof majorities. Senate Democrats sent a letter to Murphy Wednesday afternoon calling on him to sign decriminalization bill into law as negotiations continue on legalization.

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Amanda Hoover may be reached at ahoover@njadvancemedia.com. Follow her on Twitter @amandahoovernj.

Patterson Appointed HVCAI President

Posted on January 12th, 2021

Stacey R. Patterson, Esq. has been appointed as the 2021 President of the Community Association Institute Hudson Valley Chapter Board of Directors. Ms. Patterson has been an active member of the Chapter since 2010 and a member of its Board of Directors since 2017.  Ms. Patterson previously served on the Chapter’s executive committee, taking on leadership roles in numerous seminars and educational sessions offered by the Chapter. In her new role as President, she is looking forward to implementing new ways to increase membership and to convey important information to its current members during these unprecedented times.

Ms. Patterson has served as counsel with Ansell Grimm & Aaron PC in the Community Association Law practice group for the past 6 years. Since 2000, she has represented community associations in transactional, litigation, and government-related matters. Ms. Patterson has extensive experience in dealing with issues pertaining to the Non-Profit Corporations Acts, Condominium Acts, and Real Property Acts in New York and New Jersey.

The 21 In Cannabis To Watch In 2021

Posted on January 11th, 2021

New Jersey’s legal marijuana industry is in its embryonic stage. There is still no law on the books, and the government body charged with regulating the industry is not yet created. But there are many entrepreneurs, social justice advocates, attorneys and other professionals who are eager to help shape the mighty market that everyone expects will grow in the Garden State.

NJ Cannabis Insider developed this list of people and companies to watch as this process unfolds. We include companies with plans to expand the number of medical marijuana retail sites because they will be the first to sell to the adult use market and the market has been stifled so long. We also include people who wield influence in Trenton because so much work remains to be done at the legal and policy level.

  1. Alternative treatment centers Columbia Care, Harmony Foundation and Curaleaf and TerrAscend all plan to add satellite locations to sell medicinal marijuana this year.
  2. Josh Bauchner, head of the Cannabis Law Practice Group for Ansell, Grimm & Aaron in Woodland Park, has challenged the state Health Department’s licensee decisions in 2018 and 2019 on behalf of unsuccessful applicants. Some blame him for holding up the sorely needed expansion of the medicinal market. But when an appellate court decided in November the state’s process in 2018 of awarding licenses was confusing and lacking in transparency, it gave losing applicants hope they may have a shot in the future.

Josh Bauchner (Photo by Steve Hockstein | For NJ Cannabis Insider)

  1. Rev. Charles Boyer, pastor of Bethel A.M.E. church in Woodbury and the founder of Salvation and Social Justice— has been and will continue to be a prominent voice for equity, influencing legislation and policy.

Rev. Charles Boyer (Photo by Patti Sapone | For NJ Cannabis Insider)

  1. Jeff Brown, the Assistant Health Commissioner overseeing the medicinal marijuana program. has been tapped as executive director of the Cannabis Regulatory Commission, which will run both medical and adult-use markets.

Jeff Brown (Photo by Patti Sapone | For NJ Cannabis Insider)

  1. Bill Caruso, attorney and managing affairs director for Archer Public Affairs is also a founding member of New Jersey United for Marijuana Reform. The former executive director of the Assembly Majority Office continues to advise lawmakers drafting the legalization bill.
  2. Coalition for Medical Marijuana – New Jersey, the community organization that championed the law long before it gained traction in Trenton, will continue to bang the drum for home-grow. Their fight is gaining converts and attention.
  1. Jackie Cornell, chief of policy and health innovations at cannabis company 1906, and Jacqueline Ferraro, VP of business development for Full Steam Staffing, have joined forces to launch the Cannabis Advisory Group, a newly formed professional organization that has already begun surveying municipalities on their concerns surrounding legalization.

Jackie Cornell (Photo by Patti Sapone | For NJ Cannabis Insider)

  1. New York Gov. Andrew Cuomokicked off 2021 by introducing a plan to legalize marijuana in his state this year. That could make New York the Garden State’s only nearby competitor in the new market, and could influence the size of New Jersey’s market.
  2. Ed DeVeaux, lobbyist for Burton Trent Public Affairs, is the new president of the leading trade group, the New Jersey CannaBusiness Association. He replaced founder Scott Rudder late last year.

Edmund DeVeaux

  1. Sarah Fajardois the policy director of ACLU-NJ. She provided expert testimony in many legislative hearings in 2020. Her organization continues to advocate for racial and social justice provisions in the rollout of the enabling legislation and decriminalization.

Sarah Fajardo

  1. Ed Forchion, known asNJ Weedman, remains a fearless trailblazer and rabble-rouser from his cannabis cafe, NJ Weedman’s Joint in Trenton. Openly selling personal-use cannabis across the street from Trenton City Hall, he will continue to push the boundaries of what the law allows.

NJ Weedman (Photo by Patti Sapone | For NJ Cannabis Insider)

  1. Jessica Gonzalez is the general counsel for Minorities for Medical Marijuana and was a vocal advocate for equity in licensing and taxation during the passage of S21/A21.

Jessica Gonzalez (Photo by Aristide Economopoulos | For NJ Cannabis Insider)

  1. Dianna Houenou, president of the yet-to-be-constituted Cannabis Regulatory Commission, worked for the ACLU of New Jersey and ran point on social justice issues involving marijuana before Gov. Phil Murphy hired her as a senior Policy Advisor in 2019. People are counting on her sensitivity and integrity to set an example for the nascent industry.

Dianna Houenou

  1. Janice Kovach, president of the N.J. League of Municipalities, along with Mike Cerra, the league’s executive director, will have a lot to say about what the local impact of the industry should be.

Janice Kovach

  1. David Nathan, founder of Doctors for Cannabis Regulation, has rallied the members of the medical community around marijuana reform. He has proposed a system that would create uniform regulations for labeling cannabis products.

David Nathan (Photo by Patti Sapone | For NJ Cannabis Insider)

  1. Tara “Misu” Sargente, owner of Blazin’ Bakery and podcaster traded her position as executive director for the NJ CannaBusiness Association for board member. She’ll remain a recognizable industry influencer.

Tara Misu Sargente (Photo by Patti Sapone | For NJ Cannabis Insider)

  1. Scotts Miracle-Growas the biggest financial booster of the legalization constitutional amendment. Look for this Ohio-based company to bring its hydroponic product line to the Garden State for cannabis growers.
  2. Susanna P. Short,a cannabis industry consultant with iAnthus and member of New Jersey Cannabis Trade Association, emerged from behind the scenes in 2020. She’s been influential in getting the existing ATCs to work together on issues like online ordering and home delivery.

Susanna P. Short (Photo by: Steve Hockstein | For NJ Cannabis Insider)

  1. Beth Stavolaand iAnthus: The two are in a legal fight for control over MPX NJ, which was expected to open in Pleasantville and Atlantic City last year. A court last month issued an interim order that gave some control back to Stavola after iAnthus allegedly steamrolled the company.

Beth Stavola (Photo by Aristide Economopoulos | For NJ Cannabis Insider)

  1. State Sen. Troy Singleton, D-Burlington, has introduced a bill (S2875) that would allow ATCs to invest in licenses held by minorities, women and veterans. It could shape how minority licensees seek funding, and also increase the power of existing ATCs in the state. He also was instrumental in leading the behind-the-scenes conversations that led to a deal on the legalization bill in December (before it stalled again.)
  2. The United Food and Commercial Workers already represents some cannabis employees in New Jersey, and represents thousands nationally. Expect the union’s relevance and interest to grow in New Jersey because the state expects operators to have “peace agreements” with unions, which say the company will agree not to oppose union activity.

— Susan K. Livio, Amanda Hoover and Enrique Lavin 

NJ Pot Advocates Say License Caps Could Shape Industry – By Diana Novak Jones

Posted on December 28th, 2020

Law360 (December 23, 2020, 4:39 PM EST) — As legislation framing the new adult-use marijuana market in New Jersey awaits the governor’s signature, advocates say one of the most consequential decisions for what could be the industry’s most lucrative state has yet to be made.

New Jersey’s proximity to New York and Pennsylvania — two populous states without legal recreational marijuana — will mean its adult-use marijuana businesses could have near-exclusive access to one of the most densely populated parts of the country.

Legislators have drafted the first rules for the industry, and they already include a restriction on the number of cultivators. If Gov. Phil Murphy signs off, the process will move into regulators’ hands. It’s there that the competition could ramp up, depending on whether the Cannabis Regulatory Commission decides to limit the number of dispensaries and other marijuana businesses.

If they do, the fight could be just getting started, advocates say.

Joshua Bauchner, head of the cannabis practice group at New Jersey law firm Ansell Grimm & Aaron PC, pointed to the “green trail,” a reference to Interstate 91, as evidence people will travel for marijuana.

New Yorkers drive between two and three hours on the interstate to reach Massachusetts, where they can access recreational marijuana dispensaries, Bauchner told Law360. Soon, they’ll instead be able to ride a New Jersey transit train for 15 minutes, he said.

And if regulators decide to put caps on dispensary licenses, “the few operators that are lucky enough to get a license will basically have monopolistic power,” he said.

A Sticking Point

A key feature of many states’ forays into recreational marijuana has been to cap the number of licenses issued, and New Jersey has been no exception so far.

Caps on cultivation were among the hotly debated elements of New Jersey’s recreational pot legislation, spurred by concerns about controlling the amount of product available, according to Harris Laufer, the legislative director for New Jersey State Sen. Nick Scutari, D-Union County, who led the push for the bills. The legislation that passed New Jersey’s Legislature on Dec. 17 came with a cap of 37 cultivation licenses.

Scutari has been working toward legalizing recreational pot since he joined the Legislature in 2004, in a process that has been repeatedly stymied by reluctant lawmakers. He said it would not have happened this year without voters’ clear support on the measure.

“If that didn’t happen, I can think of a few legislators that would not have voted for it,” Scutari said.

Scutari prefers a free-market approach, but the cap on cultivators was a critical part of the negotiations to get the deal on the legislation done, Laufer said. And the cap, which expires after two years, covers both medical and recreational cultivators, so many of the licenses are already claimed.

Scutari said he worked with the governor’s office to craft this legislation, so he is confident it will get Murphy’s signature.

But with the restriction on cultivators in place, many in the industry are wondering whether more limits are on the way.

Once Murphy approves the legislation, the rest of the state’s pot regulations will be drafted by the Cannabis Regulatory Commission. Murphy has been selecting the commission’s members since earlier in fall.

The licensing process needs to be put together, then the licenses need to be awarded, Scutari said.

“There’s a lot to that,” he said, predicting it will be at least six months before the licenses go out.

Cap Concerns

The Garden State’s potential as a new marijuana market has many in the industry worried about caps on businesses like dispensaries and producers, and what that could mean for businesses hoping to get a foothold.

Nothing is finalized yet, but advocates for different groups say limits on licenses could leave a lot of people out of the burgeoning industry. And once the legislation is signed, it will be up to the Cannabis Regulatory Commission to decide whether to include them.

Representatives for Murphy declined to comment or make the newly chosen head of the commission, Dianna Houenou, available to speak about the coming regulations.

One group concerned about the use of caps are those behind the ballot measure that legalized marijuana.

Amol Sinha, executive director of the American Civil Liberties Union’s New Jersey chapter and chairman of the ballot measure initiative, NJ CAN 2020, said caps are a problem when it comes to the group’s goal of improving access to the industry for people impacted by the war on drugs.

“They eliminate competition, they artificially keep the price of cannabis high,” Sinha told Law360.

Caps “make it hard for everyday people to obtain a license. Only the people who are already set up are going to get those, and usually those are big operators,” Sinha said.

Sinha applauded a part of the legislation that sets aside 70% of the sales tax and additional fees from legal marijuana for impact zones, which he said were largely minority communities across New Jersey. The ACLU put its weight behind that measure after initial proposals had the bulk of the money going to law enforcement, he said.

But the legislation doesn’t have a plan to set aside licenses for equity applicants, or people disproportionately hurt by marijuana prohibition, he said. That will also be up to the regulators, Sinha said.

Another person watching to see what happens with the regulations is Bauchner, who is representing several would-be medical marijuana operators in two separate and ongoing lawsuits over New Jersey’s medical marijuana licensing process.

The lawsuits target the New Jersey Department of Health, which oversees medical marijuana, deciding how many dispensaries the state will have and who gets them. Bauchner says the regulators for recreational marijuana should expect competition for the licenses to be fierce.

“If past is prologue, everyone is going to be interested in the adult-use market,” he said.

If caps are put in place, there will likely be more litigation, Bauchner added. And he thinks caps are likely, given their political support.

“We’re likely to see, as we have in the past, hundreds of applications,” he said. “The problem then becomes qualified applicants are being denied the right to pursue that option because of an arbitrary cap.”

Limits will likely also have the backing of major marijuana companies, which are already present in the state’s medical industry, Bauchner said.

If regulators rely on caps, “they’ve created a system where the stakes are so high, it engenders litigation and it permits monopolistic conduct,” he said. “It’s going to yield problems.”

–Additional reporting by Bill Wichert. Editing by Nicole Bleier.

Ansell Grimm & Aaron’s Litigation Department: Year in Review

Posted on December 23rd, 2020

As the world struggled to face the coronavirus pandemic, and millions of small businesses were 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 Anthony D’Artiglio, Rahool Patel, Seth Rosenstein and, our newest member, Ashley Whitney, the Department is pleased to share its numerous successes.

COVID-19 Litigation
Ansell Grimm & Aaron represented 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 our clients.

Class Action Litigation
Ansell Grimm & Aaron successfully obtained a transfer of venue in a nationwide class action originally venued in the Northern District of California.  Plaintiff brought claims related to the sale of beauty products against the seller, shipper, and a host of individuals and entities.  We successfully asserted that the shipping entity and a related individual should be severed and dismissed from the action, paving the way for a transfer of venue to the District of New Jersey for the remaining Defendants.  We subsequently filed a Motion to Dismiss in the District of New Jersey asserting that the Court lacks subject matter jurisdiction as a result of a pre-litigation refund offer and that the Amended Complaint is an impermissible “shotgun” pleading which is overlong, unintelligible, and impermissibly asserts collective rather than individual allegations of wrongdoing against all Defendants.  The Motion to Dismiss remains pending.

Cannabis Litigation
In Washington v. Barr, the Firm filed a pro-bono amicus brief in the United States Supreme Court on behalf of several non-profit organizations representing former national and international professional athletes in support of a constitutional challenge to the federal government’s continued refusal to remove marijuana from Schedule I of the Controlled Substances Act, even though millions of Americans use marijuana on a regular basis to manage debilitating health conditions in accordance with State, territorial, and local laws. Unfortunately, with the passing of Justice Ginsberg, petitioners were unable to secure the four votes necessary to secure review.

In an appeal challenging the New Jersey Department of Health’s administrative process with respect to its 2018 Request for Applications to operate medicinal marijuana alternative treatment centers, the Appellate Division issued a momentous 75-page decision vacating the Department’s disqualification decisions and remanding for further proceedings because the Department failed to provide any cogent explanation for the vast scoring discrepancies observed.

In several appeals challenging the technological failure of the New Jersey Department of Health’s online submission portal for its 2019 Request for Applications to operate medicinal marijuana alternative treatment centers, the Appellate Division issued a stay enjoining the Department from any further administrative action, including scoring and ranking applications, and issuing licenses.  The Court later denied a motion by the Department to vacate the stay.  At the present time, the appeals are fully briefed and scheduled for oral argument on February 2, 2020.

Judgement Enforcement & Defense
A matter of interest in 2020 concerned litigation initiated by the State of New Jersey’s Uninsured Employer’s Fund against the former owner of a New Jersey business.  For years, the State’s outside counsel “litigated by default” an action against an entirely different individual (albeit, with the same last name), with a different address and different social security number having failed to afford our client any notice of the action whatsoever permitting him to defend.  The State subsequently sought to enforce a Judgment against our client, going as far as levying escrow funds from the sale of the client’s home.

Upon retention, the Firm worked vigorously to oppose the turnover of funds from escrow and mark the judgment as satisfied, and cross-moved to vacate the default judgment.  Our efforts resulted in justice for the client, by way of vacating default judgment, the issuance of an Order directing the State to promptly return the seized funds to escrow, and ultimately the return of the subject funds to our client.

Police Benevolent Association Legal Protection
The Firm is appealing the termination of a police officer with no prior discipline record who consistently held the department record for summonses, DUIs, and arrests, for alleged Criminal Justice Information Services violations by way of excessive full-disclosure search on his patrol car’s Mobile Data Terminal, despite its failure to identify a single full-disclosure search conducted without justification.  The matter is slated for oral argument this month.

Ms. Whitney also utilized her years of representation of police officers to join the Firm’s criminal defense attorneys, Mitchell Ansell and Kevin Clark, on the PBA Legal Protection Plan’s list of approved attorneys in order to offer additional representation through the Firm’s Woodland Park office.

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