New NJ bill could speed up approvals for cannabis dispensaries

NJ Monitor

A new bill would allow medical cannabis dispensaries to begin selling recreational weed without municipal approval, a sign that state lawmakers are seeking to push back on some towns’ resistance to hosting dispensaries.

The legislation, sponsored by Senate President Nicholas Scutari, includes a number of other provisions aimed at the state’s cannabis industry, including one that would allow medical cannabis dispensaries to redesignate their product for recreational sales. But its aim to allow medical dispensaries to shift to the recreational market without municipal approval is the one that could raise the hackles of some local officials opposed to cannabis sales.

New Jersey’s recreational cannabis law allowed towns to opt in or out of sales by August 2021, and most of them opted out. Only about a third of New Jersey’s 564 municipalities allow cannabis businesses, and some of those towns limit sales to medical cannabis only. Five of New Jersey’s roughly 200 dispensaries sell only medical cannabis, according to the state Cannabis Regulatory Commission.

Joshua Bauchner, attorney and chair of the cannabis, hemp, and psychedelics practice group at Mandelbaum Barrett in Roseland, said the bill appears to be lawmakers’ response to struggles the cannabis industry in New Jersey has faced because of the municipal approval process.

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New bill could speed up approvals for cannabis dispensaries

The Bill – sorry no pdf the NJ govt does not provide that option

https://www.njleg.state.nj.us/bill-search/2024/S4074/bill-text?f=S4500&n=4074_I1

Bill S4074

Session 2024 – 2025

SENATE, No. 4074

STATE OF NEW JERSEY

221st LEGISLATURE

INTRODUCED JANUARY 30, 2025

Sponsored by:

Senator NICHOLAS P. SCUTARI

District 22 (Somerset and Union)

SYNOPSIS

Makes certain changes related to application and licensing for sale of cannabis, Cannabis Regulatory Commission activity, municipal ordinances, and alternative treatment centers.

CURRENT VERSION OF TEXT

As introduced.

An Act concerning cannabis regulation, amending P.L.2019, c.153 and P.L.2021, c.16 and supplementing Title 24 of the Revised Statutes.

Be It Enacted by the Senate and General Assembly of the State of New Jersey:

Section 11 of P.L.2019, c.153 (C.24:6I-7.1) is amended to read as follows:
a. The commission shall, no later than 90 days after the effective date of P.L.2019, c.153 (C.24:6I-5.1 et al.) or upon adoption of rules and regulations as provided in subsection c. of section 18 of P.L.2009, c.307 (C.24:6I-16), whichever occurs later, begin accepting and processing applications for new medical cannabis cultivator, medical cannabis manufacturer, and medical cannabis dispensary permits. Notwithstanding the provisions of subsubparagraph (i) of subparagraph (a) of paragraph (2) of subsection a. of section 7 of P.L.2009, c.307 (C.24:6I-7), the first three alternative treatment center permits issued by the commission pursuant to an application submitted on or after the effective date of P.L.2019, c.153 (C.24:6I-5.1 et al.) and up to four alternative treatment centers permits issued by the commission after the effective date of P.L.2019, c.153 (C.24:6I-5.1 et al.) pursuant to an application submitted pursuant to a request for applications published in the New Jersey Register prior to the effective date of P.L.2019, c.153 (C.24:6I-5.1 et al.) shall be deemed to concurrently hold a medical cannabis cultivator permit, a medical cannabis manufacturer permit, and a medical cannabis dispensary permit; of these permits, one permit shall be issued to an applicant located in the northern region of the State, one permit shall be issued to an applicant located in the central region of the State, and one permit shall be issued to an applicant located in the southern region of the State. Any permits issued by the commission thereafter shall be subject to the provisions of subsubparagraph (i) of subparagraph (a) of paragraph (2) of subsection a. of section 7 of P.L.2009, c.307 (C.24:6I-7), and the requirements of subsection d. of this section concerning conditional permits.
The commission may establish nonrefundable application fees for permit applications and conditional permit applications, and permit and conditional permit fees for successful applicants.
(1) The commission shall make a determination as to any permit application, other than an application for a conditional permit submitted pursuant to subsection d. of this section, no later than 90 days after receiving the application, which may include a determination that the commission reasonably requires more time to adequately review the application. If the commission determines that more time is required to adequately review an application, the commission shall, not more than 30 days after a determination for more time for review, make a determination as to whether the application is approved or denied.

(2) The commission shall issue a permit, other than a conditional permit, to an approved applicant at such time as the commission completes the application review process and any mandatory inspections, and determines that the applicant is in compliance with and is implementing the plans, procedures, protocols, actions, or other measures set forth in the applicant’s permit application submitted pursuant to section 12 of P.L.2019, c.153 (C.24:6I-7.2), did maintain compliance with the terms, conditions, or restrictions of a conditional permit issued to the applicant, if applicable, and is otherwise in compliance with the requirements of P.L.2009, c.307 (C.24:6I-1 et al.).

(1) The commission shall ensure that at least one third of the total permits issued for each type of medical cannabis permit are conditional permits, which one-third figure shall include any conditional permit issued to an applicant which is subsequently converted by the commission into a full permit pursuant to paragraph (4) of this subsection and any conditional permit, including a converted permit, issued to a microbusiness pursuant to subsection e. of this section. The requirements of this subsection shall not apply to permits issued to clinical registrants or to permits issued to the three alternative treatment centers issued a permit pursuant to subsection a. of this section that are expressly exempt from the provisions of subsubparagraph (i) of subparagraph (a) of paragraph (2) of subsection a. of section 7 of P.L.2009, c.307 (C.24:6I-7).

(2) An application for a conditional permit shall include:

(a) documentation that the applicant entity includes at least one significantly involved person who has resided in this State for at least two years as of the date of the application;

(b) a list of all owners, officers, directors, and employees of, and significantly involved persons in, the proposed medical cannabis entity, including their names, addresses, dates of birth, resumes, and a photocopy of their driver’s licenses or other government-issued form of identification;

(c) a criminal history record background check completed pursuant to subsection d. of section 7 of P.L.2009, c.307 (C.24:6I-7) for each owner, officer, director, and employee of, and each significantly involved person in, the proposed medical cannabis entity, provided that a conditional permit may be issued pending the results of a criminal history record background check;

(d) documentation that each significantly involved person in the proposed medical cannabis entity has, for the immediately preceding taxable year, an adjusted gross income of no more than $200,000 or no more than $400,000 if filing jointly with another;

(e) a certification that each significantly involved person in the proposed medical cannabis entity does not have any financial interest in an entity applying for any other medical cannabis permit, or in an entity that currently holds a permit issued pursuant to section 7 of P.L.2009, c.307 (C.24:6I-7);

(f) the federal and State tax identification numbers for the proposed medical cannabis entity, and proof of business registration with the Division of Revenue in the Department of the Treasury;

(g) information about the proposed medical cannabis entity, including its legal name, any registered alternate name under which it may conduct business, and a copy of its articles of organization and bylaws;

(h) the business plan and management operation profile for the proposed medical cannabis entity;

(i) the plan by which the applicant intends to obtain appropriate liability insurance coverage for the proposed medical cannabis entity; and

(j) any other requirements established by the commission pursuant to regulation.

(3) The commission shall make a determination on an application for a conditional permit within 30 days after the date the application is received. A determination made pursuant to this paragraph may include a determination that the commission requires more time to adequately review the application. If the commission determines that more time is required to adequately review an application, the commission shall, not more than 30 days after a determination for more time for review, make a determination as to whether the application is approved or denied. The commission shall approve a permit application that meets the requirements of this subsection unless the commission finds by clear and convincing evidence that the applicant would be manifestly unsuitable to perform the activities authorized for the permit sought by the applicant. The commission shall deny a conditional permit to any applicant who fails to provide information, documentation, and assurances as required by this subsection; who fails to reveal any fact material to qualification; or who supplies information that is untrue or misleading as to a material fact pertaining to the qualification criteria for issuance of a conditional permit. If the application is denied, the commission shall notify the applicant in writing of the specific reason for its denial and provide the applicant with the opportunity for a hearing in accordance with the “Administrative Procedure Act,” P.L.1968, c.410 (C.52:14B-1 et seq.).

(4) The commission shall furnish to each entity issued a conditional permit a list of the requirements that the entity will be required to comply with within 120 days after issuance of the conditional permit. If the commission subsequently determines that, during the 120-day period, the conditional permit holder is in compliance with all applicable conditions and is implementing the plans, procedures, protocols, actions, or other measures set forth in its application, the commission shall convert the conditional permit into a full permit, which will expire one year from its date of issuance and be subject to annual renewal; if the commission determines that the conditional permit holder is not in compliance with all applicable conditions or not implementing the plans, procedures, protocols, actions, or other measures set forth in its application, the conditional permit shall automatically expire at the end of the 120-day period, or, at the discretion of the commission, may be revoked prior to the end of the 120-day period.

(5) A conditional permit issued pursuant this subsection may not be sold or transferred.

(1) The commission shall ensure that at least 10 percent of the total permits issued for each medical cannabis permit type, other than a clinical registrant permit, are designated for and only issued to microbusinesses, and that at least 25 percent of the total permits issued be issued to microbusinesses. A microbusiness may be issued a full annual permit pursuant to section 7 of P.L.2009, c.307 (C.24:6I-7) or a conditional permit pursuant to subsection d. of this section. The maximum fee assessed by the commission for issuance or renewal of a permit issued to a microbusiness shall be no more than half the fee applicable to a permit of the same type issued to a person or entity that is not a microbusiness. A permit issued to a microbusiness shall be valid for one year and may be renewed annually.

(2) A microbusiness shall meet the following requirements:

(a) 100 percent of the ownership interest in the microbusiness shall be held by current New Jersey residents who have resided in the State for at least the past two consecutive years;

(b) at least 51 percent of the owners, directors, officers, and employees of the microbusiness shall be residents of the municipality in which the microbusiness is or will be located, or a municipality bordering the municipality in which the microbusiness is or will be located;

(c) the microbusiness shall employ no more than 10 employees at one time, inclusive of any owners, officers, and directors of the microbusiness;

(d) the microbusiness shall not exceed the following size and capacity restrictions:

(i) the entire microbusiness facility shall occupy an area of no more than 2,500 square feet;

(ii) in the case of a microbusiness that is a medical cannabis cultivator, the total medical cannabis grow area shall not exceed 2,500 square feet, measured on a horizontal plane, shall grow no higher than 24 feet above that plane, and shall possess a total of no more than 1,000 plants, including mature and immature medical cannabis plants, but not including seedlings;

(iii) in the case of a microbusiness that is a medical cannabis manufacturer, the manufacturer shall acquire and process no more than 1,000 pounds of medical cannabis in dried form each month; and

(iv) in the case of a microbusiness that is a medical cannabis dispensary, the dispensary shall acquire no more than 1,000 pounds of medical cannabis in dried form, or the equivalent amount in any other form, or any combination thereof, for dispensing to or on behalf of registered qualifying patients each month; and

(e) the microbusiness shall comply with such other requirements as may be established by the commission by regulation.

(3) The requirements of this subsection shall not apply to permits issued pursuant to an application submitted pursuant to a request for applications published in the New Jersey Register prior to the effective date of P.L.2019, c.153 (C.24:6I-5.1 et al.).

The commission shall have the authority to review any services agreement submitted pursuant to subsection l. of section 12 of P.L.2019, c.153 (C.24:6I-7.2), and any agreement established under subsubparagraph (ii) of subparagraph (d) of paragraph (2) of subsection a. of section 7 of P.L.2009, c.307 (C.24:6I-7) to provide significant financial or technical assistance or the significant use of intellectual property to an applicant, to determine whether the terms of the agreement, including interest rates, returns, and fees, are commercially reasonable and consistent with the fair market value for the terms generally applicable to agreements of a comparable nature. In the event the commission determines the terms of an agreement are not commercially reasonable or consistent with the fair market value generally applicable to the services to be provided under the agreement, the commission shall have the authority to withhold approval of the permit application until the parties renegotiate a new agreement that, as determined by the commission, is commercially reasonable and consistent with the fair market value for the terms generally applicable to agreements of a comparable nature. The parties to the agreement may request that the commission provide guidance as to what terms it would find to be commercially reasonable and consistent with the fair market value generally applicable to agreements of a comparable nature. Nothing in this subsection shall be construed to require the commission to award a permit to an applicant if the commission determines the applicant does not otherwise meet the requirements for issuance of the permit.

(cf: P.L.2021, c.252, s.2)

Section 13 of P.L.2019, c.153 (C.24:6I-7.3) is amended to read as follows:
a. The commission shall issue clinical registrant permits to qualified applicants that meet the requirements of this section. In addition to any other requirements as the commission establishes by regulation regarding application for and issuance of a clinical registrant permit, each clinical registrant applicant shall:

(1) complete a criminal history record background check that meets the requirements of subsection d. of section 7 of P.L.2009, c.307 (C.24:6I-7);

(2) submit to the commission any required application and permit fees;

(3) submit to the commission written documentation of an existing contract with an academic medical center that meets the requirements of subsection c. of this section; and

(4) submit to the commission documentation that the applicant has a minimum of $15 million in capital.

The commission shall, no later than 90 days after the effective date of P.L.2019, c.153 (C.24:6I-5.1 et al.) or upon adoption of rules and regulations as provided in subsection c. of section 18 of P.L.2009, c.307 (C.24:6I-16), whichever occurs first, begin accepting and processing applications for five clinical registrant permits. Thereafter, the commission shall accept applications for and issue such additional clinical registrant permits as it determines to be necessary and consistent with the provisions of P.L.2009, c.307 (C.24:6I-1 et al.). The commission shall make a determination as to a clinical registrant permit application no later than 90 days after receiving the application, which may include a determination that the commission reasonably requires more time to adequately review the application. If the commission determines that more time is required to adequately review an application, the commission shall, not more than 30 days after a determination for more time for review, make a determination as to whether the application is approved or denied.

In reviewing and approving applications for clinical registrant permits, the commission shall seek to incorporate the policies, practices, protocols, standards, and criteria developed by the Office of Minority, Disabled Veterans, and Women Cannabis Business Development pursuant to section 32 of P.L.2019, c.153 (C.24:6I-25) to promote participation in the medical cannabis industry by persons from socially and economically disadvantaged communities. In no case shall the commission accept, process, or approve an application submitted by an applicant that has contracted with an academic medical center that is part of a health care system that includes another academic medical center that has contracted with an applicant for, or a holder of, a clinical registrant permit.

A contract between a clinical registrant and an academic medical center shall include a commitment by the academic medical center, or its affiliate, to engage in or oversee clinical research related to the use or adverse effects of cannabis in order to advise the clinical registrant concerning patient health and safety, medical applications, dispensing and management of controlled substances, and ways to mitigate adverse health or societal effects of adult, personal use legalization, among other areas. A clinical registrant issued a permit pursuant to this section shall have a written contractual relationship with no more than one academic medical center.
A clinical registrant issued a permit pursuant to this section shall be authorized to engage in all conduct involving the cultivation, manufacturing, and dispensing of medical cannabis as is authorized for an entity holding medical cannabis cultivator, medical cannabis manufacturer, and medical cannabis dispensary permits pursuant to P.L.2009, c.307 (C.24:6I-1 et al.), including dispensing medical cannabis and medical cannabis products to qualifying patients and designated and institutional caregivers. The clinical registrant shall additionally be authorized to engage in clinical research involving medical cannabis using qualifying patients who consent to being part of such research, subject to any restrictions established by the commission.
(1) A clinical registrant issued a permit pursuant to this section may conduct authorized activities related to medical cannabis at more than one physical location, provided that each location is approved by the commission and is in the same region in which the academic medical center with which the clinical registrant has a contract is located.

(2) A clinical registrant may apply to the commission for approval to relocate an approved facility to another location in the same region, which application shall be approved unless the commission makes a specific determination that the proposed relocation would be inconsistent with the purposes of P.L.2009, c.307 (C.24:6I-1 et al.). The denial of an application for relocation submitted pursuant to this paragraph shall be considered a final agency decision, subject to review by the Appellate Division of the Superior Court.

(3) The commission may authorize a clinical registrant to dispense medical cannabis and medical cannabis products from more than one physical location if the commission determines that authorizing additional dispensing locations is necessary for the clinical registrant to best serve and treat qualifying patients and clinical trial participants.

(4) In no case shall a clinical registrant operate or be located on land that is valued, assessed or taxed as an agricultural or horticultural use pursuant to the “Farmland Assessment Act of 1964,” P.L.1964, c.48 (C.54:4-23.1 et seq.).

A clinical registrant permit shall not be sold or transferred to any other entity.
Clinical registrant permits shall be valid for the term of the contractual relationship between the academic medical center and the clinical registrant. The commission may renew a clinical registrant permit to correspond to any renewal of the contractual relationship between the academic medical center and the clinical registrant.
Each clinical registrant shall submit the results of the clinical research obtained through an approved clinical registrant permit to the commission no later than one year following the conclusion of the research study or publication of the research study in a peer-reviewed medical journal. Nothing in this subsection shall be deemed to require the disclosure of any clinical research that would infringe on the intellectual property of the clinical registrant or on the confidentiality of patient information.
Application materials submitted to the commission pursuant to this section shall not be considered a public record pursuant to P.L.1963, c.73 (C.47:1A-1 et seq.), P.L.2001, c.404 (C.47:1A-5 et al.), or the common law concerning access to records.

(cf: P.L.2021, c.16, s.17)

Section 19 of P.L.2021, c.16 (C.24:6I-36) is amended to read as follows:
Application For License or Conditional License.
Each application for an annual license to operate a cannabis establishment, distributor, or delivery service, or conditional license for a proposed cannabis establishment, distributor, or delivery service, shall be submitted to the commission. A separate license or conditional license shall be required for each location at which a cannabis establishment seeks to operate, or for the location of each premises from which a cannabis distributor or delivery service seeks to operate. Renewal applications for another annual license shall be filed no later than 90 days prior to the expiration of the establishment’s, distributor’s, or delivery service’s license. A conditional license shall not be renewed, but replaced with an annual license upon the commission’s determination of qualification for the annual license, or otherwise expire, as set forth in paragraph (2) of subsection b. of this section.
(1) Regarding the application for and issuance of annual licenses, the commission shall:

(a) begin accepting and processing applications within 30 days after the commission’s initial rules and regulations have been adopted pursuant to subparagraph (a) of paragraph (1) of subsection d. of section 6 of P.L.2021, c.16 (C.24:6I-34);

(b) forward, within 14 days of receipt, a copy of each application to the municipality in which the applicant desires to operate the cannabis establishment, distributor, or delivery service; and

(c) verify the information contained in the application and review the qualifications for the applicable license class, set forth in section 20, 22, 23, 24, 25, or 26 of P.L.2021, c.16 (C.24:6I-37, C.24:6I-39, C.24:6I-40, C.24:6I-41, C.24:6I-42, or C.24:6I-43), and regulations concerning qualifications for licensure promulgated by the commission for which the applicant seeks licensure, and not more than 90 days after the receipt of an application, make a determination as to whether the application is approved or denied, or that the commission requires more time to adequately review the application. If the commission determines that more time is required to adequately review an application, the commission shall, not more than 30 days after a determination for more time for review, make a determination as to whether the application is approved or denied.

The commission shall deny a license application to any applicant who fails to provide information, documentation and assurances as required by P.L.2021, c.16 (C.24:6I-31 et al.) or as requested by the commission, or who fails to reveal any material fact to qualification, or who supplies information which is untrue or misleading as to a material fact pertaining to the qualification criteria for licensure. The commission shall approve a license application that meets the requirements of this section unless the commission finds by clear and convincing evidence that the applicant would be manifestly unsuitable to perform the activities for the applicable license class for which licensure is sought.

(i) If the application is approved, upon collection of the license fee, the commission shall issue an annual license to the applicant no later than 30 days after giving notice of approval of the application unless the commission finds the applicant is not in compliance with regulations for annual licenses enacted pursuant to the provisions of paragraph (1) of subsection d. of section 6 of P.L.2021, c.16 (C.24:6I-34) or the commission is notified by the relevant municipality that the applicant is not in compliance with ordinances and regulations made pursuant to the provisions of section 31 of P.L.2021, c.16 (C.24:6I-45) and in effect at the time of application, provided, if a municipality has enacted a numerical limit on the number of cannabis establishments, distributors, or delivery services and a greater number of applicants seek licenses, the commission shall solicit and consider input from the municipality as to the municipality’s preference or preferences for licensure.

(ii) If the application is denied, the commission shall notify the applicant in writing of the specific reason for its denial, and provide the applicant with the opportunity for a hearing in accordance with the “Administrative Procedure Act, P.L.1968, c.410 (C.52:14B-1 et seq.).

(2) Regarding the application for and issuance of conditional licenses, the commission shall:

(a) begin accepting and processing applications from applicants within 30 days after the commission’s initial rules and regulations have been adopted pursuant to subparagraph (a) of paragraph (1) of subsection d. of section 6 of P.L.2021, c.16 (C.24:6I-34), and ensure that at least 35 percent of the total licenses issued for each class of cannabis establishment, and for cannabis distributors and delivery services, are conditional licenses, which 35 percent figure shall also include any conditional license issued to an applicant which is subsequently replaced by the commission with an annual license due to that applicant’s compliance for the annual license pursuant to subsubparagraph (i) of subparagraph (d) of this paragraph;

(b) forward, within 14 days of receipt, a copy of each application to the municipality in which the applicant desires to operate a proposed cannabis establishment, or to the municipality in which the premises is located from which the applicant desires to operate a proposed cannabis distributor or delivery service; and

(c) verify the information contained in the application and review the following qualifications for a conditional license:

(i) that the application include at least one significantly involved person who has resided in this State for at least two years as of the date of the application;

(ii) a listing included with the application, showing all persons with a financial interest who also have decision making authority for the proposed cannabis establishment, distributor, or delivery service detailed in the application;

(iii) proof that the significantly involved person and any other person with a financial interest who also has decision making authority for the proposed cannabis establishment, distributor, or delivery service is 21 years of age or older;

(iv) the name, address, date of birth, and resumes of each executive officer, all significantly involved persons, and persons with a financial interest who also have decision making authority for the proposed cannabis establishment, distributor, or delivery service, as well as a photocopy of their driver’s licenses or other government-issued form of identification, plus background check information in a form and manner determined by the commission in consultation with the Superintendent of State Police; concerning the background check, an application shall be denied if any person has any disqualifying conviction pursuant to subparagraph (c) of paragraph (4) of subsection a. of section 20, 22, 23, 24, 25 or 26 of P.L.2021, c.16 (C.24:6I-37, C.24:6I-39, C.24:6I-40, C.24:6I-41, C.24:6I-42, or C.24:6I-43), based upon the applicable class of cannabis establishment for which the application was submitted, or based upon the application being for a cannabis distributor or delivery service, unless the commission determines pursuant to subsubparagraph (ii) of those subparagraphs that the conviction should not disqualify the application;

(v) proof that each person with a financial interest who also has decision making authority for the proposed cannabis establishment, distributor, or delivery service has, for the immediately preceding taxable year, an adjusted gross income of no more than $200,000 or no more than $400,000 if filing jointly with another;

(vi) a certification that each person with a financial interest who also has decision making authority for the proposed cannabis establishment, distributor, or delivery service does not have any financial interest in an application for an annual license under review before the commission or a cannabis establishment, distributor, or delivery service that is currently operating with an annual license;

(vii) the federal and State tax identification numbers for the proposed cannabis establishment, distributor, or delivery service, and proof of business registration with the Division of Revenue in the Department of the Treasury;

(viii) information about the proposed cannabis establishment, distributor, or delivery service including its legal name, any registered alternate name under which it may conduct business, and a copy of its articles of organization and bylaws; and

[(ix) the business plan and management operation profile for the proposed cannabis establishment, distributor, or delivery service;] (Deleted by amendment, P.L. , c. ) (pending before the Legislature as this bill)

[(x) the plan by which the applicant intends to obtain appropriate liability insurance coverage for the proposed cannabis establishment, distributor, or delivery service; and] (Deleted by amendment, P.L. , c. )(pending before the Legislature as this bill)

(xi) any other requirements established by the commission pursuant to regulation; and

(d) not more than 30 days after the receipt of an application, make a determination as to whether the application is approved or denied, or that the commission requires more time to adequately review the application. If the commission determines that more time is required to adequately review an application, the commission shall, not more than 30 days after a determination for more time for review, make a determination as to whether the application is approved or denied.

The commission shall deny a conditional license application to any applicant who fails to provide information, documentation and assurances as required by P.L.2021, c.16 (C.24:6I-31 et al.) or as requested by the commission, or who fails to reveal any material fact to qualification, or who supplies information which is untrue or misleading as to a material fact pertaining to the qualification criteria for licensure. The commission shall approve a license application that meets the requirements of this section unless the commission finds by clear and convincing evidence that the applicant would be manifestly unsuitable to perform the activities for the applicable license class for which conditional licensure is sought.

(i) If the application is approved, upon collection of the conditional license fee, the commission shall issue a conditional license to the applicant, which is non-transferable for its duration, no later than 30 days after giving notice of approval of the application, unless the commission finds the applicant is not in compliance with regulations for conditional licenses enacted pursuant to the provisions of paragraph (1) of subsection d. of section 6 of P.L.2021, c.16 (C.24:6I-34) or the commission is notified by the relevant municipality that the applicant is not in compliance with ordinances and regulations made pursuant to the provisions of section 31 of P.L.2021, c.16 (C.24:6I-45) and in effect at the time of application, provided, if a municipality has enacted a numerical limit on the number of marijuana cannabis establishments, distributors, or delivery services and a greater number of applicants seek licenses, the commission shall solicit and consider input from the municipality as to the municipality’s preference or preferences for licensure. For each license issued, the commission shall also provide the approved licensee with documentation setting forth the remaining conditions to be satisfied under section 20, 22, 23, 24, 25, or 26 of P.L.2021, c.16 (C.24:6I-37, C.24:6I-39, C.24:6I-40, C.24:6I-41, C.24:6I-42, or C.24:6I-43), or relevant regulations, based upon the applicable class of cannabis establishment for which the conditional license was issued, or based upon the conditional license issued for a cannabis distributor or delivery service, and which were not already required for the issuance of that license, to be completed within 120 days of issuance of the conditional license, which period may be extended upon request to the commission for [an] additional [period] periods [of up to 45 days] at the discretion of the commission. If the commission subsequently determines during that 120-day period, or during any additional period granted, that the conditional licensee is in compliance with all applicable conditions and is implementing the plans, procedures, protocols, actions, or other measures set forth in its application, the commission shall replace the conditional license by issuing an annual license, which will expire one year from its date of issuance; if the conditional licensee is not in compliance with all applicable conditions or not implementing the plans, procedures, protocols, actions, or other measures set forth in its application, the conditional license shall automatically expire at the end of the 120-day period, or at the end of any additional period granted by the commission;

(ii) If the application is denied, the commission shall notify the applicant in writing of the specific reason for its denial, provide with this written notice a refund of 80 percent of the application fee submitted with the application, and provide the applicant with the opportunity for a hearing in accordance with the “Administrative Procedure Act,” P.L.1968, c.410 (C.52:14B-1 et seq.);

The commission shall require all applicants for cannabis licenses, other than applicants for a conditional license for any class of cannabis establishment, or for a cannabis distributor or delivery service, or for either a conditional or annual license for an establishment, distributor, or delivery service that is a microbusiness pursuant to subsection f. of this section, to submit an attestation signed by a bona fide labor organization stating that the applicant has entered into a labor peace agreement with such bona fide labor organization. The maintenance of a labor peace agreement with a bona fide labor organization by a licensed cannabis establishment, distributor, or delivery service, other than an establishment that is a microbusiness, shall be an ongoing material condition of the establishment’s, distributor’s, or delivery service’s license. The submission of an attestation and maintenance of a labor peace agreement with a bona fide labor organization by an applicant issued a conditional license for a cannabis establishment, distributor, or delivery service, other than an establishment that is a microbusiness, shall be a requirement for final approval for an annual license. Failure to enter, or to make a good faith effort to enter, into a collective bargaining agreement within 200 days of the opening of a licensed cannabis establishment, distributor, or delivery service, other than an establishment that is a microbusiness, shall result in the suspension or revocation of the establishment’s, distributor’s, or delivery service’s license.

As used in this subsection, “bona fide labor organization” means a labor organization of any kind or employee representation committee, group, or association, in which employees participate and which exists and is constituted for the purpose, in whole or in part, of collective bargaining or otherwise dealing with medical or personal use cannabis employers concerning grievances, labor disputes, terms or conditions of employment, including wages and rates of pay, or other mutual aid or protection in connection with employment, and may be characterized by: it being a party to one or more executed collective bargaining agreements with medical or personal use cannabis employers, in this State or another state; it having a written constitution or bylaws in the three immediately preceding years; it filing the annual financial report required of labor organizations pursuant to subsection (b) of 29 U.S.C. s.431, or it having at least one audited financial report in the three immediately preceding years; it being affiliated with any regional or national association of unions, including but not limited to state and federal labor councils; or it being a member of a national labor organization that has at least 500 general members in a majority of the 50 states of the United States.

(1)[Each license application shall be scored and reviewed based upon a point scale with the commission determining the amount of points, the point categories, and the system of point distribution by regulation. The commission shall assign points and rank applicants according to the point system. The commission may, pursuant to a process set forth in regulation and consistent with this subsection, adjust the point system or utilize a separate point system and rankings with respect to the review of an application for which a conditional license is sought, or for which a microbusiness license is sought. If two or more eligible applicants have the same number of points, those applicants shall be grouped together and, if there are more eligible applicants in this group than the remaining number of licenses available, the commission shall utilize a public lottery to determine which applicants receive a license or conditional license, as the case may be.] (Deleted by amendment, P.L. , c. ) (pending before the Legislature as this bill).

(a) An initial application for licensure shall be evaluated according to criteria to be developed by the commission. [There shall be included bonus points for applicants who are residents of New Jersey.]

(b) The criteria to be developed by the commission pursuant to subparagraph (a) of this paragraph [shall] may include, in addition to the criteria set forth in subparagraphs (c) and (d) of this paragraph and any other criteria developed by the commission, an analysis of the applicant’s operating plan, excluding safety and security criteria, which [shall] may include the following:

(i) In the case of an applicant for a cannabis cultivator license, the operating plan summary shall include a written description concerning the applicant’s qualifications for, experience in, and knowledge of each of the following topics:

– cultivation of cannabis;

– conventional horticulture or agriculture, familiarity with good agricultural practices, and any relevant certifications or degrees;

– quality control and quality assurance;

– recall plans;

– packaging and labeling;

– inventory control and tracking software or systems for the production of personal use cannabis;

– analytical chemistry and testing of cannabis;

– water management practices;

– odor mitigation practices;

– onsite and offsite recordkeeping;

– strain variety and plant genetics;

– pest control and disease management practices, including plans for the use of pesticides, nutrients, and additives;

– waste disposal plans; and

– compliance with applicable laws and regulations.

(ii) In the case of an applicant for a cannabis manufacturer license, or, as applicable, a cannabis wholesaler license, cannabis distributor license, or cannabis delivery service license, the commission may require that the operating plan summary [shall] include a written description concerning the applicant’s qualifications for, experience in, and knowledge of each of the following topics:

– manufacture and creation of cannabis products using appropriate extraction methods, including intended use and sourcing of extraction equipment and associated solvents or intended methods and equipment for non-solvent extraction;

– quality control and quality assurance;

– recall plans;

– packaging and labeling;

– inventory control and tracking software or systems for the manufacturing, warehousing, transportation, or delivery of cannabis and cannabis items;

– analytical chemistry and testing of cannabis items;

– water management practices;

– odor mitigation practices;

– onsite and offsite recordkeeping;

– a list of product formulations or products proposed to be manufactured with estimated cannabinoid profiles, if known, including varieties with high cannabidiol content;

– intended use and sourcing of all non-cannabis ingredients used in the manufacture and creation of cannabis products, including methods to verify or ensure the safety and integrity of those ingredients and their potential to be or contain allergens;

– waste disposal plans; and

– compliance with applicable laws and regulations.

(iii) In the case of an applicant for a cannabis retailer license, the commission may require that the operating plan summary [shall] include a written description concerning the applicant’s qualifications for, experience in, and knowledge of each of the following topics:

– sales of cannabis items to consumers;

– cannabis product evaluation procedures;

– recall plans;

– packaging and labeling;

– inventory control and point-of-sale software or systems for the sale of cannabis items;

– the routes of administration, strains, varieties, and cannabinoid profiles of cannabis and cannabis items;

– odor mitigation practices;

– onsite and offsite recordkeeping;

– waste disposal plans; and

– compliance with applicable laws and regulations.

(c) The criteria to be developed by the commission pursuant to subparagraph (a) of this paragraph [shall] may include, in addition to the criteria set forth in subparagraphs (b) and (d) of this paragraph and any other criteria developed by the commission, an analysis of the following factors, if applicable:

(i) The applicant’s environmental impact plan.

(ii) A summary of the applicant’s safety and security plans and procedures, which shall include descriptions of the following:

– plans for the use of security personnel, including contractors;

– the experience or qualifications of security personnel and proposed contractors;

– security and surveillance features, including descriptions of any alarm systems, video surveillance systems, and access and visitor management systems, along with drawings identifying the proposed locations for surveillance cameras and other security features;

– plans for the storage of cannabis and cannabis items, including any safes, vaults, and climate control systems that will be utilized for this purpose;

– a diversion prevention plan;

– an emergency management plan;

– procedures for screening, monitoring, and performing criminal history record background checks of employees;

– cybersecurity procedures;

– workplace safety plans and the applicant’s familiarity with federal Occupational Safety and Health Administration regulations;

– the applicant’s history of workers’ compensation claims and safety assessments;

– procedures for reporting adverse events; and

– a sanitation practices plan.

(iii) A summary of the applicant’s business experience, including the following, if applicable:

– the applicant’s experience operating businesses in highly-regulated industries;

– the applicant’s experience in operating cannabis establishments or alternative treatment centers and related cannabis production, manufacturing, warehousing, or retail entities, or experience in operating cannabis distributors or delivery services, under the laws of New Jersey or any other state or jurisdiction within the United States; and

– the applicant’s plan to comply with and mitigate the effects of 26 U.S.C. s.280E on cannabis businesses, and for evidence that the applicant is not in arrears with respect to any tax obligation to the State.

[In evaluating the experience described under this subsubparagraph, the commission shall afford the greatest weight to the experience of the applicant itself, controlling owners, and entities with common ownership or control with the applicant; followed by the experience of those with a 15 percent or greater ownership interest in the applicant’s organization; followed by significantly involved persons in the applicant’s organization; followed by other officers, directors, and current and prospective employees of the applicant who have a bona fide relationship with the applicant’s organization as of the date of the application.]

(iv) A description of the proposed location for the applicant’s site, including the following, if applicable:

– the proposed location, the surrounding area, and the suitability or advantages of the proposed location, along with a floor plan and optional renderings or architectural or engineering plans;

– the submission of zoning approvals for the proposed location, which shall consist of a letter or affidavit from appropriate officials of the municipality that the location will conform to local zoning requirements allowing for activities related to the operations of the proposed cannabis cultivator, cannabis manufacturer, cannabis wholesaler, cannabis distributor, cannabis retailer, or cannabis delivery service as will be conducted at the proposed facility; and

– the submission of proof of local support for the suitability of the location, which may be demonstrated by a resolution adopted by the municipality’s governing body indicating that the intended location is appropriately located or otherwise suitable for activities related to the operations of the proposed cannabis cultivator, cannabis manufacturer, cannabis wholesaler, cannabis distributor, cannabis retailer, or cannabis delivery service.

An application for a cannabis retailer shall not include in that application a proposed site that would place the retailer’s premises in or upon any premises in which operates a grocery store, delicatessen, indoor food market, or other store engaging in retail sales of food, or in or upon any premises in which operates a store that engages in licensed retail sales of alcoholic beverages, as defined by subsection b. of R.S.33:1-1; any application presented to the commission shall be denied if it includes that form of proposed site.

Notwithstanding any other provision of this subsubparagraph, an application shall be disqualified from consideration unless it includes documentation demonstrating that the applicant will have final control of the premises upon approval of the application, including, but not limited to, a lease agreement, contract for sale, title, deed, or similar documentation. In addition, if the applicant will lease the premises, the application will be disqualified from consideration unless it includes certification from the landlord that the landlord is aware that the tenant’s use of the premises will involve activities associated with operations as a cannabis cultivator, cannabis manufacturer, cannabis wholesaler, cannabis distributor, cannabis retailer, or cannabis delivery service.

(v) A community impact, social responsibility, and research statement, which may include, but shall not be limited to, the following:

– a community impact plan summarizing how the applicant intends to have a positive impact on the community in which the proposed cannabis establishment, distributor, or delivery service is to be located, which shall include an economic impact plan and a description of outreach activities;

– a written description of the applicant’s record of social responsibility, philanthropy, and ties to the proposed host community;

– a written description of any research the applicant has conducted on the adverse effects of the use of cannabis items, substance use disorder, and the applicant’s participation in or support of cannabis-related research and educational activities; and

– a written plan describing any research and development regarding the adverse effects of cannabis, and any cannabis-related educational and outreach activities, which the applicant intends to conduct if issued a license by the commission.

[In evaluating the information submitted pursuant to this subsubparagraph, the commission shall afford the greatest weight to responses pertaining to the applicant itself, controlling owners, and entities with common ownership or control with the applicant; followed by those with a 15 percent or greater ownership interest in the applicant’s organization; followed by significantly involved persons in the applicant’s organization; followed by other officers, directors, and current and prospective employees of the applicant who have a bona fide relationship with the applicant’s organization as of the date of the application.]

(vi) A workforce development and job creation plan, which may include information on the applicant’s history of job creation and planned job creation at the proposed cannabis establishment, distributor, or delivery service; education, training, and resources to be made available for employees; any relevant certifications; and an optional diversity plan.

(vii) A business and financial plan, which may include, but shall not be limited to, the following:

– an executive summary of the applicant’s business plan;

– a demonstration of the applicant’s financial ability to implement its business plan, which may include, but shall not be limited to, bank statements, business and individual financial statements, net worth statements, and debt and equity financing statements; and

– a description of the applicant’s plan to comply with guidance pertaining to cannabis issued by the Financial Crimes Enforcement Network under 31 U.S.C. s.5311 et seq., the federal “Bank Secrecy Act,” which may be demonstrated by submitting letters regarding the applicant’s banking history from banks or credit unions that certify they are aware of the business activities of the applicant, or entities with common ownership or control with the applicant, in any state where the applicant has operated a business related to personal use or medical cannabis. For the purposes of this subsubparagraph, the commission shall consider only bank references involving accounts in the name of the applicant or of an entity with common ownership or control with the applicant. An applicant who does not submit the information about a plan of compliance with the federal “Bank Secrecy Act” shall not be disqualified from consideration.

(viii) Whether any of the applicant’s majority or controlling owners were previously approved by the commission to serve as an officer, director, principal, or key employee of an alternative treatment center or personal use cannabis establishment, distributor, or delivery service, provided any such individual served in that capacity for six or more months;

(ix) Any other information the commission deems relevant in determining whether to grant a license to the applicant.

(2) In ranking applications, [in addition to the awarding of points as set forth in paragraph (1) of this subsection,] the commission shall give priority to the following, regardless of whether there is any competition among applications for a particular class of license:

(a) Applicants that include a significantly involved person or persons lawfully residing in New Jersey for at least five years as of the date of the application.

(b) Applicants that are party to a collective bargaining agreement with a bona fide labor organization that currently represents, or is actively seeking to represent cannabis workers in New Jersey.

(c) Applicants that are party to a collective bargaining agreement with a bona fide labor organization that currently represents cannabis workers in another state.

(d) Applicants that submit a signed project labor agreement with a bona fide building trades labor organization, which is a form of pre-hire collective bargaining agreement covering terms and conditions of a specific project, including labor issues and worker grievances associated with that project, for the construction or retrofit of the facilities associated with the licensed entity.

(e) Applicants that submit a signed project labor agreement with a bona fide labor organization for any other applicable project associated with the licensed entity.

As used in this paragraph, “bona fide labor organization” means “bona fide labor organization” as defined in subsection c. of this section, and includes a bona fide building trades labor organization.

(3) [In reviewing an initial license application, unless the information is otherwise solicited by the commission in a specific application question, the commission’s evaluation of the application shall be limited to the experience and qualifications of the applicant’s organization, including controlling owners, any entities with common ownership or control with the applicant, those with a 15 percent or greater ownership interest in the applicant’s organization, significantly involved persons in the applicant’s organization, the other officers, directors, and current or prospective employees of the applicant who have a bona fide relationship with the applicant’s organization as of the date of the application, and consultants and independent contractors who have a bona fide relationship with the applicant as of the date of the application. Responses pertaining to applicants who are exempt from the criminal history record background check requirements of P.L.2021, c.16 (C.24:6I-31 et al.) shall not be considered. Each applicant shall certify as to the status of the individuals and entities included in the application.] (Deleted by amendment, P.L. , c. ) (pending before the Legislature as this bill)

(4) [The commission shall give special consideration to any applicant that has entered into an agreement with an institution of higher education to create an integrated curriculum involving the cultivation, manufacturing, wholesaling, distributing, retail sales, or delivery of personal use cannabis or cannabis items, provided that the curriculum is approved by both the commission and the Office of the Secretary of Higher Education and the applicant agrees to maintain the integrated curriculum in perpetuity. An integrated curriculum license shall be subject to revocation if the license holder fails to maintain or continue the integrated curriculum. In the event that, because of circumstances outside a license holder’s control, the license holder will no longer be able to continue an integrated curriculum, the license holder shall notify the commission and shall make reasonable efforts to establish a new integrated curriculum with an institution of higher education, subject to approval by the commission and the Office of the Secretary of Higher Education. If the license holder is unable to establish a new integrated curriculum within six months after the date the current integrated curriculum arrangement ends, the commission shall revoke the entity’s license, unless the commission finds there are extraordinary circumstances that justify allowing the license holder to retain the license without an integrated curriculum and the commission finds that allowing the license holder to retain the license would be consistent with the purposes of P.L.2021, c.16 (C.24:6I-31 et al.). The commission may revise the application and license fees or other conditions for a license pursuant to this paragraph as may be necessary to encourage applications for licensure which involves an integrated curriculum.] (Deleted by amendment, P.L. , c. ) (pending before the Legislature as this bill)

(5) Application materials submitted to the commission pursuant to this section shall not be considered a public record pursuant to P.L.1963, c.73 (C.47:1A-1 et seq.), P.L.2001, c.404 (C.47:1A-5 et al.), or the common law concerning access to government records.

(6) If the commission notifies an applicant that it has performed sufficiently well on multiple applications to be awarded more than one license, the applicant shall notify the commission, within seven business days after receiving such notice, as to which class of license it will accept. [For any license award that is declined by an applicant pursuant to this paragraph, the commission shall, upon receiving notice from the applicant of the declination, award the license to the applicant for that license class who, in the determination of the commission, best satisfies the commission’s criteria while meeting the commission’s determination of Statewide marketplace need.] If an applicant fails to notify the commission as to which license it will accept, the commission shall have the discretion to determine which license it will award to the applicant, based on the commission’s determination of Statewide marketplace need and other applications submitted for cannabis establishments, distributors, or delivery services to be located in the affected regions.

(1) The commission shall also prioritize applications on the basis of impact zones, for which past criminal marijuana enterprises contributed to higher concentrations of law enforcement activity, unemployment, and poverty, or any combination thereof, within parts of or throughout these zones, regardless of whether there is any competition among applications for a particular class of license. An “impact zone” means any municipality that:

(a) has a population of 120,000 or more according to the most recently compiled federal decennial census as of the effective date of P.L.2021, c.16 (C.24:6I-31 et al.);

(b) based upon data for calendar year 2019:

(i) ranks in the top 40 percent of municipalities in the State for marijuana- or hashish-related arrests for violation of paragraph (4) of subsection a. of N.J.S.2C:35-10;

(ii) has a crime index total of 825 or higher based upon the indexes listed in the annual Uniform Crime Report by the Division of State Police; and

(iii) has a local average annual unemployment rate that ranks in the top 15 percent of all municipalities in the State, based upon average annual unemployment rates estimated for the relevant calendar year by the Office of Research and Information in the Department of Labor and Workforce Development;

(c) is a municipality located in a county of the third class, based upon the county’s population according to the most recently compiled federal decennial census as of the effective date of P.L.2021, c.16 (C.24:6I-31 et al.), that meets all of the criteria set forth in subparagraph (b) other than having a crime index total of 825 or higher; or

(d) is a municipality located in a county of the second class, based upon the county’s population according to the most recently compiled federal decennial census as of the effective date of P.L.2021, c.16 (C.24:6I-31 et al.):

(i) with a population of less than 60,000 according to the most recently compiled federal decennial census, that for calendar year 2019 ranks in the top 40 percent of municipalities in the State for marijuana- or hashish-related arrests for violation of paragraph (4) of subsection a. of N.J.S.2C:35-10; has a crime index total of 1,000 or higher based upon the indexes listed in the 2019 annual Uniform Crime Report by the Division of State Police; but for calendar year 2019 does not have a local average annual unemployment rate that ranks in the top 15 percent of all municipalities, based upon average annual unemployment rates estimated for the relevant calendar year by the Office of Research and Information in the Department of Labor and Workforce Development; or

(ii) with a population of not less than 60,000 or more than 80,000 according to the most recently compiled federal decennial census; has a crime index total of 650 or higher based upon the indexes listed in the 2019 annual Uniform Crime Report; and for calendar year 2019 has a local average annual unemployment rate of 3.0 percent or higher using the same estimated annual unemployment rates.

(2) In ranking applications with respect to impact zones, the commission shall give priority to the following:

(a) An application for a cannabis establishment, distributor, or delivery service that is located, or is intended to be located, within an impact zone, and that impact zone has less than two licensees, so that there will be a prioritized distribution of licenses to at least two licensees within each impact zone.

(b) An applicant who is a current resident of an impact zone and has resided therein for three or more consecutive years at the time of making the application. To the extent reasonably practicable, at least 25 percent of the total licenses issued to applicants for a cannabis establishment, distributor, or delivery service license shall be awarded to applicants who have resided in an impact zone for three or more consecutive years at the time of making the application, regardless of where the cannabis establishment, distributor, or delivery service is, or is intended to be, located.

(c) An applicant who presents a plan, attested to, to employ at least 25 percent of employees who reside in an impact zone, of whom at least 25 percent shall reside in the impact zone nearest to the location, or intended location, of the cannabis establishment, distributor, or delivery service; failure to meet the requisite percentages of employees from an impact zone within 90 days of the opening of a licensed cannabis establishment, distributor, or delivery service shall result in the suspension or revocation of a license or conditional license, as applicable, issued based on an application with an impact zone employment plan.

(1) The commission shall ensure that at least 10 percent of the total licenses issued for each class of cannabis establishment, or for cannabis distributors and cannabis delivery services, are designated for and only issued to microbusinesses, and that at least 25 percent of the total licenses issued be issued to microbusinesses. The determination of the percentage for each class of license issued to microbusinesses shall include the number of conditional licenses issued to microbusinesses for each class, as the percentage of conditional licenses issued for each class pursuant to subparagraph (a) of paragraph (2) of subsection b. of this section shall not be mutually exclusive of the percentage of licenses issued to microbusinesses pursuant to this subsection. There shall not be any cap or other numerical restriction on the number of licenses issued to microbusinesses pursuant to P.L.2021, c.16 (C.24:6I-31 et al.), and this prohibition on a cap or other numerical restriction shall apply to every class of license issued. The maximum fee assessed by the commission for issuance or renewal of a license designated and issued to a microbusiness shall be no more than half the fee applicable to a license of the same class issued to a person or entity that is not a microbusiness.

(2) A microbusiness shall meet the following requirements:

(a) 100 percent of the ownership interest in the microbusiness shall be held by current New Jersey residents who have resided in the State for at least the past two consecutive years;

(b) at least 51 percent of the owners, directors, officers, or employees of the microbusiness shall be residents of the municipality in which the microbusiness is located, or to be located, or a municipality bordering the municipality in which the microbusiness is located, or to be located;

(i) employ no more than 10 employees;

(ii) operate a cannabis establishment occupying an area of no more than 2,500 square feet, and in the case of a cannabis cultivator, grow cannabis on an area no more than 2,500 square feet measured on a horizontal plane and grow above that plane not higher than 24 feet; provided, that a cannabis cultivator’s grow space may, if approved by the commission, be part of a larger premises that is owned or operated by a cannabis cultivator that is not a licensed microbusiness, allowing for the sharing of a physical premises and certain business operations, but only the microbusiness cannabis cultivator shall grow cannabis on and above the cultivator’s grow space;

(iii) possess no more than 1,000 cannabis plants each month, except that a cannabis distributor’s possession of cannabis plants for transportation shall not be subject to this limit;

(iv) in the case of a cannabis manufacturer, acquire no more than 1,000 pounds of usable cannabis each month;

(v) in the case of a cannabis wholesaler, acquire for resale no more than 1,000 pounds of usable cannabis, or the equivalent amount in any form of manufactured cannabis product or cannabis resin, or any combination thereof, each month; and

(vi) in the case of a cannabis retailer, acquire for retail sale no more than 1,000 pounds of usable cannabis, or the equivalent amount in any form of manufactured cannabis product or cannabis resin, or any combination thereof, each month;

(d) no owner, director, officer, or other person with a financial interest who also has decision making authority for the microbusiness shall hold any financial interest in any other licensed cannabis establishment, distributor, or delivery service, whether or not a microbusiness;

(e) no owner, director, officer, or other person with a financial interest who also has decision making authority for a licensed cannabis establishment, distributor, or delivery service, whether or not a microbusiness, shall hold any financial interest in a microbusiness;

(f) the microbusiness shall not sell or transfer the license issued to it; and

(g) the microbusiness shall comply with such other requirements as may be established by the commission by regulation.

(3) A license designated and issued to a microbusiness shall be valid for one year and may be renewed annually, or alternatively replaced, while still valid, with an annual license allowing the microbusiness to convert and continue its operations as a licensed person or entity that is not a microbusiness subject to the provisions of this subsection, based upon a process and criteria established by the commission in regulation for the conversion.

(a) Any microbusiness that meets the criteria established by the commission for conversion may submit an application to convert its operations. Upon review of the application to confirm the commission’s criteria have been met, the commission shall issue a new annual license to the person or entity, and the previously issued license for the microbusiness shall be deemed expired as of the date of issuance of the new annual license. If the commission determines that the criteria have not been met, the conversion application shall be denied, and the commission shall notify the microbusiness applicant of the specific reason for its denial, and provide the applicant with the opportunity for a hearing in accordance with the “Administrative Procedure Act,” P.L.1968, c.410 (C.52:14B-1 et seq.).

(b) Any new annual license issued pursuant to this paragraph allowing a microbusiness to convert and continue its operations as a licensed person or entity that is not a microbusiness subject to the provisions of this subsection shall be counted towards the percentages of licenses that are designated for and only issued to microbusinesses as set forth in paragraph (1) of this subsection, notwithstanding the microbusiness’ converted operations.

In addition to any other information required to be submitted to the commission pursuant to this section, the commission shall require all license applicants to submit a copy of any services agreement entered into by the applicant with a third-party entity, which agreement shall be subject to review as provided in subsection h. of this section.
The commission shall have the authority to review any services agreement submitted pursuant to subsection g. of this section and any agreement to provide significant financial or technical assistance or the significant use of intellectual property to an applicant, to determine whether the terms of the agreement, including interest rates, returns, and fees, are commercially reasonable and consistent with the fair market value for the terms generally applicable to agreements of a comparable nature. In the event the commission determines the terms of an agreement are not commercially reasonable or consistent with the fair market value generally applicable to the services to be provided under the agreement, the commission shall have the authority to withhold approval of the license application until the parties renegotiate a new agreement that, as determined by the commission, is commercially reasonable and consistent with the fair market value for the terms generally applicable to agreements of a comparable nature. The parties to the agreement may request that the commission provide guidance as to what terms it would find to be commercially reasonable and consistent with the fair market value generally applicable to agreements of a comparable nature. Nothing in this subsection shall be construed to require the commission to award a license to an applicant if the commission determines the applicant does not otherwise meet the requirements for issuance of the license.

(cf: P.L.2023, c.177, s.55)

Section 31 of P.L.2021, c.16 (C.24:6I-45) is amended to read as follows:
Municipal Regulations or Ordinances.
A municipality may enact ordinances or regulations, not in conflict with the provisions of P.L.2021, c.16 (C.24:6I-31 et al.):

(1) governing the number of cannabis establishments, distributors, or delivery services, as well as the location, manner, and times of operation of establishments and distributors, but the time of operation of delivery services shall be subject only to regulation by the commission; and

(2) establishing civil penalties for violation of an ordinance or regulation governing the number of cannabis establishments, distributors, or delivery services that may operate in such municipality, or their location, manner, or the times of operations.

[A] Except as provided in paragraph (2) of subsection e. of this section, a municipality may prohibit the operation of any one or more classes of cannabis establishment, or cannabis distributors or cannabis delivery services, but not the delivery of cannabis items and related supplies by a delivery service, within the jurisdiction of the municipality through the enactment of an ordinance, and this prohibiting ordinance shall apply throughout the municipality, even if that municipality or parts thereof fall within any district, area, or other geographical jurisdiction for which land use planning, site planning, zoning requirements or other development authority is exercised by an independent State authority, commission, instrumentality, or agency pursuant to the enabling legislation that governs its duties, functions, and powers, even if this development authority is expressly stated or interpreted to be exclusive thereunder; the local prohibiting ordinance applies, notwithstanding the provisions of any independent State authority law to the contrary. Only an ordinance to prohibit one or more classes of cannabis establishment, or cannabis distributors or cannabis delivery services enacted pursuant to the specific authority to do so by this section shall be valid and enforceable; any ordinance enacted by a municipality prior to the effective date of this section addressing the issue of prohibiting one or more types of cannabis-related activities within the jurisdiction of the municipality is null and void, and that entity may only prohibit the operation of one or more classes of cannabis establishment, or cannabis distributors or cannabis delivery services by enactment of a new ordinance based upon the specific authority to do so by this section. The failure of a municipality to enact an ordinance prohibiting the operation of one or more classes of cannabis establishment, or cannabis distributors or cannabis delivery services within 180 days after the effective date of P.L.2021, c.16 (C.24:6I-31 et al.), shall result in any class of cannabis establishment, or a cannabis distributor or cannabis delivery service that is not prohibited from operating within the municipality as being permitted to operate therein as follows: the growing, cultivating, manufacturing, and selling and reselling of cannabis and cannabis items, and operations to transport in bulk cannabis items by a cannabis cultivator, cannabis manufacturer, cannabis wholesaler, or as a cannabis distributor or cannabis delivery service shall be permitted uses in all industrial zones of the municipality; and the selling of cannabis items to consumers from a retail store by a cannabis retailer shall be a conditional use in all commercial zones or retail zones, subject to meeting the conditions set forth in any applicable zoning ordinance or receiving a variance from one or more of those conditions in accordance with the “Municipal Land Use Law,” P.L.1975, c.291 (C.40:55D-1 et seq.). At the end of a five-year period following the initial failure of a municipality to enact an ordinance prohibiting the operation of one or more classes of cannabis establishment, or cannabis distributors or cannabis delivery services, and every five-year period thereafter following a failure to enact a prohibiting ordinance, the municipality shall again be permitted to prohibit the future operation of any one or more classes of cannabis establishment, or cannabis distributors or cannabis delivery services through the enactment of an ordinance during a new 180-day period, but this ordinance shall be prospective only and not apply to any cannabis establishment, distributor or delivery service operating in the municipality prior to the enactment of the ordinance. To the extent a municipality prohibits: (1) the operation of any one or more classes of cannabis establishments, distributors, or delivery services; or (2) redesignation of cannabis or cannabis products between medical and personal use, as permitted pursuant to this section, such prohibition or prohibitions shall have no force and effect beyond the municipality enacting the prohibition or limit, bind, or impair, in any way, the activities of cannabis establishments, distributors, or delivery services lawfully operating in any other municipality in the State.
(1) When the commission receives an application for initial licensing or renewal of an existing license for any cannabis establishment, distributor, or delivery service pursuant to section 19 of P.L.2021, c.16 (C.24:6I-36), or endorsement for a cannabis consumption area pursuant to section 28 of P.L.2019, c.153 (C.24:6I-21), the commission shall provide, within 14 days, a copy of the application to the municipality in which the establishment, distributor, delivery service, or consumption area is to be located, unless the municipality has prohibited the operation of the particular class of business for which licensure is sought pursuant to subsection b. of this section, or in the case of an application seeking a consumption area endorsement, prohibited the operation of cannabis retailers. The municipality shall determine whether the application complies with its local restrictions on the number of cannabis establishments, distributors, or delivery services, or their location, manner, or times of operation, and the municipality shall inform the commission whether the application complies with its local restrictions.

(2) [A] Except as provided in paragraph (3) of subsection e. of this section, a municipality may impose a separate local licensing or endorsement requirement as a part of its restrictions on the number of cannabis establishments, distributors, or delivery services, or their location, manner, or times of operation. A municipality may decline to impose any local licensing or endorsement requirements, but a local jurisdiction shall notify the commission that it either approves or denies each application forwarded to it.

A municipality that has adopted an ordinance or regulation, or any change thereto, as described in this section shall submit such ordinance, regulation, or change to such ordinance or regulation to the commission for purposes of being included in the online portal created pursuant to section 5 of P.L. , c. (C. ) (pending before the Legislature as this bill). The commission’s failure to establish the portal pursuant to section 5 of P.L. , c. (C. ) (pending before the Legislature as this bill) shall not negate a municipality’s obligation to submit any such ordinance, regulation, or change to such ordinance or regulation to the commission pursuant to this section.
(1) Notwithstanding any provision of law to the contrary, in the case of a medical cannabis dispensary issued a permit pursuant to the “Jake Honig Compassionate Use Medical Cannabis Act,” P.L.2009, c.307 (C.24:6I-1 et al.), which is applying for approval or renewal of a Class 5 Cannabis Retailer license pursuant to P.L.2021, c.16 (C.24:6I-31 et al.) and which is proposed to be co-located on the premises of an existing medical cannabis dispensary in a municipality that permits the retail sale of medical cannabis, but not the retail sale of adult-use cannabis items, the Commission shall not require municipal review, consent, or approval as a condition of issuing a Class 5 Retailer License for such location. Any prior municipal approval authorizing the medical cannabis dispensary to lawfully operate on the premises shall be deemed to authorize the operation of the Class 5 Cannabis Retailer at the location.

(2) A municipality shall not prohibit the retail sale of cannabis items by any medical cannabis dispensary issued a permit pursuant to the “Jake Honig Compassionate Use Medical Cannabis Act,” P.L.2009, c.307 (C.24:6I-1 et al.) that has been open and lawfully operating in such municipality without any violation, or notice thereof, for a period of not less than 180 days prior.

(3) Any medical cannabis retailer operating as of the effective date of P.L.2021, c.16 shall not be subject to any municipal restriction on the number of cannabis dispensaries or locations.

(cf: P.L.2021, c.16, s.31)

(New section) a. Within 240 days of the effective date of P.L. , c. (C. ) (pending before the Legislature as this bill), the commission shall create, maintain, and update, as appropriate, an online portal, in the form of an Internet website, to maintain adopted municipal ordinances and regulations related to cannabis.
The online portal shall provide a centralized information webpage that maintains ordinances and regulations related to the medical or adult-use cannabis market that a municipality in the State has adopted pursuant to the authority prescribed in P.L.2009, c.307 (C.24:6I-1 et al.) or P.L.2021, c.16 (C.24:6I-31 et al.). This information shall be publicly accessible and shall be submitted to the commission by a municipality in accordance with section 31 of P.L.2021, c.16 (C.24:6I-45).
The online portal, created pursuant to subsection a. of this section shall include a link to the municipal ordinances or regulations adopted by a municipality in accordance with the authority prescribed in P.L.2009, c.307 (C.24:6I-1 et al.) or P.L.2021, c.16 (C.24:6I-31 et al.).

Section 18 of P.L.2021, c.16 (C.24:6I-35) is amended to read as follows:
Regulation of Cannabis.
The commission shall adopt rules and regulations, pursuant to subsection d. of section 6 of P.L.2021, c.16 (C.24:6I-34), which shall be consistent with the intent of P.L.2021, c.16 (C.24:6I-31 et al.). The commission may create an expert task force to make recommendations to the commission about the content of such regulations. Such regulations shall include:

(1) Procedures for the application, issuance, denial, renewal, suspension, and revocation of a license or conditional license to operate as a cannabis establishment, distributor, or delivery service. Such procedures shall include a periodic evaluation of whether the number of each class of cannabis establishment, or cannabis distributors or cannabis delivery services, is sufficient to meet the market demands of the State, a result of which is the commission’s authority to accept new applications and issue additional licenses as it deems necessary to meet those demands, except as otherwise provided in section 33 of P.L.2021, c.16 (C.24:6I-46) regarding an initial period during which the number of Class 1 Cannabis Cultivator licenses is capped, which limit shall not apply to cannabis cultivator licenses issued to microbusinesses as set forth in that section[;]. The commission shall not prohibit any family member, other than a spouse, of license applicant or license holder from also becoming a license applicant or license holder;

(2) Application, licensure, and renewal of licensure fees;

(3) Incorporation of the licensing goals for applicants for licensure who are New Jersey residents established in P.L.2021, c.16 (C.24:6I-31 et al.). The commission shall make good faith efforts to meet these goals. Qualifications for licensure shall be directly and demonstrably related to the operation of a cannabis establishment, distributor, or delivery service, provided that the commission shall make licenses available to as diverse a group as reasonably practicable, however no license of any kind shall be issued to a person under the legal age to purchase cannabis items;

(4) (a) Incorporation of the licensing measures established by the Office of Minority, Disabled Veterans, and Women Cannabis Business Development pursuant to subparagraph (b) of paragraph (1) of subsection c. of section 32 of P.L.2019, c.153 (C.24:6I-25) to promote the licensing of persons from socially and economically disadvantaged communities, and minority businesses and women’s businesses, as these terms are defined in section 2 of P.L.1986, c.195 (C.52:27H-21.18), and disabled veterans’ businesses as defined in section 2 of P.L.2015, c.116 (C.52:32-31.2). The commission shall coordinate with the office with respect to the incorporation of these licensing measures;

(b) Procedures, to monitor the incorporated licensing measures established by the Office of Minority, Disabled Veterans, and Women Cannabis Business Development, which shall include a verification, as part of the application process for licensure or license renewal, of a minority, women’s, or disabled veterans’ business certification provided to that business by the office pursuant to paragraph (1) of subsection b. of section 32 of P.L.2019, c.153 (C.24:6I-25), or verification of an application for certification under review by the office pursuant to that paragraph, which review is occurring simultaneous to the application for licensure or license renewal;

(5) Security requirements for cannabis establishments and transportation of cannabis and cannabis items;

(6) Requirements to prevent the sale or diversion of cannabis items to persons under the legal age to purchase cannabis items, including, but not limited to, requirements that:

(a) All licensees and licensee representatives, before permitting entrance to a cannabis establishment and selling or serving cannabis items to any person, shall require such person to produce one of the following pieces of identification:

(i) The person’s United States passport, or other country’s passport or proper government-issued documentation for international travel if a citizen or other lawfully recognized resident of that country, who is lawfully permitted to possess and use that country’s passport or government-issued documentation for purposes of identification in the United States;

(ii) The person’s motor vehicle driver’s license, whether issued by New Jersey or by any other state, territory, or possession of the United States, or the District of Columbia, provided the license displays a picture of the person;

(iii) A New Jersey identification card issued by the New Jersey Motor Vehicle Commission; or

(iv) Any other identification card issued by a state, territory, or possession of the United States, the District of Columbia, or the United States that bears a picture of the person, the name of the person, the person’s date of birth, and a physical description of the person;

(b) No cannabis establishment, distributor, or delivery service shall employ persons under 18 years of age nor shall any cannabis retailer allow persons under the legal age to purchase cannabis items, other than a person employed by the retailer, to enter or remain on the premises of a cannabis retailer unless accompanied by a parent or legal guardian;

(c) Packaging and branding regulations to prevent the marketing of cannabis items and cannabis paraphernalia to people under the legal age to purchase cannabis items;

(d) No edible cannabis products shall be manufactured, marketed, or sold that are in the shape of, or a shape bearing the likeness or containing characteristics of, a realistic or fictional human, animal, or fruit, or part thereof, including artistic, caricature, or cartoon renderings;

(7) Labeling and packaging requirements for cannabis items sold or distributed by a cannabis establishment, including, but not limited to, the affixing of a tracking stamp to containers or packaging as set forth in section 29 of P.L.2019, c.153 (C.24:6I-22) and requirements that:

(a) Cannabis items and cannabis paraphernalia are not packaged, branded, or marketed using any statement, illustration, or image that:

(i) Includes false, deceptive, or misleading statements;

(ii) Promotes over-consumption;

(iii) Depicts a child or other person under legal age consuming cannabis items; or

(iv) Includes objects, such as toys, characters, or cartoon characters suggesting the presence of a person under the legal age to purchase cannabis items, or any other depiction designed in any manner to be especially appealing to persons under the legal age to purchase cannabis items;

(b) Ensure cannabis items are packaged in opaque, child-resistant special packaging, or if applicable to a particular cannabis item, child resistant special packaging for liquid nicotine containers, in accordance with the “Poison Prevention Packaging Act of 1970,” 15 U.S.C. s.1471 et seq., and the associated regulations promulgated thereunder, except that these child-resistant packaging requirements shall not apply to any cannabis item obtained from a cannabis retailer or alternative treatment center for immediate, on-premises consumption at that retailer’s or center’s cannabis consumption area as permitted pursuant to section 28 of P.L.2019, c.153 (C.24:6I-21);

(c) Cannabis items warning labels adequately inform consumers about safe cannabis use and warn of the consequences of misuse or overuse;

(d) Labeling rules that mandate clear identification of health and safety information, including, but not limited to:

(i) Net weight;

(ii) Production date and expiration date;

(iii) For a cannabis product, cannabis extract, or other cannabis resin, an ingredient list that includes, but is not limited to, all ingredients used to manufacture the cannabis product, any other inactive or excipient ingredients besides cannabis, and a list of all potential allergens contained within the product;

(iv) Strain or type of cannabis, listed by scientific terms, if available, and generic or “slang” names;

(v) Whether the product requires refrigeration;

(vi) Growth method, whether dirt grown, hydroponic, or otherwise, and an indication whether the cannabis was grown using all-organic materials, and a complete list of any nonorganic pesticides, fungicides and herbicides used during the cultivation of the cannabis;

(vii) For a cannabis product, serving size, the total number of servings, and a statement regarding the percentage of THC contained in the cannabis product and in each serving. For example: “The serving size of active THC in this product is X mg. This product contains X servings of cannabis, and the total amount of active THC in this product is X mg.”;

(viii) Warning labels that include the nationwide toll-free telephone number used to access poison control centers that is maintained in accordance with 42 U.S.C. s.300d-71, as well as include, but are not limited to, one or more of the following statements, if applicable to a particular cannabis item:

— “This product contains cannabis”;

— “This product is infused with cannabis”;

— “This product is intended for use by adults 21 years of age or older. Keep out of the reach of children”;

— “The intoxicating effects of this product may be delayed by two or more hours”;

— “There may be health risks associated with the consumption of this product, including for women who are pregnant, breastfeeding, or planning on becoming pregnant”;

— “Do not drive a motor vehicle or operate heavy machinery while using this product “;

(e) Labeling rules that mandate the source of a cannabis item, including, but not limited to, the license number of the cannabis cultivator where the usable cannabis used for the cannabis item was grown, the license number of the cannabis manufacturer that manufactured the cannabis item, and the license number of the cannabis retailer that sold the cannabis item and the production batch and lot number of the cannabis item;

(8) Health and safety regulations and standards for the cultivation of cannabis, and the manufacture and sale of cannabis items, including, but not limited to, requirements that:

(a) Establish accreditation and licensure criteria for cannabis testing facilities, which shall include, as a condition for licensure, the maintenance of a labor peace agreement and entrance into, or good faith effort to enter into, a collective bargaining agreement in accordance with subsection c. of section 19 of P.L.2021, c.16 (C.24:6I-36). The commission shall also incorporate the licensing measures established by the Office of Minority, Disabled Veterans, and Women Cannabis Business Development, and the assessment of their effectiveness, pursuant to subparagraph (b) of paragraph (1) of subsection c. of section 32 of P.L.2019, c.153 (C.24:6I-25), and apply them to the licensing of cannabis testing facilities in order to promote the licensing of persons from socially and economically disadvantaged communities, and minority businesses and women’s businesses, as these terms are defined in section 2 of P.L.1986, c.195 (C.52:27H-21.18), and disabled veterans’ businesses as defined in section 2 of P.L.2015, c.116 (C.52:32-31.2). The license shall permit a cannabis testing facility to test cannabis items in accordance with the provisions set forth in P.L.2021, c.16 (C.24:6I-31 et al.), as well as test medical cannabis and medical cannabis products in accordance with the provisions of the “Jake Honig Compassionate Use Medical Cannabis Act,” P.L.2009, c.307 (C.24:6I-1 et al.);

(b) The commission issue licenses for a sufficient number of cannabis testing facilities, if those facilities:

(i) Meet the requirements for licensure, in order to ensure that the testing of representative samples of cannabis items in accordance with the procedures set forth in paragraph (13) of this subsection can be completed in not more than 14 days following their submission to any facility. Other factors that may be considered by the commission in determining whether a sufficient number of cannabis testing facilities are currently licensed include the current licensees’ experience or expertise in testing highly regulated products, demonstrated testing efficiency and effectiveness, existing research partnerships or capability to form and maintain research partnerships focusing on cannabis or cannabis items, and any other factors established in regulation by the commission; and

(ii) Permit the commission to inspect any licensed cannabis testing facility to determine the condition and calibration of any equipment used for testing, and to ensure that a facility’s testing procedures are performed in accordance with the commission’s accreditation requirements for licensure;

(c) Every licensed cannabis cultivator and cannabis manufacturer shall permit representatives of cannabis testing facilities to make scheduled and unscheduled visits to their premises in order to obtain random samples of cannabis items, in a quantity established by the commission, to be transported to cannabis testing facilities for inspection and testing to certify compliance with health, safety, and potency standards adopted by the commission;

(d) Prescribe methods of producing cannabis, and manufacturing and packaging cannabis items; conditions of sanitation; safe handling requirements; approved pesticides and pesticide testing requirements, to the extent not inconsistent with approved pesticides and requirements otherwise established under federal and State law; and standards of ingredients, quality, and identity of cannabis items manufactured, packaged, or sold by cannabis establishments;

(e) Establish accreditation criteria for responsible cannabis server and seller training and certification programs for cannabis retailer employees;

(f) Provide that no licensed cannabis establishment, distributor, or delivery service, or employee of a cannabis establishment, distributor, or delivery service, shall consume, or allow to be consumed, any cannabis items on the establishment’s, distributor’s, or delivery service’s premises, except as permitted in a cannabis consumption area or premises’ private area for employees as set forth in section 28 of P.L.2019, c.153 (C.24:6I-21);

(g) (i) Set appropriate dosage, potency, and serving size limits for cannabis items, provided that a standardized serving of a cannabis product shall be no more than 10 milligrams of active THC and no individual edible cannabis product for sale shall contain more than 100 milligrams of active THC;

(ii) Require that each single standardized serving of a cannabis product in a multiple-serving edible product is physically demarked in a way that enables a reasonable person to determine how much of the product constitutes a single serving of active THC, and that each standardized serving of the cannabis product shall be easily separable to allow an average person 21 years of age or older to physically separate, with minimal effort, individual servings of the product;

(iii) Require that, if it is impracticable to clearly demark every standardized serving of cannabis product or to make each standardized serving easily separable in an edible cannabis product, the product shall contain no more than 10 milligrams of active THC per unit of sale;

(h) Establish a universal symbol to indicate that a cannabis item contains cannabis, which shall be marked, stamped, or imprinted directly on an edible retail cannabis product, or on each single standardized serving in a multiple-serving edible cannabis product, unless the item is a loose bulk good such as granola or cereal, a powder, a liquid-infused item, or another form too impractical to be marked, stamped, or imprinted;

(i) Prohibit the use of a commercially manufactured or trademarked food product as an edible retail cannabis product, provided that a commercially manufactured or trademarked food product may be used as a component of an edible retail cannabis product or part of a product’s recipe so long as the commercially manufactured or trademarked food product is used in a way that renders it unrecognizable in the final edible cannabis product and the product is not advertised as containing the commercially manufactured or trademarked food product;

(j) Establish screening, hiring, training, and supervising requirements for cannabis retailer employees and others who manufacture or handle cannabis items;

(k) Promote general sanitary requirements for the handling, storage, and disposal of cannabis items, and the maintenance of cannabis establishments, and cannabis distribution and cannabis delivery service premises;

(l) Provide for rigorous auditing, inspection, and monitoring of cannabis establishments, distributors, and delivery services for compliance with health and safety rules and regulations;

(m) Require the implementation of security requirements for cannabis retailers and premises where cannabis items are manufactured, and safety protocols for cannabis establishments, distributors, and delivery services, and their employees;

(n) Prescribe reasonable restrictions on the manner, methods, and means by which cannabis cultivators and cannabis distributors shall transport cannabis within the State, and all licensees shall transport cannabis items within the State; and

(o) Establish procedures for identification, seizure, confiscation, destruction, or donation to law enforcement for training purposes of cannabis or cannabis items produced, manufactured, sold, or offered for sale within this State which do not conform in all respects to the standards prescribed by P.L.2021, c.16 (C.24:6I-31 et al.);

(9) Restrictions on the advertising and display of cannabis items and cannabis paraphernalia, including, but not limited to, requirements that:

(a) Restrict advertising of cannabis items and cannabis paraphernalia in ways that target or are designed to appeal to individuals under the legal age to purchase cannabis items, including, but not limited to depictions of a person under 21 years of age consuming cannabis items, or, includes objects, such as toys, characters, or cartoon characters suggesting the presence of a person under 21 years of age, or any other depiction designed in any manner to be especially appealing to a person under 21 years of age;

(b) Prohibit advertising of any cannabis items or cannabis paraphernalia on television, or on radio between the hours of 6:00 a.m. and 10:00 p.m.;

(c) Prohibit engaging in advertising unless the advertiser has reliable evidence that at least 71.6 percent of the audience for the advertisement is reasonably expected to be 21 years of age or older;

(d) Prohibit engaging in advertising or marketing directed towards location-based devices, including but not limited to cellular phones, unless the marketing is a mobile device application installed on the device by the owner of the device who is 21 years of age or older and includes a permanent and easy opt-out feature and warnings that the use of cannabis items is restricted to persons 21 years of age or older;

(e) Prohibit the sponsoring of a charitable, sports, musical, artistic, cultural, social, or other similar event or advertising at or in connection with such an event unless the sponsor or advertiser has reliable evidence that no more than 20 percent of the audience at the event is reasonably expected to be under the legal age to purchase cannabis items;

(f) Require all advertisements to contain the following warning: “This product contains cannabis. For use only by adults 21 years of age or older. Keep out of the reach of children.”;

(g) Prohibit the advertising of cannabis items or cannabis paraphernalia in any form or through any medium whatsoever within 200 feet of any elementary or secondary school grounds. This subparagraph shall not apply to advertisements within the premises of a cannabis retailer.

For the purposes of this section, a noncommercial message shall not be considered an advertisement.

(10) A requirement that only cannabis items and cannabis paraphernalia are available for sale at a cannabis establishment;

(11) Procedures for the commission to conduct announced and unannounced visits to cannabis establishments, distributors, and delivery services, to make, or cause to be made, such investigations as it shall deem proper in the administration of P.L.2021, c.16 (C.24:6I-31 et al.) and any other laws which may hereafter be enacted concerning cannabis, or the production, manufacture, distribution, sale, or delivery thereof, including the inspection and search of any premises for which the license is sought or has been issued, of any building containing the same, of licensed buildings, examination of the books, records, accounts, documents and papers of the licensees or on the licensed premises;

(a) The commission shall be authorized and may at any time make an examination of the premises of any person or entity licensed under P.L.2021, c.16 (C.24:6I-31 et al.) for the purpose of determining compliance with P.L.2021, c.16 (C.24:6I-31 et al.) and the rules of the commission;

(b) The commission may require licensee compliance with P.L.2021, c.16 (C.24:6I-31 et al.), and may appoint auditors, investigators and other employees that the commission considers necessary to enforce its powers and perform its duties;

(c) During any inspection of a licensed premises, the commission may require proof that a person performing work at the premises is 18 years of age or older. If the person does not provide the commission with acceptable proof of age upon request, the commission may require the person to immediately cease any activity and leave the premises until the commission receives acceptable proof of age; and

(d) The commission shall not be required to obtain a search warrant to conduct an investigation or search of licensed premises;

(12) Record keeping requirements, including, but not limited to, the following:

(a) The obligation of every cannabis cultivator to keep a complete and accurate record of all sales of cannabis flowers, cannabis leaves, and immature cannabis plants, and a complete and accurate record of the number of cannabis flowers produced, the number of ounces of cannabis leaves produced, the number of immature cannabis plants produced, and the dates of production; the obligation of every cannabis establishment to keep a complete and accurate record of all sales of cannabis items, and a complete and accurate record of the number of ounces of usable cannabis sold; the obligation of every cannabis distributor to keep a complete and accurate record of all cannabis and cannabis items transported in bulk, and the sending and receiving cannabis establishments involved in each transportation of the cannabis or cannabis items; and the obligation of every cannabis delivery service to keep a complete and accurate record of all cannabis item deliveries made to consumers based on orders fulfilled by of cannabis retailers;

(b) Such records shall be kept and maintained for four years, however there shall not be a requirement that the records be maintained on the premises of a licensee, and the records shall be in such form and contain such other information as the commission may require; and

(c) The commission may, at any time, with adequate notice, examine the books and records of any cannabis establishment, distributor, or delivery service, and may appoint auditors, investigators, and other employees that the commission considers necessary to enforce its powers and its duties;

(13) Procedures for inspecting samples of cannabis items, including:

(a) On a schedule determined by the commission, every licensed cannabis cultivator and manufacturer shall submit representative samples of cannabis items produced or manufactured by the licensee to an independent, third-party licensed testing facility meeting the accreditation requirements established by the commission, or random samples may be obtained by representatives of the facility making a scheduled or unscheduled visit to the licensee’s premises, for inspection and testing to certify compliance with standards adopted by the commission. Any sample remaining after testing shall be destroyed by the facility or returned to the licensee, unless that sample does not meet the applicable standards adopted by the commission, in which case it may be retained for purposes of retesting upon request of a licensee in accordance with subparagraph (c) of this paragraph;

(b) Licensees shall submit the results of this cannabis item inspection and testing to the commission on a form developed by the commission; and

(c) If a sample inspected and tested under this section does not meet the applicable standards adopted by the commission, the sample may, upon notice to the commission, be retested at the request of a licensee in a manner prescribed by the commission, and in addition to a retest, or as an alternative thereto, the licensee may also be permitted an opportunity to remediate, upon notice to the commission, the batch or lot from which the failed sample was taken, which batch or lot shall be subject to a subsequent test of a new representative sample in a manner prescribed by the commission. Any request for a retest of a sample, and any retest and reporting of results, as well as any batch or lot remediation process undertaken and subsequent testing of that batch or lot, shall be completed within a time period established by the commission. The commission shall also provide a process by which samples, batches, and lots that failed retesting or remediation, as applicable, shall be destroyed;

(14) Establishing the number of cannabis retailers, and permissible business arrangements with respect to other types of retailing businesses:

(a) (i) Assuming there are sufficient qualified applicants for licensure, the commission shall, subject to periodic evaluation as described in paragraph (1) of this subsection, issue a sufficient number of Class 5 Retailer licenses to meet the market demands of the State, giving regard to geographical and population distribution throughout the State; and

(ii) the provision of adequate access to licensed sources of cannabis items to discourage purchases from the illegal market; and

(b) A cannabis retailer’s premises shall not be located in or upon any premises in which operates a grocery store, delicatessen, indoor food market, or other store engaging in retail sales of food, or in or upon any premises in which operates a store that engages in licensed retail sales of alcoholic beverages, as defined by subsection b. of R.S.33:1-1; and

(15) Civil penalties for the failure to comply with regulations adopted pursuant to this section.

In order to ensure that individual privacy is protected, the commission shall not require a consumer to provide a cannabis retailer with personal information other than government-issued identification as set forth in subparagraph (a) of paragraph (6) of subsection a. of this section in order to determine the consumer’s identity and age, and a cannabis retailer shall not collect and retain any personal information about consumers other than information typically acquired in a financial transaction conducted by the holder of a Class C retail license concerning alcoholic beverages as set forth in R.S.33:1-12.
Once regulations are adopted by the commission pursuant to subsection a. of this section, but prior to the commencement of the application process, the commission shall conduct a series of information sessions in every county in New Jersey to educate residents of New Jersey about the responsibilities, opportunities, requirements, obligations, and processes for application for a license to operate a cannabis establishment, distributor, or delivery service. The commission shall conduct an appropriate number of information sessions in each county considering the population of each county, but no fewer than one information session in each county. The commission shall publicize the day, time, location, and agenda of each information session broadly through television, radio, Internet, print, and local agencies.
The commission shall:

(1) Examine available research, and may conduct or commission new research or convene an expert task force, to investigate the influence of cannabis and marijuana on the ability of a person to drive a vehicle, on methods for determining whether a person is under the influence of cannabis or marijuana, and on the concentration of active THC, as defined in section 3 of P.L.2021, c.16 (C.24:6I-33), in a person’s blood, in each case taking into account all relevant factors; and

(2) Report the results of the research to the Governor and, pursuant to section 2 of P.L.1991, c.164 (C.52:14-19.1), the Legislature and make recommendations regarding both administrative and legislative action as the commission deems necessary.

(cf: P.L.2021, c.16, s.18)

Section 33 of P.L.2021, c.16 (C.24:6I-46) is amended to read as follows:
Marketplace Regulation.
(1) (a) For a period of 24 months after the effective date of P.L.2021, c.16 (C.24:6I-31 et al.), it shall be unlawful for any owner, part owner, stockholder, officer, or director of any corporation, or any other person interested in any cannabis cultivator, cannabis manufacturer, cannabis wholesaler, cannabis distributor, cannabis delivery service, or cannabis testing facility to engage in the retailing of any cannabis items in this State, or to own, either in whole or in part, or be directly or indirectly interested in a cannabis retailer, and such interest shall include any payments or delivery of money or property by way of loan or otherwise accompanied by an agreement to sell the product of said cannabis cultivator, cannabis manufacturer, cannabis wholesaler, cannabis distributor, or cannabis testing facility, but does not include any arrangement between a cannabis delivery service and a cannabis retailer for making deliveries of cannabis items to consumers. During this 24-month period, the holder of a Class 1 Cannabis Cultivator license to operate as a cannabis cultivator or a Class 2 Cannabis Manufacturer license to operate as a cannabis manufacturer may hold one other license to operate another cannabis establishment, other than a Class 3 Cannabis Wholesaler license to operate as a cannabis wholesaler or a Class 5 Cannabis Retailer license to operate as a cannabis retailer; and the holder of a Class 3 Cannabis Wholesaler license to operate as a cannabis wholesaler may hold one other Class 4 Cannabis Distributor license to operate as a cannabis distributor.

(b) Throughout the 24-month period set forth in subparagraph (a) of this paragraph, the commission, except as authorized by paragraph (2) of subsection b. of this section, shall not allow, providing there exist qualified applicants, more than 37 cannabis cultivators to be simultaneously licensed and engaging in cannabis production, which number shall include any alternative treatment centers deemed to be licensed as cannabis cultivators who are issued licenses by the commission pursuant to paragraph (3) of this subsection; provided that cannabis cultivator licenses issued to microbusinesses pursuant to subsection f. of section 19 of P.L.2021, c.16 (C.24:6I-36) shall not count towards this limit.

(2) For a period of 24 months after the effective date of P.L.2021, c.16 (C.24:6I-31 et al.), it shall be unlawful for any owner, part owner, stockholder, officer, or director of any corporation, or any other person engaged in any retailing of any cannabis items to engage in the growing of, testing of, manufacturing of, wholesaling of, or transporting in bulk any cannabis items, or to own either whole or in part, or to be a shareholder, officer or director of a corporation or association, directly or indirectly, interested in any cannabis cultivator, cannabis manufacturer, cannabis wholesaler, cannabis distributor, cannabis delivery service, or cannabis testing facility.

(3) (a) (i) Except with respect to the cap on the number of cannabis cultivator licenses set forth in subparagraph (b) of paragraph (1) of this subsection, the provisions of paragraphs (1) and (2) of this subsection shall not apply to any alternative treatment center that was issued a permit prior to the effective date of P.L.2019, c.153 (C.24:6I-5.1 et al.), or to any alternative treatment center that was issued a permit subsequent to that effective date pursuant to an application submitted prior to that effective date,

to the one alternative treatment center, out of four, issued a permit pursuant to an application submitted after the effective date of P.L.2019, c.153 (C.24:6I-5.1 et al.) pursuant to a request for applications published in the New Jersey Register prior to that effective date, that is expressly exempt, pursuant to subsection a. of section 11 of P.L.2019, c.153 (C.24:6I-7.1), from the provisions of subsubparagraph (i) of subparagraph (a) of paragraph (2) of subsection a. of section 7 of P.L.2009, c.307 (C.24:6I-7), which exemption permits the alternative treatment center to concurrently hold more than one medical cannabis permit, and that one alternative treatment center is deemed pursuant to that section 7 (C.24:6I-7) to concurrently hold more than one permit, and

to the one alternative treatment center, out of three, issued a permit pursuant to an application submitted on or after the effective date of P.L.2019, c.153 (C.24:6I-5.1 et al.), that is expressly exempt, pursuant to subsection a. of section 11 of P.L.2019, c.153 (C.24:6I-7.1), from the provisions of subsubparagraph (i) of subparagraph (a) of paragraph (2) of subsection a. of section 7 of P.L.2009, c.307 (C.24:6I-7), which exemption permits the alternative treatment center to concurrently hold more than one medical cannabis permit, and that one alternative treatment center is deemed pursuant to that section 7 (C.24:6I-7) to concurrently hold more than one permit,

and which alternative treatment center is also deemed, pursuant to subsubparagraph (ii) of subparagraph (c) of paragraph (2) of section 7 of P.L.2009, c.307 (C.24:6I-7), to either concurrently hold a Class 1 Cannabis Cultivator license, a Class 2 Cannabis Manufacturer license, a Class 5 Cannabis Retailer license, plus an additional Class 5 Cannabis Retailer license for each satellite dispensary authorized and established by an alternative treatment center pursuant to subparagraph (d) of paragraph (2) of subsection a. of section 7 of P.L.2009, c.307 (C.24:6I-7), and a Class 6 Cannabis Delivery license, or alternatively to hold a Class 3 Cannabis Wholesaler license, and may also be deemed to hold a Class 4 Cannabis Distributor license.

(ii) For each alternative treatment center deemed to have licenses pursuant to subsubparagraph (i) of this subparagraph, the commission shall not require the submission of an application for licensure, as the application requirement is deemed satisfied by the alternative treatment center’s previously approved permit application that was submitted to the Department of Health or to the commission pursuant to section 7 of P.L.2009, c.307 (C.24:6I-7), but the alternative treatment center shall not begin to operate as any class of cannabis establishment distributor, or delivery service until the alternative treatment center has submitted a written approval for a proposed cannabis establishment distributor, or delivery service from the municipality in which the proposed establishment distributor, or delivery service is to be located, which approval is based on a determination that the proposed establishment distributor, or delivery service complies with the municipality’s restrictions on the number of establishments distributor, or delivery services, as well as the location, manner, and times of operation of establishments or distributors enacted pursuant to section 31 of P.L.2021, c.16 (C.24:6I-45). The commission shall thereafter only issue the initial license to the alternative treatment center for a cannabis establishment of the appropriate class, or for a cannabis distributor or delivery service, once the commission certifies that it has sufficient quantities of medical cannabis and medical cannabis products available to meet the reasonably anticipated needs of registered qualifying patients in accordance with subsubparagraph (iii) of this subparagraph. The commission shall begin accepting municipal approvals from alternative treatment centers beginning on the date of adoption of the commission’s initial rules and regulations pursuant to subparagraph (a) of paragraph (1) of subsection d. of section 6 of P.L.2021, c.16 (C.24:6I-34).

(iii) An alternative treatment center with approval from a municipality pursuant to subsubparagraph (ii) of this subparagraph shall not engage in activities related to the growing, manufacturing, wholesaling, transporting or delivering of cannabis or cannabis items until it has certified to the commission that that it has sufficient quantities of medical cannabis and medical cannabis products available to meet the reasonably anticipated needs of registered qualifying patients, and the commission has accepted the alternative treatment center’s certification, which acceptance is conditioned on the commission’s review of the alternative treatment center as set forth in subsubparagraph (iv) of this subparagraph. Upon acceptance of the certification, the commission shall issue the initial license to the alternative treatment center for a cannabis establishment of the appropriate class or for a cannabis distributor or delivery service. Nothing herein shall be construed to prohibit or limit the ability of an alternative treatment center to redesignate medical cannabis or medical cannabis products to personal use cannabis or cannabis items at the alternative treatment center’s licensed cannabis establishment for the appropriate class, including, but not limited to, redesignation between any satellite cannabis cultivator or manufacturer locations.

Notwithstanding the date determined by the commission pursuant to paragraph (2) of subsection d. of section 6 of P.L.2021, c.16 (C.24:6I-34) to be the first date on which cannabis retailers issued licenses and conditional licenses begin retail sales of personal use cannabis items, an alternate treatment center, if approved by the commission to operate as a cannabis retailer, may begin to engage in the retail sale of cannabis items on any date after the date that the commission adopts its initial rules and regulations pursuant to subparagraph (a) of paragraph (1) of subsection d. of section 6 of that act P.L.2021, c.16 (C.24:6I-34), so long as it has certified to the commission that it has sufficient quantities of medical cannabis and, if applicable, medical cannabis products available to meet the reasonably anticipated needs of registered qualifying patients, and the commission has accepted the alternative treatment center’s certification, which acceptance is conditioned on the commission’s review of the alternative treatment center as set forth in subsubparagraph (iv) of this subparagraph. Upon acceptance of the certification, the commission shall issue the initial cannabis retailer license to the alternative treatment center for engaging in the retail sale of cannabis items.

(iv) An alternative treatment center issued a license for a cannabis establishment or delivery service shall be authorized to use the same premises for all activities authorized under P.L.2021, c.16 (C.24:6I-31 et al.) and the “Jake Honig Compassionate Use Medical Cannabis Act,” P.L.2009, c.307 (C.24:6I-1 et al.), without being required to establish or maintain any physical barriers or separations between operations related to the medical use of cannabis and operations related to personal use of cannabis items, provided that the alternative treatment center shall be required to certify that it hassufficient quantities of medical cannabis and, if applicable, medical cannabis products available to meet the reasonably anticipated needs of registered qualifying patients, as set forth in subsubparagraph (ii) or (iii) of this subparagraph, and only if accepted by the commission, which is a condition for licensure as a cannabis establishment of the appropriate class or as a cannabis delivery service.

In determining whether to accept, pursuant to this subparagraph, an alternative treatment center’s certification that it has sufficient quantities of medical cannabis or medical cannabis products available to meet the reasonably anticipated needs of registered qualifying patients, the commission shall assess patient enrollment, inventory, sales of medical cannabis and medical cannabis products, and any other factors determined by the commission through regulation.

As a condition of licensure following acceptance of a certification, an alternative treatment center shall meet the anticipated treatment needs of registered qualifying patients before meeting the retail requests of cannabis consumers, and the alternative treatment center shall not make operational changes that reduce access to medical cannabis for registered qualifying patients in order to operate a cannabis establishment or delivery service. If an alternative treatment center is found by the commission to not have sufficient quantities of medical cannabis or medical cannabis products available to meet the reasonably anticipated needs of qualified patients, the commission may issue fines, limit retail or other sales, temporarily suspend the alternative treatment center’s cannabis establishment, distributor, or delivery service license, or issue any other penalties determined by the commission through regulation.

(b) Beginning on a date determined by the commission, to be not later than one year from the date determined by the commission pursuant to paragraph (2) of subsection d. of section 6 of P.L.2021, c.16 (C.24:6I-34) to be the first date on which cannabis retailers issued licenses and conditional licenses begin retail sales of personal use cannabis items, an alternative treatment center deemed to have licenses and issued initial licenses pursuant to subparagraph (a) of this paragraph shall certify to the commission, within a period of time, as determined by the commission, prior to the date on which a license issued to the alternative treatment center is set to expire, the continued material accuracy of the alternative treatment center’s previously approved permit application to the Department of Health or to the commission pursuant to section 7 of P.L.2009, c.307 (C.24:6I-7), and its compliance with the provisions of P.L.2021, c.16 (C.24:6I-31 et al.)as required by the commission for its operations concerning cannabis or cannabis items, and this certification shall be supplemented with a new written approval from the municipality in which the alternative treatment center is operating as a cannabis establishment or delivery service for which the initial license was issued, approving the continued operations as a cannabis establishment distributor, or delivery service. The commission shall renew the license of the alternative treatment center based upon a review of the certification and supporting municipality’s continued approval. This license renewal process shall thereafter be followed for each expiring license issued to the alternative treatment center.

Following the 24-month period set forth in subparagraph (a) of paragraph (1) of subsection a. of this section, a cannabis license holder shall be authorized to hold:

(1) (a) a Class 1 Cannabis Cultivator license, a Class 2 Cannabis Manufacturer license, a Class 5 Cannabis Retailer license, and a Class 6 Cannabis Delivery license concurrently, provided that no license holder shall be authorized to concurrently hold more than one license of each class, except for an alternative treatment center that was deemed, during the 24-month period, to have an additional Class 5 Cannabis Retailer license for each satellite dispensary that was authorized and established by the alternative treatment center pursuant to subparagraph (d) of paragraph (2) of subsection a. of section 7 of P.L.2009, c.307 (C.24:6I-7). These additional retailer licenses only permit the retail operation of each satellite dispensary, and shall not be replaced by any other class of cannabis establishment distributor, or delivery service license; or

(b) a Class 3 Cannabis Wholesaler license and a Class 4 Cannabis Distributor license. In no case may a holder of a Class 3 Cannabis Wholesaler license concurrently hold a license of any other class of cannabis establishment, or concurrently hold a license as a cannabis delivery service.

(2) The commission, pursuant to its authority under paragraph (1) of subsection a. of section 18 of P.L.2021, c.16 (C.24:6I-35) for making periodic evaluations of whether the number of each class of cannabis establishment, or number of cannabis distributors or delivery services, is sufficient to meet the market demands of the State, shall review the limit on the number of cannabis cultivator licenses set forth in subparagraph (b) of paragraph (1) of subsection a. of this section, and providing there exist qualified applicants, accept new applications for additional licenses as it deems necessary.

(3) A license holder may submit an application for a license of any type that the license holder does not currently hold prior to the expiration of the 24-month period set forth in subparagraph (a) of paragraph (1) of subsection a. of this section, or thereafter, does not currently hold pursuant to paragraph (1) of this subsection, provided that no license shall be awarded to the license holder during the 24-month period, or thereafter, if issuance of the license would violate the restrictions set forth in subsection a. of this section concerning the classes of licenses that may be concurrently held during that 24-month period, or the restrictions set forth in paragraph (1) of this subsection.

Notwithstanding the provisions of this section, an investor, investor group, or fund that provides significant financial or technical assistance or the significant use of intellectual property, or a combination thereof, to an applicant for a Class 5 cannabis retailer license, which applicant has been certified as a minority business pursuant to P.L.1986, c.195 (C.52:27H-21.18 et seq.), a women’s business pursuant to P.L.1986, c.195 (C.52:27H-21.18 et seq.), or is a disabled-veterans’ business, as defined in section 2 of P.L.2015, c.116 (C.52:32-31.2), may own up to a 35 percent interest in up to seven entities that have been issued a Class 5 cannabis retailer license, provided that each such retailer is a certified minority or women’s business or a disabled-veterans’ business, and the terms of the agreement to provide significant financial or technical assistance or the significant use of intellectual property, or a combination thereof, whether provided in the form of equity, a loan, or otherwise, including interest rates, returns, and fees, are commercially reasonable based on the terms generally provided to comparable businesses. The terms of the agreement for the provision of significant financial or technical assistance or the significant use of intellectual property, or a combination thereof, may include performance, quality, and other requirements as a condition of providing the financial or technical assistance or use of intellectual property. An applicant for a Class 5 cannabis retailer license that has or will receive significant financial or technical assistance or the significant use of intellectual property under this subsection shall include with the license application materials submitted to the commission a copy of the agreement to provide significant financial or technical assistance or significant use of intellectual property, or a combination thereof, which agreement shall be subject to review by the commission as provided in subsection f. of section 11 of P.L.2019, c.153 (C.24:6I-7.1).

An applicant for a Class 5 cannabis retailer license that receives significant financial or technical assistance or the significant use of intellectual property under this subsection shall pay back to the investor, investor group, or fund the full value of the financial or technical assistance or intellectual property provided under the agreement, plus any applicable interest and fees, in a period not less than five years after the date of the agreement if the full value of the assistance or property is less than $100,000, in a period not less than seven years after the date of the agreement if the full value of the assistance or property is between $100,001 and $250,000, in a period not less than 10 years after the date of agreement if the full value of the assistance or property is between $250,001 and $500,000, and, subject to any terms and conditions imposed by a lender, in a period not less than 10 years after the date of the agreement if the full value of the assistance or property is greater than $500,000. An investor, investor group, or fund that has acquired an ownership interest in one or more entities that have been issued a Class 5 cannabis retailer license as authorized under this subsection may maintain the ownership interest after the date the full value of the financial or technical assistance or use of intellectual property provided under the agreement, plus interest and fees, has been repaid by the applicant that received the assistance or use of intellectual property.

In no case may the controlling interest in the entity that holds a Class 5 cannabis retailer license in which an investor, investor group, or fund owns an interest as authorized pursuant to this subsection revert to the investor, investor group, or fund in the event of a default or failure by the certified minority or women’s business or disabled-veterans’ business, as applicable, and any such controlling interest may only be transferred to a certified minority or women’s business or a disabled-veterans’ business.

An entity issued a Class 1 cannabis cultivator license, Class 2 cannabis manufacturer license, or Class 5 cannabis retailer license, or an alternative treatment center, or an individual associated with the ownership or management of such entity, may invest or participate in an investor group or a fund that meets the requirements of this subsection with respect to a Class 5 cannabis retailer license or an alternative treatment center permit.

(cf: P.L.2023, c.162, s.2)

Section 29 of P.L.2019, c.153 (C.24:6I-22) is amended to read as follows:
a. (1) The commission shall develop and maintain a system for tracking:

(a) the cultivation of medical cannabis, the manufacturing of medical cannabis products, the transfer of medical cannabis and medical cannabis products between medical cannabis cultivators, medical cannabis manufacturers, medical cannabis dispensaries, clinical registrants, testing laboratories as authorized pursuant to paragraph (5) of subsection a. of section 7 of P.L.2009, c.307 (C.24:6I-7), subsection h. of section 27 of P.L.2019, c.153 (C.24:6I-20), and cannabis testing facilities pursuant to section 18 of P.L.2021, c.16 (C.24:6I-35), and the dispensing or delivery of medical cannabis to registered qualifying patients, designated caregivers, and institutional caregivers; and

(b) the production of personal use cannabis, the manufacturing of cannabis items, the transportation by cannabis distributors or other transfer of cannabis items between the premises of cannabis cultivators, cannabis manufacturers, cannabis wholesalers, cannabis retailers, and authorized laboratories and testing facilities, the retail sale of cannabis items to persons 21 years of age or older, and the delivery of cannabis items to persons 21 years of age or older through cannabis delivery services or by personal use cannabis handlers as authorized pursuant to P.L.2021, c.16 (C.24:6I-31 et al.).

(2) The tracking system shall, among other features as determined by the commission, utilize a stamp affixed to a container or package for medical cannabis or personal use cannabis items to assist in the collection of the information required to be tracked pursuant to subsection c. of this section.

(a) The commission, in consultation with the Director of the Division of Taxation, shall secure stamps based on the designs, specifications, and denominations prescribed by the commission in regulation, and which incorporate encryption, security, and counterfeit-resistant features to prevent the unauthorized duplication or counterfeiting of any stamp. The stamp shall be readable by a scanner or similar device that may be used by the commission, the Director of the Division of Taxation, medical cannabis cultivators, medical cannabis manufacturers, medical cannabis dispensaries, and clinical registrants, and personal use cannabis cultivators, cannabis manufacturers, cannabis wholesalers, cannabis distributors, cannabis retailers, and cannabis delivery services.

(b) The commission, and the Director of the Division of Taxation if authorized by the commission, shall make stamps available for purchase by medical cannabis cultivators, medical cannabis manufacturers, and clinical registrants, and personal use cannabis cultivators, cannabis manufacturers, cannabis wholesalers, cannabis distributors, cannabis retailers, and cannabis delivery services, which shall be the only entities authorized to affix a stamp to a container or package for medical cannabis or personal use cannabis items in accordance with applicable regulations promulgated by the commission in consultation with the Director of the Division of Taxation. The price charged by the commission for a stamp shall be reasonable and commensurate with the cost of producing the stamp.

(c) A medical cannabis cultivator, medical cannabis manufacturer, medical cannabis dispensary, clinical registrant, or certified medical cannabis handler, or a personal use cannabis cultivator, cannabis manufacturer, cannabis wholesaler, cannabis distributor, cannabis retailer, cannabis delivery service, or certified personal use cannabis handler, shall not purchase, sell, offer for sale, transfer, transport, or deliver any medical cannabis or personal use cannabis item unless a stamp is properly affixed to the container or package for the medical cannabis or personal use cannabis item.

The purposes of the system developed and maintained under this section include, but are not limited to:

(1) preventing the diversion of medical cannabis and personal use cannabis items to criminal enterprises, gangs, cartels, persons not authorized to possess medical cannabis or personal use cannabis items, and other states;

(2) preventing persons from substituting or tampering with medical cannabis and personal use cannabis items;

(3) ensuring an accurate accounting of the cultivation, manufacturing, transferring, dispensing, and delivery of medical cannabis, and the production, manufacturing, transporting, transferring, sale, and delivery of personal use cannabis items;

(4) ensuring that the testing results from licensed testing laboratories and facilities are accurately reported; and

(5) ensuring compliance with the rules and regulations adopted by the commission and any other law of this State that charges the commission with a duty, function, or power related to medical cannabis or personal use cannabis items.

The system developed and maintained under this section shall be capable of tracking, at a minimum:

(1) the propagation of immature medical cannabis plants and personal use cannabis plants, the production of medical cannabis by a medical cannabis cultivator, and the production of personal use cannabis by a cannabis cultivator;

(2) the utilization of medical cannabis in the manufacture and creation of medical cannabis products by a medical cannabis manufacturer, the manufacturing of personal use cannabis items by a cannabis manufacturer, the receiving, storing, and sending of personal use cannabis items by a cannabis wholesaler, and the transporting in bulk cannabis items by a cannabis distributor;

(3) the transfer of medical cannabis and medical cannabis products, and personal use cannabis items, to and from licensed testing laboratories and facilities for testing purposes;

(4) the dispensing of medical cannabis by a medical cannabis dispensary or clinical registrant, and the selling of personal use cannabis items by a cannabis retailer;

(5) the furnishing of medical cannabis by a medical cannabis dispensary or clinical registrant to a medical cannabis handler for delivery, and the furnishing of personal use cannabis items by a cannabis retailer to a personal use cannabis handler for delivery;

(6) the delivery of medical cannabis by a medical cannabis handler, and the delivery of personal use cannabis items by a personal use cannabis handler;

(7) the purchase, sale, or other transfer of medical cannabis and medical cannabis products between medical cannabis cultivators, medical cannabis manufacturers, medical cannabis dispensaries, and clinical registrants as authorized pursuant to paragraph (5) of subsection a. of section 7 of P.L.2009, c.307 (C.24:6I-7) and subsection h. of section 27 of P.L.2019, c.153 (C.24:6I-20), and the purchase, sale, transporting, or other transfer of personal use cannabis and cannabis items by or between cannabis cultivators, cannabis manufacturers, cannabis wholesalers, cannabis distributors, cannabis retailers, and cannabis delivery services as authorized pursuant to P.L.2021, c.16 (C.24:6I-31 et al.); [and]

(8) The redesignation of medical cannabis or medical cannabis products to personal use cannabis or cannabis items at the alternative treatment center’s licensed cannabis establish for the appropriate class, including, but not limited to, redesignation between any satellite cannabis cultivator or manufacturer locations, provided that such alternative treatment center has sufficient quantities of medical cannabis and medical cannabis products available to meet the reasonably anticipated needs of registered qualifying patients; and

(9) any other information that the commission determines is reasonably necessary to accomplish its duties, functions, and powers.

(cf: P.L.2021, c.16, s.38)

(New section) Notwithstanding any provision of the “Administrative Procedure Act,” P.L.1968, c.410 (C.52:14B-1 et seq.), to the contrary, the Cannabis Regulatory Commission, in accordance with the authority granted pursuant to P.L.2021, c.16 (C.24:6I-31 et al.) and section 31 of P.L.2019, c.153 (C.24:6I-24), is authorized to adopt immediately upon filing with the Office of Administrative Law rules and regulations necessary to implement P.L. , c. (C. ) (pending before the Legislature as this bill). The rules and regulations adopted pursuant to this section shall be effective for a period not to exceed 18 months following the date of filing and may thereafter be amended, adopted, or readopted by the director in accordance with the requirements of P.L.1968, c.410 (C.52:14B-1 et seq.).

This act shall take effect immediately.

STATEMENT

This bill makes various changes to the “Cannabis Regulatory, Enforcement Assistance, and Marketplace Modernization Act” (CREAMMA) and the “Jake Honig Compassionate Use Medical Cannabis Act” (Medical Cannabis Act).

Municipal Medical Cannabis Limitations

Under the bill, a municipality may not prohibit the operation of a retailer of cannabis items by any medical cannabis dispensary issued a permit pursuant to the Medical Cannabis Act that has been opened and operating without any violation, or notice thereof, for a period of not less than 180 days.

Under current law, a municipality may impose separate local licensing or endorsement requirements as a part of its restrictions on the number of operations of cannabis licensees, or their location, manner, or times of operation. Under the bill, a restriction on the number or location of cannabis licensees operating in a municipality does not apply to any medicinal cannabis retailer operating as of the effective date of the CREAMMA.

The bill also prohibits the Cannabis Regulatory Commission (commission) from requiring municipal review, consent, or approval as a condition of issuing a Class 5 Retailer License to a medical cannabis dispensary issued a permit pursuant to the Medical Cannabis Act, which is also applying for approval or renewal of a Class 5 Retailer License pursuant to CREAMMA that is proposed to be co-located on the premises of an existing medical cannabis dispensary in a municipality that permits the retail sale of medical cannabis, but not the retail sale of adult-use cannabis items. Any prior approval authorizing the medical cannabis dispensary to lawfully operate on the premises shall be deemed to authorize the Class 5 Cannabis Retailer use at the same location for all purposes.

Commission Application Determinations

Under current law and commission regulations, the commission has 30 days to make a determination on a completed conditional license, and 90 days to make a determination on a completed annual license application. Before the expiration of these periods, the commission may make a determination that it requires more time to adequately review the application.

Under the bill, if the commission determines that it requires more time to adequately review an application, the commission is required to, not more than 30 days after a determination for more time to review, make a determination as to whether the application is approved or denied, effectively establishing a cap on the total amount of time the commission has to make a decision on an application.

Commission Application Review

Under the bill, the commission will no longer establish a point scale and rank applicants based on that score. The bill also removes the requirement that certain documents be submitted for commission review, and establishes that the commission may require such documents be included for review.

The bill establishes that the commission is no longer required to verify that the following information be contained in an application: (1) a business plan and management operation profile for the proposed cannabis establishment, distributor, or delivery service; or (2) the plan by which the applicant intends to obtain appropriate liability insurance coverage for the cannabis establishment, distributor, or delivery service.

The bill removes the requirement that the commission give greater weight to certain applicants when evaluating the experience of an applicant. The bill also removes the requirement that the commission give special consideration to any applicant that has entered into an agreement with an institute of higher education to create an integrated curriculum.

Further, the bill permits the commission to give an applicant a certain amount of time, determined by the commission, to comply with additional conditions, outside of those which were required for licensure, rather than limiting that period to 45 days.

Municipal Ordinance Portal

The bill requires the commission to create and maintain an online portal. The online portal is required to maintain a centralized municipal portal that includes any ordinance or regulation related to the medical or adult-use cannabis markets that a municipality has adopted in this State. Any municipality that passes a regulation, ordinance, or any change to a regulation or ordinance is required to submit the regulation or ordinance to the commission for purposes of maintaining this information. The centralized municipal portal will be accessible to the public.

Family Applicants or License Holder

This bill prohibits the commission from prohibiting a family member, other than a spouse, of a license applicant or license holder from also becoming a license applicant or license holder. This is intended to invalidate N.J.A.C.17:30-6.8, which prohibits family members of a license applicant or license holder from also becoming such.

Alternative Treatment Centers (ATC)

The bill permits ATCs to redesignate products as either medical or adult-use cannabis at any point in its supply chain, provided that the ATC holds the appropriate license at the point of redesignation.