Greenspoon Marder Article: NEW JERSEY GREATLY EXPANDS MEDICAL MARIJUANA LAW

By: Kristin Jordan, Senior Counsel

Kristin Jordan

In New Jersey, there are nearly 50,000 registered medical marijuana patients and only six Alternative Treatment Centers (ATCs) currently operating. New Jersey recently responded to public demand to revise and expand its medical marijuana program to address issues such as supply scarcity, employment and hiring concerns, and geographic access problems.

The Garden State’s Governor, Phil Murphy, signed the Jake Honig Compassionate Use Medical Marijuana Act (CUMMA) on July 2, 2019. Specifically, the newly amended law:

creates the governing body, the Cannabis Regulatory Commission, with five Governor-appointed members, two of which will be recommended by the Senate President and Assembly Speaker;
expressly prohibits discrimination for off premises and non-working hour consumption for patients “based solely on the employee’s status as a medical marijuana patient.” Additionally the law creates procedures for employees or applicants who test positive for marijuana;
increases the monthly purchasing limit from two to three ounces of dry flower for the next 18 months, with the maximum to be determined by regulation thereafter. Terminally ill and hospice patients will have no limits, effective immediately;
permits edible cannabis products to be sold;
phases out sales tax over a 3 year period;
permits physician assistants and advanced practice nurses to provide recommendations;
provides reciprocity for patients registered with other state medical cannabis programs; and
authorizes home delivery to patients.

In addition, the New Jersey Department of Health released its highly anticipated Request For Applications on Monday. It seeks nonprofit and for profit operators and will expand the current medical marijuana program by adding 24 additional ATCs, distributed according to region: Northern (8), Central (8), Southern (7) and one “at-large” operator to be sited during the awards process. In total, permits/endorsements will be accepted for up to five cultivation facilities, 15 dispensaries and four vertically integrated operators (including one cultivation endorsement, one manufacturing endorsement, and one dispensary endorsement). Cultivation endorsements will be issued according to canopy size: a) up to 5,000 SF = one endorsement; b) 5,001-20,000 SF = two endorsements; c) 20,001-30,000 SF = two endorsements.

Applicants may apply for no more than three endorsements and may only submit one application per region. Vertically integrated applicants many only submit one application. While the application fee will cost $20,000, $18,000 will be returned to applicants who do not receive licenses. Applications for dispensaries are due August 21 at 3 p.m. and cultivation and vertically integrated applications are due on August 22 at 3 p.m. NJDOH has not announced the date on which licenses will be awarded.

The scored criteria for the application is as follows:

Criterion 1. Ability to meet the overall health needs of qualified patients and safety of the public.30 pts

Measure 1, Security plan: The applicant shall provide an acceptable safety and security plan, including staffing and site plan, and a detailed description of proposed security and safety measures, which demonstrates compliance with the rules at N.J.A.C. 8.64. 10 pts
Measure 2. Environmental impact plan: The applicant shall provide a plan explaining how the proposed ATC would minimize negative environmental impacts. 10 pts
Measure 3, Quality control and quality assurance plan: The applicant shall provide a quality control and quality assurance plan that illustrates how the proposed ATC will maintain and verify product quality and protect the health and wellbeing of qualified patients. 10 pts

Criterion 2. History of compliance with regulations and policies governing government regulated marijuana programs. 20 pts

Measure 1, Background of principals, board members, and owners: Applicants shall provide an overview of experience of principals, officers, and owners, in operating a regulated cannabis business, or operating a business in another highly regulated industry, such as healthcare, insurance, financial services, pharmaceuticals, or energy.

Criterion 3. Ability and experience of applicant in ensuring an adequate supply of marijuana. 20 pts

Measure 1, Financing plan: Applicants shall provide a description and evidence of all funding sources pledged to the ATC, to be evaluated on transparency, suitability and overall adequacy of funding.

Criterion 4. Community Support and Participation. 20 pts

Measure 1, Ties to the local community: Applicants shall provide a list of all owners, officers, board members, and principals that have resided in NJ for at least 2 years, and supply proof of their residency.

Criterion 5. Ability to provide appropriate research data. 10 pts

Measure 1, Research contributions: Applicants shall provide evidence of past contributions – in the form of cited original and published work – to expanding clinical and scientific research related to medical cannabis or the debilitating medical conditions that can be treated with medical cannabis.

Criterion 6. Experience in cultivating, manufacturing, or dispensing marijuana in compliance with government-regulated marijuana programs. 100 pts.

Measure 1, Cultivation plan: Applicants for cultivation endorsements and vertically integrated permits shall provide an overview of practices, policies and procedures for the cultivation of medical cannabis, including the following:
- Experience/education in botany, horticulture and phytochemistry and the application of those sciences in the cultivation of medical cannabis.
- Methods to control insects and pests that do not include the application of pesticides.
- Methods to prevent, minimize and test for plant disease and other contamination.
- Methods and practices related to odor mitigation, sanitation and airflow, and employee safety in cultivation environments.

Measure 2, Manufacturing plan: Applicants for vertically integrated permits shall provide an overview of practices, policies and procedures for manufacturing medicinal cannabis products, including the following:
- Experience/education in biochemistry, laboratory science, engineering and cannabinoid extraction methods.
- Description of products that the applicant intends to manufacture, including information on ingredients (both active and inactive), methods of production, and relevant patient information like dosing and administration method.
- Methods to prevent and test for contamination in extracted products.
- Health and safety standards for lab employees.

Measure 3, Dispensary plan: Applicants for dispensary endorsements and vertically integrated permits shall provide an overview of practices, policies and procedures for dispensing medical cannabis to qualified patients, included the following:
- Experience/education in the treatment of patients with qualifying health conditions.
- Patient education and counseling methods.
- Employee education procedures for patient-facing staff members.
- Plans to recruit and educate health care professionals regarding the dispensing of medical cannabis to qualified patients.
- Explanation of how the proposed dispensary location expands access to patients and caregivers.

Criterion 7. Workforce and job creation plan, including plans to involve women, minorities and military veterans in ATC ownership, management and experience with collective bargaining in cannabis industries. 100 pts

Measure 1, Labor Peace Agreement: Applicants shall provide a signed labor peace agreement that includes provisions to ensure the cultivation, manufacturing and dispensing of medical cannabis will not be disrupted by labor-related disputes. Failure to provide a signed agreement will result in a score of 0 for this measure. 30 pts.
Measure 2, Labor compliance plan: Applicants shall provide a plan to comply with labor laws (including but not limited the Fair Labor Standards Act, the Occupational Safety and Health Act, the Migrant and Seasonal Agricultural Worker Protection Act, the National Labor Relations Act, and all applicable state laws), and an overview of their experience related to collective bargaining and/or accommodating the rights of workers. 20 pts
Measure 3, Minority-owned, women-owned or veteran owned business certification: Applicants shall provide a copy of certification(s) issued by the Department of the Treasury, Division of Revenue which verifies MBE/WBE certification or VOB certification, or evidence that the applicant would otherwise meet the MBE/WBE certification or VOB certification requirements once generating revenue. Applicants with a certification will receive the full 30 pts. Applicants that provide evidence of meeting the criteria in the future shall receive partial credit, based on the strength of the evidence. The selection committee shall take into account related entities for this measure. 30 pts
Measure 4, Workforce and job-creation plan: Applicants will be scored on the extent to which they will involve individuals from socio-economically disadvantaged communities, individuals disproportionately impacted by enforcement of drug laws, and people with disabilities in the ownership, management and staffing of the proposed ATC. 20 pts

Interested parties may submit questions for regulators in advance of the NJ Department of Health webinar on August 2.If you would like to discuss this process, please reach out to a Greenspoon Marder attorney.

ABOUT GREENSPOON MARDER

Greenspoon Marder is a national full-service business law firm with 240 attorneys and 26 locations across the United States. We are ranked amongstAmerican Lawyer’s Am Law 200, as one of the top law firms in the U.S. since 2015. Since our inception in 1981, our firm has been committed to providing excellent client service through our cross-disciplinary, client-team approach. Our mission is to understand the challenges that our clients face, build collaborative relationships, and craft creative solutions designed and executed with long-term strategic goals in mind. We serve Fortune 500, middle-market public and private companies, start-ups, emerging businesses, individuals and entrepreneurs nationwide.

MEDIA CONTACT
Michelle Martinez Reyes, Chief Marketing Officer
954.333.4357 |[email protected]

https://www.gmlaw.com/news/new-jersey-greatly-expands-medical-marijuana-law/