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AUTHOR: Patrick McKnight
PUBLISHER:  CANNABIS LAW REPORT

April 30, 2019

 

Over a year after reform advocates first began predicting swift legislative victory, the recreational use of cannabis remains illegal in New Jersey. When Governor Murphy and Senate President Sweeney agreed on a $42 per ounce flat tax in February, legalization supporters once again hoped for quick adoption of New Jersey Assembly Bill 4497 (“A4497”). Once again, the much-publicized March 25th vote was called off due to lack of support. Now legislators have a limited window to act before the state budget deadline on July 1st.

Hopes for reform have ebbed and flowed since Governor Murphy was elected on a platform including legalization within his first 100 days. Despite his party controlling both the Senate and Assembly, the Governor has only been able to expand the medical program since taking office. That executive action doubled medical marijuana enrollment in just six months.

While the media has spilled considerable ink analyzing the political drama, actual details of the bill itself have received considerably less attention. A4497 attempts to incorporate lessons learned from other legalization regimes in Colorado, Washington, and California. Some critics argue certain provisions in the bill are too ambitious. Others wish the bill would go even farther. These disputes will need to be resolved before the ongoing 18-month saga finally comes to a vote in Trenton.

 

What’s in the Bill?

A4497 generally employs a vice-regulation model common to most legalization regimes. Individuals would be permitted to lawfully possess up to one ounce of marijuana. The bill would establish a Cannabis Regulatory Commission. This powerful, five-person regulatory body would have overall authority to regulate and control the cannabis industry. Three members would be appointed by the Governor, one by the Senate President, and one by the Assembly Speaker. The commission would make bi-annual reports to the Governor and legislature.

One of the controversial elements of the bill are the much-debated expungement provisions. As currently written, nearly all cannabis-related offenses would be expunged. The only offenses not subject to expungement would involve possession of over five pounds or within close proximity to a school. Disorderly persons convictions may also be expunged. Drafters considered this provision significant because many cannabis offenses are pled down to this lesser offense. The bill would also prohibit law enforcement from using the smell of cannabis as probable cause or reasonable suspicion of a crime.

The language of the plan would allow for an “expedited” but not an automatic expungement system. A robust expungement program would be an immense logistical process and opponents suggest the legislation lacks adequate planning for its implementation. Other critics worry expungements could potentially extend to more serious offenses including weapons.

The bill proposes a Cannabis Control Commission to issue four tiers of licenses. Of no small controversy is the promotion of participation by disabled veterans, women, and minority licensees. Some supporters are insisting on stronger “social justice” provisions to require numerical set-asides for these groups. As written, the bill seems to consider participation by these groups as a non-binding goal. 15% of licenses would go to minorities, 15% to disabled-veterans, and 25% to “micro-businesses.” The bill does not include a cap on the total number of available licenses. “Impact Zones” are defined based on crime, poverty, and cannabis arrests and receive preferential access to licenses.

Four tiers of licenses cover every step of cannabis production including growers, processors, wholesalers, and retail establishments. Licensees will be required to pass a mandatory background check and obtain a Labor Peace Agreement from the union in order to operate. As a practical matter, this will likely result in a requirement to exclusively hire union employees.

Over 60 New Jersey municipalities have already passed ordinances prohibiting cannabis sales within their city limits. These municipalities would need to take further action within 180 days of legalization. Beyond this 180-day window local governments cannot prohibit retail establishments within a five year opt-out period.

Also noteworthy in the bill is the proposal of Cannabis Consumption Areas. These may be authorized by local governments and would attach only to Class 4 licenses (retail establishments). Cannabis Consumption Areas could be indoor or outdoor, but the consumed cannabis must be purchased on the premises. Beyond these areas public use would be prohibited, although delivery would be allowed. The bill is silent on dram shop liability.

The bill attempts to limit most employment discrimination based on cannabis use, including hiring and firing. In particular, employers would not be allowed to consider previous cannabis arrests. However, the bill would still allow employers to consider cannabis use if deemed reasonably related to the requirements of the job. Nothing in the bill would require an employer to amend their drug free workplace programs. The bill would also prohibit discrimination in the issuance or denial of mortgages arising from cannabis use. Cannabis-use could not be the sole basis for child custody decisions, although it could still be considered among other relevant factors.

The bill includes provisions regarding labeling, packaging, and advertising. Labels would need to include warnings, as well as information about THC levels, weight, serving size, growth method including pesticide information, and strain.

Finally, A4497 contains a safe harbor provision designed to comply with federal laws and the Supremacy Clause. The bill explicitly states it does not compel violation of any federal laws.

 

Where does the Bill go from Here?

“Marijuana prohibition has failed,” said Sen. Nicholas Scutari, one of the chief architects of the bill. “It is time to end the detrimental effect these archaic drug laws are having on our residents and make adult use marijuana legal.”

There is no proposed date for a vote, but supporters are hoping to bring it to the floor before the end of May. New Jersey currently spends about $127 million a year enforcing marijuana possession. Reform advocates often point to an ACLU study which indicates minorities are roughly three times more likely to be arrested for marijuana offenses in New Jersey.

Legal cannabis is expected to become a billion-dollar industry in the Garden State.