On Wednesday, January 18, 2024, the NJ Cannabis Regulatory Commission (the “CRC”) approved regulations to allow cannabis consumption lounges where consumers will be able to buy and use cannabis products on-site. Continue reading “NJ Cannabis Regulatory Commission Approves Regulations To Allow Cannabis Consumption Lounges”
Changes to the Controlled Substances Act for Cannabis to make it a Schedule III Drug – The Winds May Be Blowing this Way
Earlier today, on August 30, 2023, the U.S. Department of Health and Human Services (HHS) officially recommended that cannabis be moved from Schedule I to Schedule III under the Controlled Substances Act (CSA) – a landmark recommendation from HHS which indicates that HHS no longer considers cannabis to be a drug with high abuse potential and no medical value.
After completing a scientific review into cannabis per a requested review from the Biden Administration, HHS advised the Drug Enforcement Administration (DEA) that it believes marijuana should be placed in Schedule III of the Controlled Substances Act.
Note, HHS’s recommendation is NOT binding on the DEA but given the report’s findings and growing public sentiment is likely that the DEA agrees with the recommendation and shifts its policy.
Historically, cannabis has been federally prohibited as a Schedule I controlled substance. As noted by many pundits, the rescheduling to Schedule III would have major implications for researchers who have long criticized the Schedule I classification that creates significant barriers to access for studies.
For researchers, this change would likely mean that they would no longer need to go through the onerous registration process with the DEA in order to access cannabis for studies as a Schedule III drug. The shift to Schedule III would also enable various federal tax deductions to become applicable to the cannabis industry and unlock value for them that is currently stuck in an onerous tax structure under the Internal Revenue Code. Schedule III drugs are not subject to the same onerous structure under federal rules.
The cannabis ball is now firmly in the DEA’s court as the DEA has the final authority to schedule a drug as Schedule III rather than Schedule I under the CSA (or transfer a controlled substance between schedules or remove such a drug from scheduling altogether).
Parting Hits – With Congress due to reconvene after Labor Day, and the Biden Administration looking for a win on moving this issue along, look for pressure to continue to mount for some type of Congressional action in the Banking arena under a SAFE legislation bill and for the DEA to move through their rule making process in a swift and firm manner.
Duane Morris has a full service cannabis group that helps clients and investors in a wide array of cannabis-related issues including, but not limited to, licensing, fundraising, intellectual property protection and real estate. If you have any questions, please do not hesitate to contact Brad Molotsky or the attorney with whom you regularly communicate at Duane Morris.
Adult Use Cannabis – the United States Virgin Islands passes adult use cannabis legislation!
In case you might have missed it with your year end festivities, the U.S. Virgin Islands became the latest U.S. region to legalize adult-use cannabis. Once regulations are finalized, the rules will allow residents and visitors to purchase medical and/or recreational cannabis products from licensed dispensaries. The bill was signed by Governor Bryant and is now effective.
The legislation also includes provisions proposed by Senators Sarauw and Bolques and automatically expunges cannabis possession charges in the territory.
Medical cannabis was previously approved in 2019 but the legislature continues to work on the applicable rules and regulations for the program.
It is estimated by Commissioner Richard Evangelista that it will likely be another 18-24 months before the government can finalize the applicable regulations for medical and adult use.
Sarauw said that even now, with adult-use reforms now heading to the governor’s desk, “we have done absolutely nothing to move cannabis forward.”
At the moment, current rules decriminalize the possession of up to an ounce of cannabis in the U.S. Virgin Islands.
Key Take Away – the USVI has now officially approved adult use cannabis which will likely spark (sorry, could not resist) multiple businesses and business lines to look to establish operations in the Territory. Grow, manufacture, dispensing and businesses supporting these operations are sure to continue their thought processes as to how to engage and become licensed pending final rules to be issued by the Department of Licenses and Consumer Affairs.
Duane Morris has an active Cannabis Team to help organizations and individuals plan, respond to, and execute on your cannabis and hemp initiatives. We would be happy to discuss your proposed project and how these new rules might apply to you. For more information or if you have any questions about this post, please contact Brad A. Molotsky, or Tracy Gallegos, Seth Goldberg, or Paul Josephson who co-head the Cannabis Group or the attorney in the firm with whom you in regular contact .
NJ Cannabis – 3Q 2022 Adult Use Sales Numbers Continue to Blaze
According to recent reporting from the NJ Cannabis Regulatory Commission (“NJCRC”), sales of legalized, recreational adult use cannabis in NJ exceeded $116.5 Million from July to September of 2022. This Q3 revenue figure represents a 46% increase from sales receipts in Q2 of 2022 of $80 Million generated from April to June 2022, when 13 state dispensaries expanded to adult cannabis sales for the first time.
By way of background, New Jersey legalized the sale of recreational marijuana for those 21 and over in April 2021. Sales were initially confined to 12 licensed dispensaries, which had approximately $24 Million in sales through May 2021, or an average of $5 Million per week in a state with 9.3 Million residents. By comparison, adult recreational cannabis generated approximately $80 Million in total sales between April and June 30 per the Cannabis Authority or $6.7M per week. Continue reading “NJ Cannabis – 3Q 2022 Adult Use Sales Numbers Continue to Blaze”
Cannabis: NJ Assembly Passes Decriminalization Bills for Possession of Certain Amounts of Cannabis
The NJ Assembly passed two bills, 1897 and 4269 that would decriminalize possession of certain amounts of cannabis, while reducing penalties for what would still be deemed to be an arrestable/convictable offense.
The measures, which were introduced at the Assembly Community Development and Affairs Committee on Monday, passed by a 63-10 vote.
Per NJBIZ, a Senate version (Senate Bill 2535) was introduced on March 16 to the Senate Judiciary Committee, but has not moved since introduction.
There will still be work to do to reconcile the Assembly bills with Senate Bill 2535 which was introduced on June 4th and referred to the Senate Judiciary Committee but much of the same language was used in both the Assembly and Senate versions.
One the key difference between the Senate and Assemble versions is the treatment regarding possession of up to a pound of marijuana. Yes, you read that right – a POUND.
Under the Senate bill, possession of up to a pound of cannabis will no longer be an arrestable offense, replacing it with a written warning for first offenses and a $25 civil penalty or community service for any afterward.
The Assembly bills instead call for a reduced penalty for possession of up to a pound and thereby lowers a first-time offense from 18 months to 6 months of imprisonment, and fines from $10,000 to $1,000. Any subsequent offenses would be met with the current level of punishment.
Possession of up to 2 oz. of cannabis, under current state law, has sentencing guidelines for up to 18 months in jail and fines of up to $10,000.
Under current law, possession of between 1 pound and 5 pounds is punishable with imprisonment between 3-5 years or fines up to $25,000, or both.
These bills come a few months before the upcoming 2020 presidential election, where voters will decide whether recreational marijuana should be legalized for adult-use. Currently, polling has support for legalization at 67% among NJ residents.
Duane Morris has a robust Cannabis Practice Group to assist clients in all facets of the cannabis arena including formation, licensing, fund raising, regulatory, real estate, and intellectual property. Contact your Duane Morris attorney for more information. Prior Alerts on the topic are available on the team’s webpage.
For Further Information:
If you have any questions about this post, please contact Brad A. Molotsky, Paul Josephson or the attorney in the firm with whom you are regularly in contact.
Be well and stay safe!
Cannabis – Proposed Federal Bill, the CLAIM Act, to ease access to insurance for Cannabis Related Businesses
Earlier this week (March 18, 2021), U.S. Senators Jeff Merkley (R-KY), Bob Menendez (D – NJ) and Rand Paul (R – KY) introduced a law, the Clarifying Law Around Insurance of Marijuana Act of 2021 (the “CLAIM Act“) to enable access to insurance coverage for cannabis businesses.
Named the “Clarifying Law Around Insurance of Marijuana Act of 2021“, the bill is intended to ease federal restrictions around insuring businesses related to cannabis growth, processing and dispensing.
Per NJ BIZ, 44 states have enacted some type of legal cannabis – whether medical, recreational or both. This past election season saw voters in New Jersey, Arizona, Montana, Mississippi and South Dakota approve legal adult use cannabis; and last month, New Jersey enacted legislation to officially legalize and regulate adult use cannabis.
The goal of the CLAIM Act according to Senator Paul is to stop legitimate businesses from being shut out from obtaining basic business protections.
Insurance Products – Under the proposed CLAIM Act, cannabis businesses would be permitted full and legal access to insurance products such as worker’s compensation, property, casualty and title insurance. Currently, state-authorized cannabis businesses are often denied access to the insurance market because the businesses could be prosecuted or face penalties under the Controlled Substances Act (a federal law).
Policy Limitations – Under the proposed CLAIM Act, insurers couldn’t be penalized or discouraged from providing coverage to a state-sanctioned and regulated cannabis business or ancillary business; and policies could not be limited solely because the insurer engaged with a cannabis-related business.
Supervisory Actions – Under the proposed CLAIM Act, according to NJ Biz, the federal government wouldn’t be able to take any adverse or corrective supervisory action on a policy to an owner or operator of a cannabis-related business or real estate or equipment that is leased to a cannabis-related business, solely because the owner or operator is engaged with cannabis or cannabis-related business.
The CLAIM Act represents a big step for cannabis related and ancillary businesses and would enable them to more easily access insurance related products that up until this point have been denied to them.
Duane Morris has an over 62 person Cannabis Practice Group that focuses on regulatory licensing, funds creation and raising, structuring, real estate related lease and ownership issues and intellectual property matters in the Cannabis arena.
If you have questions regarding the above post, please do not hesitate to contact Brad A. Molotsky, Tracy Gallegos, Christiane Schuman Campbell, Paul Josephson or Seth Goldberg or any other attorney you regularly contact at the firm.
Be well and stay safe.
NJ – Governor Murphy signs Adult Use Cannabis Bill – Now Adult Use Cannabis is Law of the Garden State
Earlier today, February 22, 2021, NJ Governor Murphy signed legislation to create an adult use/recreational marijuana marketplace, decriminalize cannabis and loosen certain penalties for underage possession of the drug and alcohol. NJ joins 13 other states (and the District of Columbia) which have legalized adult use marijuana including Alaska, Arizona, California, Colorado, Illinois, Maine, Massachusetts, Michigan, Montana, Oregon, South Dakota, Vermont, Washington and Washington, D. C.
The Assembly and Senate passed a compromise bill to address most of Governor’s concerns that had held up the signing of the Bills – these areas mostly focused on easing penalties on underage possession of both alcohol and marijuana.
Under the law, NJ adults may legally purchase and possess up to 1 ounce of marijuana; retail sales will be taxed with 70% of such revenue being dedicated to lower income communities; a Cannabis Regulatory Commission will be established and oversee licensing; NJ will allocate 37 new grower licenses over the next 2 years; and currently licensed medical cannabis retail operations will be eligible to sell adult use cannabis.
The firm has an active Cannabis and Hemp practice, with over 65 lawyers who counsel businesses and investors in the regulatory and licensing area, the funds formation and fund raising arena, the leasing and acquisition of real estate fronts and the patents, trademarks and IP area of the cannabis and hemp industry.
We can be reached at any of the following email addresses and will direct your inquiry to the appropriate person within our Cannabis and Hemp Taskforce – bamolotsky@duanemorris.com; tagallegos@duanemorris.com; ppjosephson@duanemorris.com; or sagoldberg@duanemorris.com.
Be safe.
Cannabis – NJ Legislature Passes Historic Adult Use Cannabis Legalization Bill, Off to the Governor’s Desk
Earlier today, Thursday, December 17, 2020, the NJ Legislature passed an historic bill legalizing and taxing recreational marijuana for adults use.
The 240-page Assembly Bill 21 passed by a 49-24 vote with 6 abstentions in the Assembly and a 23-17 vote in the state Senate.
The final bill creates a 5-member Cannabis Regulatory Commission to oversee the new market, as well as the existing medical marijuana market.
Licenses for cultivators are capped at 37 for the first 24 months following the bill’s enactment.
Cannabis sales will be taxed at 7% – which includes the 6.625% sales tax on retail sales, and a tax on cultivators, which adds up to a 7% rate in total.
70% of sales tax revenue and all the money from a tax on cultivators are dedicated toward legal aid, health care education and other social services for lower-income, minority communities.
The remaining 30% in sales tax revenue will go to fund the Cannabis Regulatory Committee and to help fund local police departments for the training of “Drug Recognition Experts”.
Per NJBIZ, employers must have a “reasonable suspicion” that their workers are high on the job in order to conduct a drug test. And the test must be accompanied by an assessment from a Drug Recognition Expert to ensure the person’s behaviors match someone who’s high.
That would allow workers to use marijuana while off the clock, just as with alcohol.
Separately, another measure, Senate Bill 2535, was passed which ends arrests for possession of up to 6 ounces of cannabis, while Senate Bill 3256 will also lower penalties for possession of psilocybin (i.e., mushrooms).
Duane Morris attorneys in offices throughout the U.S. have extensive experience with the wide array of issues attendant to legal cannabis business activities, including real estate development and leasing; licensing for cultivation, processing and dispensing; litigation; banking and finance; raising and deploying capital; protecting intellectual property; public company representation and SEC filings; land use and zoning; healthcare and research; and taxation.
For more information on this blog post, do not hesitate to contact Brad A. Molotsky or Paul Josephson or any of the other Duane Morris attorneys you regularly engage with.
NJ Lawmakers Agree on Adult Use Cannabis Legislation – Vote slated for later in December
According to lawmakers, a deal has been reached to compromise on legislation to enable adult use cannabis in NJ.
The compromise bill allows for 37 licenses for marijuana growers during the first 2 years of legal sales. The license limit does not apply to micro-licenses, which can be granted to businesses with 10 or fewer employees.
Minority Communities – 70% of the sales tax revenue as well as all of the funds raised by a tax on cultivators will be used to support restorative programs for legal aid, health care, mentoring in minority communities.
NJ voters approved a ballot question seeking to amend the state constitution and legalize marijuana on Nov. 3.
Per NJ Biz, legislators reached another deal on that issue earlier last week to pass a bill that will allow people to possess up to 6 oz. of marijuana.
Lawmakers are also expected to move forward with the bill to decriminalize marijuana later in December.
Senators also introduced a new constitutional amendment that could go before voters in 2021. It seeks to solidify the tax structure outlined in Senate Bill 21, ensuring that the money only go to social and racial justice causes, and not the state’s general fund.
Given the current legislative calendar, it is likely that the legalization bill will go before the Senate Judiciary Committee on Dec. 14 and for a full vote on Dec. 17, 2020.
Duane Morris attorneys in offices throughout the U.S. have extensive experience with the wide array of issues attendant to legal cannabis business activities, including licensing for cultivation, processing and dispensing; litigation; banking and finance; raising and deploying capital; protecting intellectual property; real estate development; public company representation and SEC filings; land use and zoning; healthcare and research; and taxation.
For more information on this blog post, do not hesitate to contact Brad A. Molotsky or Paul Josephson or any of the other Duane Morris attorneys you regularly engage with.
Cannabis: NJ Department of Health issues 2 New Dispensary Permits bringing the total number of Dispensaries in NJ to 11
Earlier this week, the New Jersey Department of Health (DOH) issued permits allowing Zen Leaf Elizabeth (Verano NJ) in Elizabeth and Columbia Care in Vineland to begin dispensing medical marijuana.
These 2 new operations bring the total number of operating dispensaries in the state to 11. Zen Leaf Elizabeth is scheduled to open Friday, May 29 and Columbia Care will likely open in early June.
The 9 other ATCs currently dispensing medical marijuana include Greenleaf Compassion Center of Montclair, The Botanist (Compassionate Care Foundation) of Egg Harbor and Atlantic City, Garden State Dispensary of Woodbridge and Union Township, Breakwater Alternative Treatment Center of Cranbury, Curaleaf NJ, Inc. in Bellmawr, Harmony Dispensary in Secaucus and Rise in Paterson.
In March, the DOH issued several waivers to improve ATC operations during the COVID-19 pandemic. These included waivers that allowed for curbside pick-up, telephonic consultations (instead of in-person), volume-based discounts and reduced caregiver fees.
Participation in the medical program continues to grow. According to the DOH, there are currently over 77,000 patients, 3,000 caregivers and 1,100 physicians enrolled.
Patients and caregivers can visit the Division of Medicinal Marijuana’s website if they choose to change their preferred ATC. http://www.nj.gov/health/medicalmarijuana/
The change can also be made by calling the Customer Service Unit of the Division at 844-419-9712 and does not require changing ID cards.
Patients can refer to the FAQ section of the DOH’s website for additional information. http://www.nj.gov/health/medicalmarijuana/pat_faqs.shtml/ Active physicians enrolled in the program are listed by county and medical specialty on the website.
Duane Morris has a robust Cannabis Practice Group to assist clients in all facets of the cannabis arena including formation, licensing, fund raising, regulatory, real estate, and intellectual property. Contact your Duane Morris attorney for more information. Prior Alerts on the topic are available on the team’s webpage.
For Further Information:
If you have any questions about this post, please contact Brad A. Molotsky, Paul Josephson or the attorney in the firm with whom you are regularly in contact.
Be well and stay safe!