All posts by Paul P. Josephson

On Your Mark, Get Set, Go: Revised New Jersey Medical MJ RFA Details Announced

It’s official: if you’re seeking a medical cannabis license in New Jersey, cancel your summer vacation plans. July and August promise to be very busy months. Today, the NJ Department of Health materially revised its current Request for Applications. Details below.

Although the number of permits to be issued this round has shrunken considerably, tomorrow, July 2, Governor Phil Murphy will be signing a major medical cannabis bill that substantially increases patient access, establishes a new regulatory overseer for the cannabis sector, and promises a much larger round of licensing (integrated and stand alone) this fall.

Key takeaways for the pending RFA round revised today:

  • Book It: Application forms will be released on July 15, 2019, and are due on August 21, 2019 at 3pm for dispensaries and August 22, 2019 at 3 pm for cultivation and integrated applications.
  • How Many? In total, the Department will seek up to 4 vertically integrated permits, up to 5 cultivation endorsements, and up to 15 dispensary endorsements.
  • In each of the three regions (North, Central, South) the Department will seek to issue up to 2 cultivation endorsements, 5 dispensary endorsements and 1 vertically integrated (cultivation, processing and dispensing) permits.
  • A fourth vertically integrated permit will be issued, with the region to be determined based on quality of application and patient need. “Because the patient population is expanding so quickly and is expected to accelerate, the Department anticipates that this flexible approach for up to 1 vertically integrated permit will allow for 1) the most qualified applicant to be chosen and 2) that the award can most adequately respond to real time changes in enrollment.”
  • No processing permits will be issued this round.
  • Initial Cultivation Canopy Limits: To provide opportunities for different sized businesses to participate in the RFA, the Department will seek to issue cultivation endorsements in the following tiers of canopy size:
    – Up to 5,000 Square Feet: up to 1 cultivation endorsement.
    – 5,001 square feet to 20,000 Square Feet: up to 2 cultivation endorsements.
    – 20,001 square feet to 30,000 Square Feet: up to 2 cultivation endorsements.
  • According to NJDOH, these cultivation tiers “represent the ranges of starting cultivation canopy at the ATCs awarded as part of this RFA. The maximum initial canopy for any of the awardees is 30,000 square feet. Vertically integrated applicants may choose any of the canopy tiers.”
  • Limits on Number and Combination of Applications:
    Entities and individuals may seek up to three total permit endorsements as part of this RFA. Applicants may only apply for one cultivation endorsement and may only submit one application per region. A separate application is required for each endorsement. An applicant for a vertically integrated permit may submit one application because all endorsements will be located within the same region. Therefore, the only applicants eligible to submit an application for more than one endorsement per region in this RFA are applicants for vertically integrated permits.
  • Applicants cannot submit for both vertically integrated permits and individual endorsements.
  • Applicants submitting for individual endorsements can submit applications for up to three endorsements, but they can’t be in the same region(s).
  • No applicant shall be awarded more than one permit pursuant to this RFA, and no applicant shall hold more than 1 cultivation endorsement, 1 manufacturing endorsement, and 1 dispensary endorsements as a result of the awards made pursuant to this RFA.
  • Except for the vertically integrated permits, no other entity shall be awarded both a cultivation endorsement and a dispensary endorsement pursuant to this RFA.
  • Current ATC permit holders (including awardees from December 2018) are not eligible to participate in this RFA.
  • Get Your Legal Documents Ready: NJDOH has substantially increased the disclosure requirements (of interested parties and documentation of virtually all business deals underlying an application) this round to ensure all parties interested in an application are known to the NJDOH at the time of application.
  • Questions, Comments and Further Information: NJDOH will accept questions on the RFA until July 26, and will conduct a preapplication webinar on August 2. Potential applicants are strongly encouraged to present any concerns, objections or suggestions relating to the substance of the RFA by July 26, if not sooner.
  • No Deadline for Award: NJDOH has not announced a deadline for making awards.
  • No License Squatting: Applicants awarded the right to complete the ATC permitting process must complete facility build out and be ready to commence operations within 18 months (cultivation endorsements and vertically integrated permits) or 12 months (dispensary endorsements). If an awardee is not permitted at the end of the above timeline, or the materials submitted with the application are found to be not accurate or truthful, as applicable, the award may be rescinded.
  • Criteria, Weighting and Page Limits:
    Applicants must observe a strict 100 page limit per endorsement sought. Criteria weighting 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: 10 pts
    • Measure 2. Environmental impact plan: 10 pts
    • Measure 3, Quality control and quality assurance plan: 10 pts
    Criterion 2. History of compliance with regulations and policies governing government-regulated marijuana programs. 20 pts
    • Measure 1, 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. 20 pts
    Criterion 3. Ability and experience of applicant in ensuring an adequate supply of marijuana. 20 pts.
    • Measure 1, Financing plan: 20 pts.
    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. 20 pts.
    Criterion 5. Ability to provide appropriate research data. 10 pts
    • Measure 1, Research contributions: 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. 10 pts
    Criterion 6. Experience in cultivating, manufacturing, or dispensing marijuana in compliance with government-regulated marijuana programs. 100 pts.
    • Measure 1, Cultivation plan.
    • Measure 2, Manufacturing plan.
    • Measure 3, Dispensary plan.
    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 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
  • Scoring criteria reflect strong union (50 out of 300 total points), MBE/WBE (30 of 300 points) and social justice (20 of 300 points) preferences.

This post summarizes key terms of interest.  Potential applicants should review the complete terms of the RFA at https://www.nj.gov/health/medicalmarijuana/alt-treatment-centers/applications.shtml, and regularly consult the NJDOH website for ongoing updates.

NJ Governor Murphy Projects Adult Use Cannabis Legalization by January 2019

In his first budget address, New Jersey Governor Phil Murphy today reaffirmed his commitment to promptly expand the state’s currently moribund medical marijuana program, and the full legalization of adult use marijuana by January 1, 2019.

In his address, Governor Murphy explained:

We must also make sure we are investing not just in individuals, but also in entire communities – particularly our long-overlooked urban neighborhoods. We must recommit to opening the doors to economic opportunity for the thousands of young men and women – especially young men and women of color – jailed for non-violent drug-related offenses. Our current system has failed them, and put a mark on them that they will carry for their entire lives, preventing them from furthering their educations or getting jobs.

It’s the principal reason I advocate for legalizing adult-use marijuana. According to research, New Jersey spends upwards of $140 million per year adjudicating low-level marijuana possession offenses. And, marijuana-related arrest rates are tilted three-to-one against African-Americans, even though rates of marijuana use are similar among races.

These resources must have a better use, whether to tackle the trafficking of illegal guns, provide stronger community policing, or to crack the back of our opioid epidemic, which was devastating our urban centers long before it made headlines.

I greatly respect those in this chamber who have proposed decriminalizing possession of small amounts of marijuana, and I thank them for recognizing the importance of doing what’s right and just for those who carry criminal records for past possession arrests. But decriminalization alone will not put the corner dealer out of business, it will not help us protect our kids, and it will not end the racial disparities we see.

If these are our goals – as they must be – then the only sensible option is the careful legalization, regulation, and taxation of marijuana sales to adults.

Legalization will allow us to reinvest directly in our communities – especially the urban neighborhoods hardest hit by the misguided War on Drugs – in their economic development, in health care and housing, child care and after-school programs, and other critical areas. These investments will pay dividends far greater than the cost of mass incarceration.

I did not come to this overnight, myself. After all, we are the parents of four children under the age of 21. But from the standpoint of social justice, and from the standpoint of protecting our kids and lifting up our communities, I could not arrive at any other conclusion.

In the Budget in Brief submitted to the Legislature today, the Administration stated that it “plans to legalize adult-use marijuana by January 1, 2019. The State will also move forward with expanding access to medical marijuana to alleviate patient suffering.”

The Budget projects $80 million in new revenue from legalizing marijuana, without specifying tax rates or the number of dispensaries the Governor anticipates.  This is part of $2 billion in new revenues to meet the $37.5 billion budget that also includes a millionaires tax ($765 million), restoring the sales tax rate to 7% ($581 million) and business tax modernization ($110 million).

Next on the Governor’s agenda: the anticipated release of substantially revised regulations governing New Jersey’s medical marijuana program that currently consists of only 6 vertically-integrated, nonprofit dispensaries serving less than 15,000 patients.  The Governor has promised rules by March 24 designed to increase the qualifying conditions for which marijuana may be prescribed and to increase patient access to medical marijuana.

Medical marijuana expansion can be largely accomplished by the Governor without legislation, though it is anticipated the  Legislature is expected to consider changes beyond the Governor’s regulatory authority, including clear authorization to dispense edible products to medical marijuana patients.

 

 

 

NJ Governor Murphy Signs Executive Order Expanding New Jersey’s Medical Marijuana Program

Just a week in office, Governor Phil Murphy has taken the first step in process of bringing much needed reform to New Jersey’s medical marijuana program. He signed an Executive Order today calling for his Commissioner of Health and the Board of Medical Examiners to report back in 60 days concerning expansion of the currently limited medical marijuana program consisting of five operating centers.

Gov. Phil Murphy signs executive order
Gov. Phil Murphy signs executive order

New Jersey’s existing medical marijuana program is problematic and ineffective for a number of reasons. The current program allows for a very limited number of qualifying patient conditions, has an overly burdensome regulatory process and associated administrative fees that discourage both doctor and patient participation, has an arbitrary and unnecessary limit on the amount of dispensaries permitted to operate in the state. It also places illogical limits on the types of medical cannabis strains permitted to be sold in each dispensary.

Stay tuned for more developments.

Appellate Ruling Confirms New Jersey’s Authority to Reschedule Marijuana, But Does Not Mandate Rescheduling

By Paul P. Josephson

In a rare 2-1 decision, New Jersey’s intermediate appeals court has overturned the decision of New Jersey’s Director of Consumer Affairs that he does not have the authority to reschedule marijuana from a Schedule I to Schedule IV substance.  The dissent affords the state the right of appeal to the New Jersey Supreme Court, and the state quickly confirmed it will appeal.

Contrary to several early press reports, including Associated Press coverage reprinted nationally, the appellate judges did not require the Director to review Schedule I status.  Continue reading Appellate Ruling Confirms New Jersey’s Authority to Reschedule Marijuana, But Does Not Mandate Rescheduling

DM Speaks on New Jersey Recreational Cannabis Bill

By Paul P. Josephson

In anticipation of electing a new governor in November 2017 and enactment of adult use (recreational) cannabis legislation in the first half of 2018, the New Jersey Cannabis Industry Association and industry thought leader Weedmaps sponsored the first education seminar on Cannabis Policy, Zoning & Licensing designed for New Jersey public officials on September 14 in New Brunswick, New Jersey.

Moderated by David O’Brien, Director, East Coast Government Relations, Weedmaps, the panel discussed what constitutes good local cannabis policy, what has worked and not worked in legalized jurisdictions, and how to create a responsible local marketplace for the cannabis industry while ensuring public safety, protecting public health, and deterring youth from use.  Continue reading DM Speaks on New Jersey Recreational Cannabis Bill