brad a molotsky – Cannabis Industry

April 8, 2024April 8, 2024 by Duane Morris

Webinar: Mainstreaming Cannabis: Real Estate and Valuation

The Duane Morris Cannabis Industry Group, the American Trade Association for Cannabis and Hemp and Centri Business Consulting present Mainstreaming Cannabis: Real Estate and Valuation on Thursday, April 25, 2024, from 12:00 p.m. to 1:00 p.m. Eastern.

As with any type of business, the cannabis industry faces real estate concerns ‒ but with particular lease-related issues unique to the field. Facilities for the cultivation, manufacturing and distribution of cannabis and cannabis products are important not only to cannabis operators, but also investors and landlords, all of whom face federal, state and local regulations that can vary by location. Our panel will discuss the interplay between state and federal laws as it relates to cannabis regulations and implications for real estate transactions. REGISTER FOR THE WEBINAR.

December 17, 2020May 18, 2026 by Duane Morris

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.

May 28, 2020May 18, 2026 by Duane Morris

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!

February 20, 2019 by Brad A. Molotsky

New Jersey – One step closer to Adult Use, Recreational Marijuana Legalization

Earlier this week, Governor Murphy, Senate President Stephen Sweeney, D-3rd District, and Assembly Speaker Craig Coughlin, D-19th District, reached a tentative agreement on key pieces of adult use marijuana legislation, overcoming one of the key sticking points of how to tax the product sales, reaching a collective consensus of a $42 an ounce tax.

According to a recent Monmouth University Poll, 6 in 10 New Jersey adults support legalizing recreational marijuana. The February poll interviewed 604 New Jersey adults between Feb. 8 and 10, found that 62% of respondents favored legalizing small amounts of marijuana for personal use, compared to 32% of adults who said no to the prospect of legal marijuana in New Jersey.

68% of respondents said it would support the state economy, while 40% of respondents who support legal cannabis said it would boost tax revenue for New Jersey.
From an age perspective, 81% of millennials (i.e., ages 18 to 34), support legalizing marijuana, compared to 74% of adults ages 35 to 54, and 67% of adults 55 and older.

One of the other bones of contention that was overcome involved who will control the oversight commission. The current agreement would create a 5-member Cannabis Regulatory Commission to oversee the state’s marijuana industry, and Governor Murphy would be able to appoint 3 of the members without requiring Senate approval.

A earlier New Jersey marijuana legalization bill that was advanced by Assembly and Senate commitees in the fall of 2018 included a 12% sales tax. Under the Monday compromise, adult use marijuana purchasers will pay the same tax rate no matter what amount they purchased – meaning, $42 for an ounce, $21 for a half-ounce, $10.50 for a quarter-ounce or $5.25 for an eighth-ounce.

The Senate Budget and Appropriations Committee vote was 7-4 in favor, while the Assembly Appropriations Committee voted 7-3 to advance the bill. If legislation is moved, the “Marijuana Legalization Act” would allow users 21 years old and up to possess up to an ounce of marijuana.

January 19, 2019 by Brad A. Molotsky

Bill 420 – It’s “That” Time Again!

On 1-9-19, Rep. Earl Blumenauer (D-OR) introduced H.R. 420, the “Regulate Marijuana Like Alcohol Act.” Blumenauer, the co-sponsor of the Rohrabacher–Blumenauer amendment, better known as the on-going appropriations provision that prohibits the Justice Department from spending federal funds to enforce federal law that is in conflict with state medical cannabis laws.

Proposed Bill 420 is a total overhaul of the federal government’s treatment of marijuana. Among other things, the bill:

1. Decriminalizes marijuana by removing it from the Controlled Substances Act;
2. Amends the Federal Alcohol Administration Act to enable the Secretary of the Treasury to issue permits to those who want to to manufacture, distribute, or sell marijuana;
3. Transfers jurisdiction from the DEA to the Bureau of Alcohol, Tobacco, Firearms and Explosives;
4. Prohibits widespread advertising for marijuana; and
5. Grants to the FDA the same authority for marijuana as it has for alcohol.

Rep. Blumenauer noted: “Congress cannot continue to be out of touch with a movement that a growing majority of Americans support. It’s time to end this senseless prohibition.” In this vein, per a Pew Research Center study released last fall, nearly 66% of Americans support legalization at the federal level.

The new co-chairs of the 2019 bipartisan Congressional Cannabis Conference are Rep. Barbara Lee (D-CA) and Dave Joyce (R-OH), Rep. Earl Blumenauer (D-OR) and Don Young (R-AK).

January 12, 2019January 14, 2019 by Brad A. Molotsky

Opportunity Zones – Government Shut Down Stalls Treasury Responses and requested clarifications

Putting aside partisan points of view on the wall and whether a government shut down to get a wall paid for is a good idea, the shut down is already impacting US Treasury’s ability to finalize new regulations to clarify certain aspects of the Opportunity Zone program.

Comment letters have been sent in by various trade association and OZ groups my team and I are involved with to the IRS and Treasury but, unfortunately, the clarity we are looking for will need to wait until the shutdown has been resolved plus two weeks thereafter (at least) per a notice posted in the Federal Register. Open issues that the Real Estate Roundtable, Novogradac’s OZ team and others are seeking include the following:

Defining original use and substantial improvements
Two tiered structures and the “working capital” impact – 31 months
How vacant land might qualify as “original use” property
Clarifying how and when the 180 day rule applies to certain pass through entities
Clarifying how Section 1231 gains of pass through entities are eligible for deferral
Seeking a removal of the fixed end of 2047 for sale purposes to qualify for a stepped up basis
Clarification regarding the methodology for applying the 90% and 70% asset tests
Requesting limitations on non compliance penalties to the portion of the aggregate assets of a QOF that are funded with gains for which a deferral election has been made
Definition of “substantially all” – keeping the definition at 70% and generally requiring real property businesses to hold 90% of tangible property inside a QOZ
Clarifying if property that straddles a QOZ can treat the improvements as being all within the QOZ
Clarifying the requirement that a substantial portion of the intangible property of a QOZB be used in the “active conduct of a trade or business” in the QOZ
Clarifying the timing of capital gains and dividend treatment for REITs

While our clients are still closing deals and effectively using the OZ program to defer, reduce and ultimately, hopefully, create a capital gain free sale after 10-years at the federal level, additional clarity would, in fact, be nice.

Border security for sure, but let’s get these rules clarified now so we can spur investment where its needed without the histrionics and the child like tantrums.

See attached Novogradac letter to US Treasury for more details – https://www.novoco.com/system/files/group/Opportunity%20Zones%20Working%20Group/novogradac_wg_comment_letter_proposed_regs_122818.pdf