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!

NJ Legislators Opt to allow Voters to Decide on Cannabis Legalization in NJ instead of Legislating such a Change – Brad A. Molotsky, Esq. – Duane Morris LLP

New Jersey’s top lawmakers have decided to let voters decide on legalization of cannabis during the 2020 presidential elections.

The constitutional amendment introduced today, November 18, 2019, by Senate President Stephen Sweeney and Senator Nicholas Scutari would legalize the use of recreational marijuana for anyone at least 21 years of age, and establish a Cannabis Regulatory Commission to oversee the new market.

The amendment does NOT detail the taxation rate, which was $42 an ounce in the original bill. It is also not clear if the commission will have 5 members, like the original bill.

According to NJBiz., Gov. Phil Murphy and legislative leadership long-resisted pursuing legalization via a ballot question because any, inevitable, changes to the program would have to go before voters in yet another ballot referendum.

“We made further attempts to generate additional support in the Senate to get this done legislatively, but we recognize that the votes just aren’t there,” reads the joint statement from Sweeney, D-3rd District, and Scutari, D-21st District.

To appear on the 2020 ballot as a constitutional amendment, both houses would need to pass the measure by a super-majority by the summer, or they would need to pass it 2x in both houses by a simple majority for 2 years in a row.

Just hours earlier, several progressive and social justice groups made a plea to legislative leadership to push through a legalization bill, pointing to a growing increase in low-level cannabis offenses which have disproportionately affected people of color.

NJ Assembly Delay Vote on Medical Cannabis Expansion – likely due to concern over potential Governor’s veto

NJ Assembly leaders announced they would not be voting on the proposed expansion of medical cannabis licenses earlier today – 6-10-19.

Instead, per NJ.com, legislators are going to attempt to work with Gov. Phil Murphy’s office on a plan that’s more amenable to him and the state Legislature, said Kevin McCardle, a spokesman for Assembly Democrats.

The Governor’s team has previously raised objections to a few provisions in the medical expansion bill, including the creation of the Cannabis Regulatory Commission, which would assume oversight of the industry. Currently, the state Department of Health regulates the medical marijuana program.

We will keep an eye out for any collaborative resolution of the medical licensure issue and report back.

#Duane Morris – Brad A. Molotsky, Esq.

NJ Senate and Assembly close in on expansion of medical use Cannabis – Brad A. Molotsky, Esq. – Duane Morris

The New Jersey Senate voted 33-4 yesterday (Thursday) to advance a bill that is intended to increase medical marijuana sales and likely create new business opportunities in the state.

Per Marijuana Business Daily, before the vote, the Senate amended Assembly Bill 10 to allow marijuana workers to become union members.

The Bill will now return to the NJ Assembly for a vote to approve the Senate’s modification.

If the Bill is ultimately signed, the measure will:

– Create a new regulatory commission for medical marijuana.
– Pave the way for the state to issue additional business licenses.
– Allow cannabis home delivery.
– Ease restrictions on the process for recommending medical marijuana.

Currently there are 12 vertically integrated medical cannabis licenses that have been granted in NJ.

We will continue to track this development and report back as it get’s closer to passage in the Assembly. -Brad

California Cannabis Banking Bill – Moving Along with 35-1 Senate Vote in Favor – Brad A. Molotsky, Esq.

The CA Senate voted 35-1 to allow banks and credit unions to accept cash deposits from marijuana retailers.

Per reporting from the Star Tribune, those banks would be permitted to issue special checks to the retailers that could only be used for certain purposes, including paying taxes and California-based vendors.

State lawmakers are of the view that such banks would make it easier for licensed cannabis retailers to pay their taxes, which fell far short of expectations in the first year after legalization.

“This is as close as we can get until the federal government changes its policy,” said Sen. Bob Hertzberg, a Van Nuys Democrat and the author of the bill that now goes to the Assembly.

Per the Marijuana Law Reporter, Marijuana has been legal in California since January 2018, but it’s still illegal under federal law under the Controlled Substances Act.

-Brad A. Molotsky, Esquire

Cannabis Banking – Can Do in West Virginia – Brad A. Molotsky, Esq.

Gov. Jim Justice of West Virginia signed into law, HB 2358, a medical cannabis banking bill, allowing bidding for financial institutions to provide banking services related to the state’s medical marijuana program.

Per reporting from MJ Biz, House Bill 2538 also establishes the Medical Cannabis Program Fund for collecting fees related to the program and the Treasurer’s Medical Cannabis Fund allowing the state treasurer to collect $ for banking services.

Justice said Tuesday he fully supports opening access to medical marijuana. Delegate Mike Pushkin, D-Kanawha, who co-sponsored the bill, said he was happy to see Justice sign the bill.

“I think that if we allow different types of entities to act as a depository, then we are more likely to find somebody to step up and do that business,” he said.

Justice has yet to act on a separate bill, House Bill 2079, which addresses issues with the original medical marijuana bill, including the permitting process and regional distribution requirements.

Justice has until midnight Wednesday to act on bills from this year’s 60-day legislative session. -Brad A. Molotsky