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.
“Credit unions may provide the customary range of financial services for business accounts, including loans, to lawfully operating hemp related businesses within their fields of membership,” says the National Credit Union Administration (NCRU) in its recently released guidance 19-RA-02.
While this is a significant step for hemp businesses seeking banking outlets, it is far from the relief proposed by Secure and Fair Enforcement Act (“SAFE Banking Act”) and does not represent a blanket permission. Still, the NCRU Guidance signals a recognition of the growing Cannabis industry and the practical need to provide financial services to businesses in the industry. Here are some key takeaways.
First, the guidance only applies to Federally Insured Credit Unions, not national banks.
Second, the guidance explicitly relates to credit unions serving “hemp” businesses as defined in the Agricultural Improvement Act of 2018 (2018 Farm Bill), which removed hemp from Schedule I of the Controlled Substances Act. Marijuana remains a Schedule I drug, which restricts banking access of marijuana businesses.
Third, because the USDA has yet to promulgate regulations and guidelines to implement the hemp production provisions of the 2018 Farm Bill, credit unions must ensure members in hemp-related business are operating under the industrial hemp pilot provisions of the Agricultural Act of 2014 (2014 Farm Bill).
Fourth, credit unions that elect to bank hemp-related businesses must maintain robust Bank Secrecy Act (BSA) and Anti-Money Laundering (AML) compliance programs. This includes:
Maintaining appropriate due diligence procedures for hemp-related accounts and complying with BSA and AML requirements to file Suspicious Activity Reports (SARs) for any activity that appears to involve potential money laundering or illegal or suspicious activity.
Remaining alert to any indication an account owner is involved in illicit activity or engaging in activity that is unusual for the business.
Staying on top of state and tribal laws, regulations, and agreements under which each member that is a hemp-related business operates.
Verifying that the member is part of the pilot program created in the 2014 Farm Bill.
Adapting ongoing due diligence and reporting approaches to any risks specific to participants in the pilot program.
Being familiar with any other federal and state laws and regulations that prohibit, restrict, or otherwise govern these businesses and their activity.
In sum, banking hemp-related businesses is permissible for credit unions. But they must be diligent in crafting BSA/AML policies. This is not a complete solution to the existing banking problems facing the Cannabis industry, but it does evidence a growing regulatory desire to provide access for the industry, which could sway policy makers down the road.
 The 2018 Farm Bill defines “hemp” as: “the plant Cannabis sativa L. and any part of that plant, including the seeds thereof and all derivatives, extracts, cannabinoids, isomers, acids, salts, and salts of isomers, whether growing or not, with a delta-9 tetrahydrocannabinol concentration of not more than 0.3 percent on a dry weight basis.”
At the end of last month, on July 23, 2019, the New York City Council passed two cannabis reform resolutions focused on issues facing parents. These were two resolutions out of ten that were first introduced on February 13, 2019.
The first resolution (Res. No. 740) calls on the New York City Administration for Children’s Services to implement a policy that states that a parent’s mere possession or use of marijuana does not itself create an imminent risk of harm to a child that would serve as the basis for a child’s removal from the parent’s custody.
The resolution cites reports of racial inequity in the enforcement of marijuana laws and identifies NYPD guidance from 2011 that recommends an individual in possession of small amounts of marijuana be issued a court summons instead of being arrested. The Council acknowledged that New York State has legalized medical marijuana and decriminalized the possession of small amounts of marijuana. Given the trend to accept cannabis usage in New York and beyond, the Council passed this resolution, in part, to ensure that the child welfare system is consistent with this emerging acceptance.
The second resolution (Res. No. 746) calls on the New York State Legislature to pass, and the Governor to sign, a law requiring the New York State Department of Health to create clear and fair regulations for hospitals on drug testing pregnant or birthing parents. The resolution states that these regulations should include the requirement for hospitals to inform patients of their rights before discussing drug use or testing with the patient.
The Council stated that the current policy for hospitals allows them to drug test patients who are giving birth and report positive tests to the Statewide Central Register of Child Abuse and Maltreatment (“SCR”), such report would be required if the patient tested positive for marijuana alone. This mandated report triggers a child welfare investigation by the NYC Administration for Children’s Services. Currently, the hospital has discretion over the individuals it chooses to test and it is unclear whether the hospitals are notifying patients that there are potential child welfare ramifications for drug tests and the disclosure of drug history to their health care provider. Similar to the first resolution, the Council is calling on the State to ensure a fair policy for drug testing patients that aligns with the legalization and decriminalization of cannabis.
The cannabis industry is the next frontier, growing rapidly and becoming one of the highest grossing industries in the country. The problem is, through no fault of its own, it is also the “wild west” of industries in many ways operating without guidance or regulation from the federal agencies that have jurisdiction of its products.
On May 31, 2019, the U.S. Food and Drug Administration (FDA) held a public hearing to allow stakeholders to share their experiences and challenges with cannabis or products containing cannabis-derived compounds. For this hearing, FDA requested information, scientific data, and stakeholders’ views on the safety of CBD-containing and cannabis-derived products. FDA hoped to obtain input on possible strategies that will allow for lawful marketing of CBD-containing and cannabis-derived products in a predictable and efficient manner, while still providing incentives for drug development with CBD and cannabis-derived compounds. Over 100 academic, industry, medical, and consumer stakeholders spoke or gave presentations at the hearing to a packed audience of about 500 attendees. In addition, over 1300 written comments have been posted to the FDA’s public docket FDA-2019-N-1482 for this hearing.
The hearing opened with remarks from Acting Commissioner Dr. Norman Sharpless. As expected, he made no new announcements about FDA’s current thinking about regulating products containing cannabis or cannabis-derived compounds. He did restate the FDA’s current position that CBD and THC cannot lawfully be added to a food or dietary supplement and that FDA does not have a policy of enforcement discretion with respect to these products.
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.
Just days after the NJ Senate and Assembly close in on expansion of medical use Cannabis, the New Jersey Department of Health (“Department”) published notice of a Request of Applications (“RFA”) for an additional 108 alternative treatment center (“ATC”) permits which authorize holders to cultivate, manufacture, and/or dispense medicinal marijuana. The Public Notice is available here, while the RFA is summarized below and available in full here.
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
Getting a patent for a cannabis product is no more difficult than getting a patent for any other kind of product. However, with a high number of cannabis patent applications being approved, it is likely that many will be challenged for invalidation in the coming years.
Already one of these patents has gone to court in the U.S. District Court for the District of Colorado. In United Cannabis v. Pure Hemp Collective, United Cannabis Corp. claims that Pure Hemp Collective Inc. used a cannabis extract that United Cannabis had a patent on. Pure Hemp filed a motion for partial summary judgment, arguing United Cannabis should not have had a patent on the extract because it was something that occurred naturally. In April, U.S. District Judge William Martinez found the strain was altered and would not have occurred naturally and denied the motion for partial summary judgment. The case is still pending..
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.
On May 2, 2019, the United States Patent and Trademark Office (USPTO) made available a new examination guide aimed at clarifying the examination procedure for trademarks used in connection with cannabis and cannabis-derived goods and services.
These guidelines are a direct response to the signing of the Agricultural Improvement Act of 2018 (2018 Farm Bill) into law on December 20, 2018. The 2018 Farm Bill changes certain federal authorities relating to the production and marketing of “hemp,” defined as “the plant Cannabis sativa L. and any part of that plant, including the seeds thereof and all derivatives, extracts, cannabinoids, isomers, acids, salts, and salts of isomers, whether growing or not, with a delta-9 tetrahydrocannabinol [THC] concentration of not more than 0.3 percent on a dry weight basis.” These changes include removing hemp from the Controlled Substance Act’s (CSA) definition of marijuana, which means that cannabis plants and derivatives such as cannabidiol (CBD) that contain no more than 0.3 percent THC are no longer controlled substances under the CSA.