Tag: cannabis

Posted on by Kayla Handt

Municipalities Can’t Just Say “No”: What Higher Breed Means for Cannabis Licensing

Can a city council deny a cannabis retailer application for a resolution of local support (“ROS”) without providing any explanation? According to the New Jersey Appellate Division, the answer is no.

On March 3, 2026, in Higher Breed NJ LLC v. City of Burlington Common Council, the New Jersey Appellate Division held that municipal governing bodies must provide a discernible basis when denying an ROS—a prerequisite to obtaining a Class 5 Cannabis Retailer License from the Cannabis Regulatory Commission (“CRC”).1

Higher Breed, a cannabis business, applied for an ROS to operate a Class 5 cannabis retail dispensary in Burlington. The City Council ultimately denied the ROS without offering any reasons for the decision.

The Appellate Division recognized that municipal councils possess broad discretionary authority when evaluating ROS applications and are permitted to take into account all relevant evidence. Nevertheless, the court emphasized that such discretion does not permit a council to deny an application without providing an explanation. In order for the City Council’s resolution to receive deference, there must be a clearly discernible basis supporting the decision reached.

The court found this requirement consistent with CREAMMA (the Cannabis Regulatory, Enforcement Assistance, and Marketplace Modernization Act), which requires the CRC to provide specific reasons when denying a license. Burlington’s own municipal code reinforced the point: it defines a resolution as a written description of “the sense or will” of the City Council—language that inherently calls for some articulation of reasoning.

The court identified two primary reasons this requirement matters.

First, transparency. Without an explanation, applicants are left to speculate about what went wrong and whether it can be remedied. The public likewise deserves to understand the basis for City Council’s decisions.

Second, meaningful appellate review. Courts cannot evaluate whether a denial was arbitrary or unreasonable absent a stated rationale. As the court observed, deference to a governing body’s decision requires “confidence that there . . . [are] appropriate findings addressing the critical issues in dispute.”

The court noted that a decision on the issuance of an ROS will not typically demand the same level of detail as a land use board’s decision, but it must contain enough to make the council’s reasoning discernible.

This decision meaningfully shifts the balance of power in the ROS process. Municipalities can no longer simply vote “no” and move on—they must provide a written basis for any denial. That requirement makes it possible to challenge denials driven by irrelevant considerations or personal grievances rather than legitimate regulatory concerns.

For cannabis operators, Higher Breed establishes a critical safeguard: applicants are now entitled to clear reasons for an ROS denial, enabling them to address any deficiencies in future applications and to challenge decisions grounded in illegitimate reasoning.

  1. https://www.njcourts.gov/system/files/court-opinions/2026/a3414-24.pdf ↩︎
Posted on by Michael D. Schwamm

NY Bill Would Allow Low-THC Drinks in Liquor Stores

New York State Senate Bill S9220 (2025-2026), introduced February 17, 2026, by Sen. Jeremy Cooney (D-Rochester), chair of the Senate Subcommittee on Cannabis, would allow liquor and wine stores to sell low-potency cannabis beverages.

Regulatory Framework

The bill vests joint authority in the State Liquor Authority and Office of Cannabis Management over this novel class of intoxicating beverages limited to 5 milligrams of delta-9 THC per serving. Products must be maintained in a separate, distinctly marked area from alcoholic beverages, with sales confined to persons 21 years or older.

Taxation Provisions

An excise tax of 9% applies to retailers’ purchases from distributors; a 13% retail tax burdens end purchasers. Revenues from the latter are apportioned primarily to the state Cannabis Revenue Fund, approximately one-third to the locality of sale, and one-thirteenth to the liquor authority.

Legislative Precedent

This measure succeeds S8575 (the “Hemp Beverage and Taxation Act”), also sponsored by Cooney and pending in committee since November 2025, which proposes Cannabis Control Board oversight of hemp-derived cannabinoid beverages (≤5mg THC/container) with a uniform 10% tax and parallel age/labeling restrictions. As of February 19, 2026, S9220 remains referred to the Senate Investigations and Government Operations Committee.

Posted on by Duane Morris

Ohio Attorney General Files First-of-Their-Kind Antitrust Claims Against Major Multistate Cannabis Operators

By Sean P. McConnell, Wayne A. Mack, Christopher H. Casey, Paul P. Josephson, Tracy Gallegos, Michael D. Schwamm, and James Hearon

The Ohio attorney general recently filed an unprecedented state antitrust enforcement action against nine of the nation’s largest multistate cannabis operators. The complaint alleges these defendants formed illegal cartels through reciprocal supply agreements, competitively sensitive information exchanges and discriminatory distribution practices designed to exclude independent Ohio cannabis operators from the market and artificially inflate consumer prices. The complaint seeks injunctive relief, civil forfeitures of $500 per day per defendant for each day the alleged combinations were in effect, and attorneys’ fees.

Read the full Alert on the Duane Morris LLP website.

Posted on by Jim Hearon

New Jersey Joins in Closing Hemp Loophole –New Legislation Regulates Hemp-Derived Products

On January 12, 2026, Governor Phil Murphy signed Senate Bill 4509 into law, ushering in a sweeping reform of New Jersey’s hemp laws and establishing a regulatory framework for intoxicating hemp products (“IHPS”) that have proliferated across the Garden State. The bill’s sponsors aimed to close a long-standing loophole created by the 2018 federal Farm Bill, which permitted IHPs to be sold widely with no oversight. The enactment of SB 4509 represents the latest and most consequential chapter in New Jersey’s multi-year effort to regulate these products.

Two years ago, New Jersey attempted to regulate IHPs but its efforts were unsuccessful. In September 2024, New Jersey enacted legislation prohibiting the sale of IHPs to minors and imposing new restrictions on their distribution. Just days before the law was scheduled to take effect, a federal judge issued a permanent injunction blocking most of its substantive provisions.  In Loki Brands LLC v. Platkin, the District Court of New Jersey held that the law’s definition of “intoxicating hemp products” expressly discriminated against out-of-state hemp by prohibiting its sale in New Jersey. The court concluded that the law violated the Dormant Commerce Clause by penalizing out-of-state producers and manufacturers. It further held that the statute conflicted with—and was, therefore, preempted by—the 2018 Farm Bill because it effectively transformed federally legal hemp into a controlled substance simply by virtue of being shipped through New Jersey.

The federal landscape concerning hemp has dramatically shifted since Loki was decided.  As part of the 2025 federal spending bill, Congress overhauled federal hemp standards by including a provision banning the sale of any hemp-derived THC product containing more than 0.3% total THC—not just delta-9 THC as permitted under the 2018 Farm Bill—on a dry weight basis.  Congress also narrowed the definition of legal hemp to exclude products containing cannabinoids that “were synthesized or manufactured outside the plant” and prohibited consumer products containing more than 0.4 milligrams of total THC per container.  Taken together, these changes render virtually all existing IHPs unlawful under federal law.  The new federal prohibition is set to go into effect on November 13, 2026. 

New Jersey’s newly enacted law is calibrated to align with these updated federal standards.  Under SB 4509,  hemp may not contain more than 0.3% total THC, including delta-8, delta-10, THCA, and similar cannabinoids, and IHPs may not contain more than 0.4 milligrams of THC per container. Products that exceed these thresholds are deemed cannabis and fall under the jurisdiction of the New Jersey Cannabis Regulatory Commission (“CRC”). As a result, the sale of such products will require a state-issued cannabis license and compliance with the same regulatory requirements imposed on licensed cannabis businesses operating in New Jersey. 

While the law took effect on January 13, 2026, its implementation will be a phased approach.  To allow the CRC time to develop its regulatory scheme, and to mitigate the economic impact on existing IHP retailers, the statute provides a grace period through April 13, 2026, during which time current sellers must liquidate their inventory.  The law does, however, carve out a narrow exception for intoxicating hemp beverages, which may continue to be sold at licensed liquor stores until November 13, 2026  when the federal prohibition goes into effect.  At that point, any beverage exceeding the new THC limits will be regulated as cannabis. 

With the passage of SB 4509, New Jersey has signaled an end to the sale of unregulated IHPs.  By harmonizing New Jersey law with federal hemp rules and addressing the constitutional defects identified in Loki, the Legislature has likely crafted a framework designed to withstand legal scrutiny while prioritizing consumer safety and regulatory clarity.

Posted on by Duane Morris

Network with Duane Morris At MJBIZ Con 2025

Meet Duane Morris Partner Michael Schwamm for a networking event on Wednesday, December 3, during the MJBIZ Conference 2025. Michael will be joined by Greg Hill of BrandBirth and Rachel Wright of VERDANT Strategies for an open discussion on the current state of the industry and to share insights with cannabis professionals.

The networking event will take place from 1 p.m. to 4 p.m. at the VICE VERSA Patio Bar at the Vdara Hotel.


Posted on by Michael D. Schwamm

NY OCM Issues Key Correction on 500 Foot Distance School Zone Requirement


The New York Office of Cannabis Management (OCM) has issued a significant correction to its previous guidance on how to measure the required 500-foot distance between retail cannabis dispensaries and schools. This change has immediate and potentially wide-ranging implications for both pending applicants and currently licensed dispensaries across New York State.

Prior Guidance
OCM had long advised applicants that the 500-foot proximity restriction should be measured in a straight line from the center of the nearest school entrance to the center of the dispensary’s main entrance—only considering entrances regularly used by patrons. In addition, this rule applied only when the dispensary and school were located on the same street or road.

Updated Measurement Standard
OCM recently stated that this method was incorrect and inconsistent with Cannabis Law § 72(6) which states that “No cannabis retail licensee shall locate a storefront within five hundred feet of a school grounds as such term is defined in the New York Education Law or within two hundred feet of a house of worship.” Section § 409(2) of the Education Law defines “school grounds” as “any building, structure and surrounding outdoor grounds, including entrances or exits contained within a public or private pre-school, nursery school, elementary or secondary school’s legally defined property boundaries as registered in a county clerk’s office.”

Reading the two sections together, OCM has adopted a revised standard that requires the licensee to measure a straight line from the dispensary entrance to the nearest point on the school property line —regardless of whether they are on the same road. This new and broader interpretation significantly expands the areas considered off-limits.

Current Impact
According to the OCM, the revised guidance will affect the following applicants/licensees (subject to change upon further analysis) :
• 44 pending applicants whose proposed locations may now be noncompliant.
• 108 licensed dispensaries.

Over 80% of the affected parties are in New York City, while the remainder are spread across the rest of the State.

OCM Support for Applicants and Licensees

The applicants that don’t comply with the distance requirements must find new, compliant locations to proceed with their applicants.

To assist affected applicants, OCM and Empire State Development have created a $15 million Applicant Relief Program to help cover:

  • Costs of finding a new location.
  • Capital improvements made to the original (now non-compliant) location

Applicants may receive provisional licenses while they secure new locations.

Support for Licensees

For those affected licensed dispensaries, many of which already operating, the Governor’s Office and OCM are pursuing legislation to allow these businesses to remain at their current locations.

However, as there is the risk this legislation may not pass and OCM cannot renew licenses at locations that do not comply with the new interpretation of Cannabis Law § 72 (6), licensees will need a new compliant location before the Cannabis Control Board can finalize license renewal.


Posted on by Tim Stafford

SB 3 Rolls into the Texas House of Representatives

After an hour and a half of debate on the Senate floor, Senate Bill (SB) 3 is engrossed. The bill received 24 ayes and 7 nos.

Senators who support the bill told stories of children and young adults losing all function after ingesting products containing intoxicating hemp. They emphasized how important it is for law enforcement officers to be able to immediately tell whether a product is illegal during a traffic stop, rather than make an assumption.

Opponents of the bill requested regulation instead of a total ban and raised the issue of veterans and other individuals who rely on these products rather than relying on alcohol and opioids for relief. Senator Charles Perry assured them that physician-prescribed hemp products will be more accessible under the Texas Compassionate-Use Program after a corresponding bill—SB 1505—is introduced and passes this Legislative Session.

Continue reading “SB 3 Rolls into the Texas House of Representatives”
Posted on by Haley Ferise

Pennsylvania Legislature Weighs Possibility of Adding Recreational Cannabis to the Purview of the Liquor Control Board

Pennsylvania state representatives Dan Frankel (D-Allegheny) and Rick Krajewski (D-Philadelphia) plan to propose a bill in the House of Representatives that would legalize recreational cannabis. Under their proposal, cannabis would be controlled by the state’s Liquor Control Board, the name of which would be changed to the Liquor and Cannabis Control Board. Cannabis would be sold at existing state liquor stores; meanwhile, private businesses would be permitted in the industry in cultivation and consumption sites, similar to bars.

However, there has been debate about the merits of this state-run system for liquor sales, and Republican members of the state legislature have made efforts to privatize liquor sales in the past.

Proponents of the state-run system argue that this system provides stable jobs, including consistent benefits and reliable pensions, for over 5,000 Pennsylvanians, while also returning millions of dollars in profits to the state. Furthermore, this system gives the state more control to prevent underage liquor sales.

Opponents of this system argue that Pennsylvanians should have more freedom over decisions regarding liquor sales. They also hypothesize that privatizing liquor sales would allow more stores to arise and more sales to occur, which would increase tax revenue for the state. For example, less than three years after Washington State privatized liquor sales, the number of liquor stores increased by approximately 327%, and the industry’s revenue collections increased by approximately 18%.

Despite this debate, Pennsylvania’s state-run system for liquor sales has remained in place. However, a state-run system for cannabis dispensaries may run into a separate issue: the potential conflict with federal law. Cannabis remains a controlled substance under Schedule I of the Controlled Substances Act, and Section 280E of the Internal Revenue Code disallows all tax deductions or credits for amounts paid or incurred in carrying on trade or business that consists of “illegally trafficking” a Schedule I controlled substance. As recently as June 2024, the IRS has issued reminders that this section applies to businesses selling marijuana, even if they operate in states which have legalized the sale of cannabis. It remains to be seen whether state-run dispensaries would be subject to this same provision.

Representatives Frankel and Krajewski’s bill would also provide for the possibility of expungement for people charged with cannabis-related crimes, invest revenue into communities impacted by prohibition policies, implement public health protections, and assist minority business owners in entering the industry.

The legislators have not officially proposed the bill but did release a memorandum to all House members seeking co-sponsors on December 2, 2024.

Posted on by Danielle M. Dwyer

Employers Must Engage in the Interactive Process with Medical Marijuana Users and Cannot Refuse to Hire a Job Applicant Based on Marijuana Use Alone.

By: Kathleen O’Malley and Danielle Dwyer

Recently, Attorney General Matthew J. Platkin announced a Finding of Probable Cause by the New Jersey Division on Civil Rights (DCR) against Prince Telecom LLC (Prince) for declining to hire a medical marijuana user as a cable installation technician.  The DCR found the job applicant was subject to disability discrimination in violation of the New Jersey Law Against Discrimination (LAD).  The basis for the DCR’s determination was Prince’s rescission of a job offer after the applicant, a medical marijuana user, tested positive for cannabis in connection with a pre-employment drug screen.

Prince, a company that constructs and maintains telecommunications and cable systems, offered a technician job to the applicant pending a drug test.  The applicant informed the company that he had a medical marijuana prescription and used marijuana to treat a disability.  When the applicant tested positive for cannabis, he provided his medical marijuana prescription card to the company, after which Prince rescinded the job offer.  Prince maintained that it could not provide the applicant with any accommodation given the safety-sensitive nature of the job duties of the position (such as, driving company vehicles, operating machinery, working with electrical wires, climbing ladders and lifting 50 pounds or more).  According the DCR, Prince assumed that hiring a medical marijuana user to perform such tasks would expose the company to “enormous” liability.

The DCR issued a Finding of Probable Cause because Prince did not ask the applicant for additional information about the nature of his disability; how often and what time of day the applicant used marijuana; and what effect, if any, his medical marijuana use might have on him during work hours.  By failing to initiate discussions of that nature with the applicant, the DCR concluded that Prince did not meet its obligation to engage in the interactive process.  Under the LAD, employers have an affirmative duty to consider reasonable accommodations for applicants and employees.  Broadly speaking, this means an employer should have a dialogue with a disabled applicant or employee and should ask questions to determine whether the individual can perform the essential functions of the job with or without a reasonable accommodation.  Once the employer has sufficient information from the individual and/or the individual’s healthcare provider about the disability and any proposed accommodations, the employer can evaluate whether it is able to offer a reasonable accommodation without posing an undue burden on the company.  Employers who fail to engage in this interactive process violate the LAD—which is exactly what the DCR has accused Prince of doing.

While the LAD protects individuals with disabilities, it is also worth noting that both medical and adult marijuana use are legal in New Jersey and the state has enacted protections for the use of marijuana.  The Jake Honig Compassionate Use Medical Cannabis Act (CUMCA) prohibits an employer from taking an adverse employment action against an employee or applicant (e.g., terminating or refusing to hire) based on the fact that the employee is registered as a medical marijuana user.  The Cannabis Regulatory, Enforcement Assistance, and Marketplace Modernization Act (CREAMMA) protects adult use of marijuana and prohibits employers from taking adverse employment actions due solely to a positive drug test for cannabis.  CREAMMA also has specific and stringent protocols with respect to drug testing in the workplace.  Because CREAMMA went into law after Prince rescinded the applicant’s job offer, the DCR did not review Prince’s conduct to determine whether it violated that statute as well.

Notably, the DCR did not find that Prince had to accommodate the applicant’s use of marijuana in workplace or that it had an obligation to hire him.  The agency found that Prince had an obligation to engage in the interactive process—to gather information sufficient to consider whether it could have reasonably accommodated the applicant’s disability.  If Prince had learned the applicant used medical marijuana after work hours and would not be impaired or under the influence when reporting for duty, Prince may have been able to reasonably accommodate the applicant’s disability.  The laws in New Jersey are clear that employers have a right to maintain a drug-free workplace and do not have to accommodate use of medical marijuana in the workplace or during work hours.  Based on the DCR’s finding, Prince’s error was that it made too hasty a decision and did not gather any information from the applicant to determine whether it could have accommodated his disability.

Of note, a Finding of Probable Cause is not a final determination on the merits.  It means the DCR determined that there is sufficient evidence to warrant further proceedings against Prince.  The parties will now have the opportunity to resolve the case voluntarily through conciliation.  If the parties cannot resolve the matter, the case will move to the Office of Administrative Law or the Superior Court for further adjudication.

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The opinions expressed on this blog are those of the author and are not to be construed as legal advice.

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