Paul Josephson – Cannabis Industry

April 20, 2023 by Duane Morris

Employee Numbers up at Some Cannabis Msos Despite Challenging Conditions

News of widespread layoffs at cannabis companies across the United States has dominated headlines, but an analysis of employee counts at America’s largest multistate operators shows several actually grew their payrolls last year.

The fact that employee payrolls were up for some marijuana MSOs at the end of 2022 but down for others underscores how several factors can play a role in determining a company’s health.

Those factors include geographic footprint, taxes, operating costs and capital availability, experts said.

“The present moment is the Great Rationalization for the industry,” Paul Josephson, a New Jersey-based partner and leader of the cannabis industry group at the Duane Morris law firm, told MJBizDaily via email.

“Price compression and profitability varies tremendously by state and even within a state. So smart operators are taking a hard look at where they are investing their human capital.”

That means winding down operations in some areas and investing in others with more opportunity for revenue growth.

To read the full text of this article, please visit the MJBizDaily website.

February 9, 2023February 9, 2023 by Duane Morris

Paul Josephson Named to New Jersey ROI Influencers: Power List 2023

Duane Morris partner Paul Josephson was named to the New Jersey ROI Influencers: Power List for Government Affairs and Cannabis for 2023.

January 16, 2023January 16, 2023 by Brad A. Molotsky

Adult Use Cannabis – the United States Virgin Islands passes adult use cannabis legislation!

In case you might have missed it with your year end festivities, the U.S. Virgin Islands became the latest U.S. region to legalize adult-use cannabis. Once regulations are finalized, the rules will allow residents and visitors to purchase medical and/or recreational cannabis products from licensed dispensaries. The bill was signed by Governor Bryant and is now effective.

The legislation also includes provisions proposed by Senators Sarauw and Bolques and automatically expunges cannabis possession charges in the territory.

Medical cannabis was previously approved in 2019 but the legislature continues to work on the applicable rules and regulations for the program.

It is estimated by Commissioner Richard Evangelista that it will likely be another 18-24 months before the government can finalize the applicable regulations for medical and adult use.

Sarauw said that even now, with adult-use reforms now heading to the governor’s desk, “we have done absolutely nothing to move cannabis forward.”

At the moment, current rules decriminalize the possession of up to an ounce of cannabis in the U.S. Virgin Islands.

Key Take Away – the USVI has now officially approved adult use cannabis which will likely spark (sorry, could not resist) multiple businesses and business lines to look to establish operations in the Territory. Grow, manufacture, dispensing and businesses supporting these operations are sure to continue their thought processes as to how to engage and become licensed pending final rules to be issued by the Department of Licenses and Consumer Affairs.

Duane Morris has an active Cannabis Team to help organizations and individuals plan, respond to, and execute on your cannabis and hemp initiatives. We would be happy to discuss your proposed project and how these new rules might apply to you. For more information or if you have any questions about this post, please contact Brad A. Molotsky, or Tracy Gallegos, Seth Goldberg, or Paul Josephson who co-head the Cannabis Group or the attorney in the firm with whom you in regular contact .

December 19, 2022December 20, 2022 by Brad A. Molotsky

NJ Cannabis – 3Q 2022 Adult Use Sales Numbers Continue to Blaze

According to recent reporting from the NJ Cannabis Regulatory Commission (“NJCRC”), sales of legalized, recreational adult use cannabis in NJ exceeded $116.5 Million from July to September of 2022. This Q3 revenue figure represents a 46% increase from sales receipts in Q2 of 2022 of $80 Million generated from April to June 2022, when 13 state dispensaries expanded to adult cannabis sales for the first time.

By way of background, New Jersey legalized the sale of recreational marijuana for those 21 and over in April 2021. Sales were initially confined to 12 licensed dispensaries, which had approximately $24 Million in sales through May 2021, or an average of $5 Million per week in a state with 9.3 Million residents. By comparison, adult recreational cannabis generated approximately $80 Million in total sales between April and June 30 per the Cannabis Authority or $6.7M per week. Continue reading “NJ Cannabis – 3Q 2022 Adult Use Sales Numbers Continue to Blaze”

May 16, 2022 by Brad A. Molotsky

Cannabis: NJ Assembly Passes Decriminalization Bills for Possession of Certain Amounts of Cannabis

The NJ Assembly passed two bills, 1897 and 4269 that would decriminalize possession of certain amounts of cannabis, while reducing penalties for what would still be deemed to be an arrestable/convictable offense.

The measures, which were introduced at the Assembly Community Development and Affairs Committee on Monday, passed by a 63-10 vote.

Per NJBIZ, a Senate version (Senate Bill 2535) was introduced on March 16 to the Senate Judiciary Committee, but has not moved since introduction.

There will still be work to do to reconcile the Assembly bills with Senate Bill 2535 which was introduced on June 4th and referred to the Senate Judiciary Committee but much of the same language was used in both the Assembly and Senate versions.

One the key difference between the Senate and Assemble versions is the treatment regarding possession of up to a pound of marijuana. Yes, you read that right – a POUND.

Under the Senate bill, possession of up to a pound of cannabis will no longer be an arrestable offense, replacing it with a written warning for first offenses and a $25 civil penalty or community service for any afterward.

The Assembly bills instead call for a reduced penalty for possession of up to a pound and thereby lowers a first-time offense from 18 months to 6 months of imprisonment, and fines from $10,000 to $1,000. Any subsequent offenses would be met with the current level of punishment.

Possession of up to 2 oz. of cannabis, under current state law, has sentencing guidelines for up to 18 months in jail and fines of up to $10,000.

Under current law, possession of between 1 pound and 5 pounds is punishable with imprisonment between 3-5 years or fines up to $25,000, or both.

These bills come a few months before the upcoming 2020 presidential election, where voters will decide whether recreational marijuana should be legalized for adult-use. Currently, polling has support for legalization at 67% among NJ residents.

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!

April 21, 2022 by Duane Morris

Paul Josephson Takes Part in The Future of Cannabis Panel at the Benzinga Cannabis Capital Conference

Duane Morris partner Paul Josephson participated in the panel discussion “The Future of Cannabis” at the Benzinga Cannabis Capital Conference on April 20, 2022. Watch the panel below.

March 15, 2022 by Duane Morris

Tunnel Vision: How Cannabis Lawyer Paul Josephson Scored a Front-row Seat to a $13B Piece of Infrastructure

Duane Morris partner Paul Josephson was featured in this article published in New Jersey Super Lawyers magazine.

Josephson came to cannabis law after learning state contracts and licensing skills from mentor Clive Cummis, who died in 2010.

Thanks to Cummis’ deep infrastructure work, Josephson spent the ’90s as outside counsel for the New Jersey Turnpike. Then like Cummis, Josephson got into political law, and has spent the last two decades representing gubernatorial campaigns. And when Gov. Phil Murphy pushed legalizing weed, Josephson says he was already in the right place at the right time.

To read the full text of this article, please visit the New Jersey Super Lawyers website.

March 19, 2021 by Brad A. Molotsky

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.

February 22, 2021 by Brad A. Molotsky

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.

December 17, 2020 by Brad A. Molotsky

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.