MDAdvisor Spring 2021

New Jersey

More than three years after Governor Phil Murphy took office with hopes of legalizing marijuana during his first 100 days in office,1 on February 22, 2021, the Governor signed three bills that launched the recreational marijuana industry in New Jersey and put an end to thousands of arrests for individuals carrying small amounts of cannabis.2

Assembly Bill 213 (sponsored by Assemblywoman Quijano and Senator Scutari), known as the “New Jersey Cannabis Regulatory, Enforcement Assistance, and Marketplace Modernization Act,” legalizes and regulates cannabis use and possession for adults 21 years and older, as follows:

• Permits adults 21 and older to possess up to six ounces.
• Establishes the Cannabis Regulatory Commission to regulate a new, legal industry, and issue six types of licenses: cultivation, processing, wholesale, distribution, retail and delivery.
• Directs (but does not guarantee) that 70 percent of the state sales tax revenue from purchases and all of an excise fee on growers go to certain minority communities disproportionately impacted by the drug war.
• Limits the number of growers to 37 for the first two years, but does not limit retail outlets.
• Prohibits all home growing.
• Establishes a 7 percent sales tax and a municipal tax of up to 2 percent when sales begin. Includes a sliding tax for growers—from $10 an ounce up to $60 an ounce as the price of marijuana falls over time.
• Permits the sale of certain edible products, which cannot be mistaken by children as candy.

Assembly Bill 18974 (sponsored by Assemblyman Wimberly and Senator Ruiz) reforms criminal and civil penalties for marijuana and hashish offenses, as well as provides remedies for individuals currently facing certain marijuana charges. The bill prevents unlawful low-level distribution and possession offenses from being used in pretrial release, probation and parole decisions and provides certain protections against discrimination in employment, housing and places of public accommodation. The bill also creates a pathway to vacate active sentences for certain offenses committed before enactment of the enabling legislation. The bill provides for the following:

• Criminal and civil penalties for possession of up to six ounces for adults 21 and older would be removed.
• Distribution of one ounce or less would result in a written warning for a first offense.
• Subsequent incidents would be fourth-degree offenses.

Assembly Bill 53425 (sponsored by Assemblyman Wimberly and Senators Scutari and Cruz-Perez) clarifies penalties for marijuana and cannabis possession and consumption for individuals younger than 21 years. The legislation corrects inconsistencies in A21 and A1897 concerning marijuana and cannabis penalties for those underage as follows:

• Removes criminal penalties for marijuana and alcohol possession for anyone younger than 21 years.
• Mandates a three-tier warning system for alcohol or marijuana use and possession by individuals younger than 21 years:
  • For the first offense, the person would be issued a written warning.
  • For the second offense, the person’s parents or guardians would be notified and provided information about community services or groups offering education on substance use.
  • For the third and subsequent offenses, the person would be referred to those community services or groups.
• Requires police have their body cameras enabled during interactions, which must be reviewed by the State Attorney General.
• Reduces the criminal liability criteria for police officers who conduct illegal marijuana searches and bars the odor of marijuana as cause for a search.

“This will usher in a new era of social justice by doing away with the failed policy that criminalized the use of marijuana.”

Senator Nick Scutari, lead advocate for the legalization of adult-use marijuana, said, “This will usher in a new era of social justice by doing away with the failed policy that criminalized the use of marijuana. Too many people have been arrested, incarcerated and left with criminal records that disrupt and even destroy their lives. We don’t want the criminal justice system to be an unfair barrier to success. By implementing a regulated system that allows people age 21 and over to purchase limited amounts of marijuana for personal use we will bring marijuana out of the underground market where it can be controlled, regulated and taxed, just as alcohol has been for decades.”6

The Cannabis Regulatory Commission, which regulates the legal marijuana industry in New Jersey, has 180 days from the date of the Commission’s first meeting, April 12, 2021, to decide when legal weed sales will begin for those 21 years and older.3 During that period, the Commission will adopt and promulgate rules and regulations for adult use in New Jersey.

Currently, 15 medical marijuana dispensaries are open in the state, but the Commission is expected to grow the industry considerably and has the authority to grant or limit the number of licenses for growing, producing, selling, delivering or testing cannabis items. The law allows for 37 new cultivation licenses in the first two years of legalization (not including microbusinesses, which operate with 10 or fewer employees).

To determine the number of necessary licenses, the Commission must evaluate the number of growers, manufacturers and dispensaries and the number of patients every two years. The Commission also serves as a watchdog and must determine whether medical marijuana operators have charged excessive prices.

Upon signing the bill, Governor Murphy stated, “This legislation will establish an industry that brings equity and economic opportunity to our communities, while establishing minimum standards for safe products and allowing law enforcement to focus their resources on real public safety matters. Today, we’re taking a monumental step forward to reduce racial disparities in our criminal justice system, while building a promising new industry and standing on the right side of history. I’d like to thank the Legislature, advocates, faith leaders, and community leaders for their dedicated work and partnership on this critical issue.”2