Governor Murphy Signs off on New Jersey Cannabis Legalization Bills

It is official, Governor Murphy signed three bills that together legalize cannabis for adults 21 years of age and older, making New Jersey the 13th state to legalize cannabis. On Monday, February 22, 2021, Governor Murphy signed the bills in to law, after both the Senate and Assembly held voting to pass a third bill establishing civil penalties for those under 21 caught with cannabis.

Here are New Jersey’s new cannabis laws, effective immediately:

  1. New Jersey adults 21 years of age and older may legally purchase and possess up to one ounce of cannabis, although cannabis consumers will not have legal means to purchase it yet. Under A21/S21 a New Jersey Cannabis Regulatory Commission will be established to develop regulations to govern the medical and adult-use industries and oversee the applications for licensing of cannabis businesses. The bill directs the CRC to promote diversity and inclusion in business ownership and contains employment protections for people who engage in lawful behavior with respect to cannabis. The Cannabis Regulatory Commission still must be fully seated to oversee the cannabis industry, which has six months to set up its rules and regulations before it seeks new licensees for businesses. The bill provides for the Legislature to reinvest cannabis revenues in designated “impact zones” and all retail sales will be subject to state sales tax and seventy percent of that revenue will be given to these “impact zones.”
  2. The second law signed by Governor Murphy, A1897 reduces criminal and civil penalties for those found with larger quantities of cannabis in their possession (distribution of more than one ounce but less than five pounds), as well as provides remedies for people currently fighting certain cannabis charges, including a pathway to vacate active sentences for particular offenses committed before enactment of the enabling legislation. The bill prevents certain 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.
  3. A third law signed by Governor Murphy, A5342/S3454 also refines penalties for cannabis possession and consumption for those under 21 years of age. This bill requires a series of written warnings, rather than criminal penalties or fines, for those under 21 years of age found with cannabis. Third-time offenders can receive community service. The law also restricts police from conducting searches of those under 21 years of age based solely on the odor of cannabis.

Adult Use Cannabis to be Legal on January 1, 2021. What Happens Now?

On November 3, 2020, the voters of New Jersey approved a referendum legalizing adult/recreational cannabis on January 1st. The NJ Legislature passed S21/A21 yesterday which describes the initial regulatory structure for adult use cannabis licenses, state and municipal taxes on legal marijuana and employer and employee protections in maintaining a drug free work place, among others.  The bill is expected to be signed by Governor Murphy next week.

The bill does not include dates for license applications for adult use cannabis business but does explain how the licensing process will work and memorializes the commitment to preference in the award of applications to minority and women owned businesses.

The bill increases the number of cultivation licenses to 37 from 24 and establishes six classes of licensed cannabis businesses: cultivator, manufacturer, wholesaler, distributor, retailer and delivery.  This creates new opportunities for those who are interested in the cannabis business but do not wish to open a dispensary or cultivation facility.

Some of the key takeaways from the bill are attached.

Capehart and Scatchard’s Cannabis Department is available to assist those who wish to apply for a license or have interest in other ways they can get involved in this new area of business in New Jersey.

Please contact Sheila M. Mints, Esq. at 856-840-4945.


Legislation to Require Workers’ Comp and PIP to Cover Costs of Medical Marijuana to Be Considered by the Assembly

Legislation requiring the employer, workers’ compensation and PIP insurers to cover the costs of medical marijuana was passed by the NJ Assembly Appropriations Committee on October 26, 2020 and will be considered by the entire Assembly.  Assembly Bill No. 1708, sponsored by Assemblyman John Burzichelli, Assemblyman Herb Conaway and Assemblywoman Joann Downey, requires that “an employer or workers’ compensation insurance carrier or private passenger automobile insurance carrier shall provide coverage for costs associated with the medical use of marijuana.”  If enacted, this legislation will not require that private insurers or governmental health programs like Medicare or Medicaid cover the costs of medical marijuana.

A first step in requiring workers’ comp coverage of the costs of medical marijuana came on January 13, 2020 when the Appellate Division decided the case of Hager v. M&K Construction, 462 N.J. Super. 146 (App. Div.), certif. granted, 241 N.J. 484 (2020). This case required reimbursement of the costs rather than coverage of the costs as set forth in the legislation.  The Hager case is currently on appeal to the New Jersey Supreme Court, which has agreed to hear the case.


Hemp in New Jersey – It’s Legal!

Now removed from the 2018 Farm Bill’s federal controlled substances list, beginning this year (2020) hemp can be treated like any other agricultural commodity in New Jersey. The Garden State is one of the first three states to have its hemp program approved by the United States Department of Agriculture (USDA).  Now the New Jersey Department of Agriculture (NJDA) can start accepting applications.

Here is what you need to know:

1) There are two types of licenses:

a) Grower (Producer) = a business or person who is authorized by the NJDA to cultivate hemp

b) Processor/Handler

i) Processor = Includes, but is not limited to, entities acquiring raw hemp materials and processing them into products.

ii) Handler = Those who possess or store a hemp plant on premises owned, operated, or controlled by a hemp producer for any period of time or in a vehicle for any period of time other than during the actual transport of the plant between premises owned, operated, or controlled by hemp producers or persons or entities authorized to produce hemp pursuant to any federal and state law or rule adopted pursuant thereto. Examples of “handlers” include, but are not limited to, seed cleaners, analytical labs, traders, harvesting entities, brokers, and other service providers.

2) Fees:

The Program establishes a schedule of fees to be paid based upon whether the hemp producer will be growing, processing, or handling hemp. Growers will pay an annual $300 plus $15 per acre fee, handlers will pay a $450 annual fee, and processors will pay an annual fee for each type of hemp component they process. For example, a hemp producer who processes grain ($450) and CBD extract ($1,000) will pay a $1,450 annual fee. Growers are permitted to process and handle their own hemp without paying additional fees. However, once a grower processes or handles hemp from at least one (1) separate hemp producer, the grower must pay applicable processor and handler fees.

3) The NJDA has the following restrictions

a) N.J.A.C. 2:25-2.2 – requires a site modification fee any time a growing site is altered or added to an existing license. This is necessary, so that the Department can submit accurate records to the USDA, which must be kept apprised of the status of all hemp producers and have accurate legal descriptions of all land being used to produce hemp.

b) N.J.A.C. 2:25-2.2 – prohibits public access to hemp, such as hemp mazes or any other recreational activity. The Department deems these measures necessary to prevent members of the public from having unauthorized access to plants and seeds that could be used to cultivate hemp in violation of this chapter.

c) N.J.A.C. 2:25-3.2 – allows the Department to prohibit any hemp, seeds, plantlets, or propagules for any reason. If the Department determines that any particular strain or source for hemp is unreliable, it may be prohibited in order to protect the integrity of the program. Hemp farmers will suffer financial losses for every non-compliant field they must destroy, so it is more efficient to prevent non-compliant hemp from being planted to begin with. If non-compliant hemp is processed into foodstuffs, it could result in State or nationwide recalls.

4) The application must provide the geographical land area on which hemp is going to be cultivated, processed, or handled. The application is tied to a particular building for processing and includes buildings used for processing.

5) Unlike cannabis licenses, at this time the NJDA has not limited the number of licenses they will issue. However, make sure your application is done right as incomplete answers will remove your application from consideration.

6) Upon request by law enforcement, any person transporting hemp or hemp materials shall maintain and prove authorization to engage in the commercial sale of hemp under the NJ hemp program, along with a travel manifest that lists the origin, destination, product description, and date of transport. Third-party carriers are not required to be authorized hemp producers in order to transport hemp.

7) Hemp products may be transported across state lines and exported to foreign countries in a manner that is consistent with federal law and the laws of respective foreign countries under the Agriculture Improvement Act of 2018.

8) Provided the distribution is carried out in accordance with federal and state law, distribution of CBD extract outside of New Jersey is not prohibited if it was grown/processed in New Jersey.

If you are interested in learning more about the hemp application process or submitting an application in New Jersey, please contact me at smints@capehart.com or 856.840.4945.


Applications for New Alternative Care Centers to be Issued on July 1, 2019

Ready, Set Go!

On June 3, 2019, Governor Murphy issued an executive order expanding the Medical Marijuana Program in New Jersey.  A total of 108 additional licenses will be issued.  The licenses will be divided among the northern, central and southern regions of New Jersey.

There will be separate licenses for each of cultivation, manufacturing endorsements and dispensaries.  Each region will be allocated 8 licenses for cultivation, 10 for manufacturing and 20 for dispensaries, for a total of 38 licenses per region.

Applications will be issued by the Department of Health on July 1, 2019 and must be submitted to the Department no later than
August 15, 2019.

If you have questions or would like assistance with an application for a license for medical marijuana, please contact Sheila M. Mints, Esq. directly at 856.840.4945 or via email at smints@capehart.com.  


Sheila M. Mints, Esq. specializes in healthcare transactional matters, including shareholder and employment agreements, purchases and sales of medical practices, including ACO and IPO transactions, and practice mergers. Ms. Mints acts as general counsel to many large practices and ambulatory care facilities, assisting with transactional, tax, human resources mattes and negotiation with payors and vendors. Ms. Mints also handles governmental and commercial payor investigations and audits into health care billing and coding practices. An experienced tax lawyer, Ms. Mints represents her clients before the Internal Revenue Service, the federal Tax Court and state taxation departments in a variety of tax matters.