Legislation has been proposed in New Jersey to legalize the possession and personal use of small amounts of cannabis for residents age 21 and over. CSATC wants to ensure its patients in light of any legislation change, our focus and efforts will still be to provide patients with the highest quality medicinal cannabis possible at affordable prices.
As a leader in the existing New Jersey cannabis industry, we have reviewed the legislation, and are providing comments and suggestions to ensure a well-structured and properly-implemented plan for a recreational cannabis market.
The proposed legislation would implement a 25% sales tax on recreational cannabis. One of the purposes of creating a recreational cannabis market is to decrease black market sales and produce tax revenue for the state. We believe that a 25% sales tax is too high and would not lead to a measurable decrease in black market sales. As a part of allowing existing Alternative Treatment Centers (ATCs) to participate in the recreation market, we believe the current sales tax on medical cannabis should be eliminated and the requirement that ATCs operate as non-profit entities be removed. Close attention should be given when figuring how the tax structure of a new recreational market will fit into the already existing cannabis industry. For example, reasonably priced recreational cannabis can decrease black market activity, which in return can positively impact limiting the diversion of cannabis to minors.
The legislation calls for the Division of Alcoholic and Beverage Control to be renamed and to adopt regulations necessary for the implementation of the bill. Although the creation of a new division of marijuana enforcement is necessary, we suggest that most of the regulatory framework to create a recreational cannabis industry in New Jersey already exists within the state Medical Marijuana Program. We believe that the NJMMP should be used as a stepping off point for the creation of a safe and effective recreational cannabis industry. There is already an entire regulatory structure that can contribute to nearly 60% of the recreational regulations.
Enforcement of the Cannabis Industry
Currently, the NJMMP is regulated and enforced by the Department of Health. If this legislation is signed into law, it is unclear if that will continue to be the same. We suggest considering “picking up” the MMP and placing it with the recreational regulation under a single agency similar to Colorado.
Also, the current legislation proposes that the Division of Marijuana Enforcement may create an “expert task force to make recommendations to the division about the content” of regulations that will govern the recreational program. The legislation doesn’t specify who will be appointed to this task force, and we would like the legislation to be more specific in this manner. We suggest that the legislation stipulates that one or more of the current ATCs be a member of the task force given their history of knowledge and compliance.
The legislation is unclear on how it will regulate companies that are entering the industry. There is no specific section explaining how the total number of retail licenses will be determined and if the number of licenses held by a single entity will be capped. For example, the MMP utilizes a vertical licensing structure that allows ATCs to hold Class 1 and Class 3 licenses for cultivating and selling cannabis. There are no licensing fees in the current legislation, and it would be helpful to include them for those who are planning to enter the market. Currently ATCs are required to operate grow facilities at a single site, but we suggest the legislation defines whether it allows ATCs to operate grow facilities at multiple locations or not. Furthermore, the legislation should allow existing ATCs to enter the recreational market more immediately than the 1-year period proposed after the legislation becomes law. It should also provide operational guidelines of how an ATC would do so. Some of these guidelines should specify the following: if ATCs would be able to dispense recreational cannabis at the same location; and if ATCs would need to have separate points of entry and sales.
Serving Size and THC Content
We believe the section regarding serving size should reflect the MMP’s current standard of 10mg THC as a single “dose.” By choosing a THC content that represents a “single serving” consumers will know the potency and what effects to expect when consuming different types of products. We agree that serving sizes should be individually packaged if a THC amount standard is established.
In addition, we suggest providing limits based on THC content and product potency as opposed to weight or liquid content measurement to define what is an “unlawful” offense. For example, 72 ounces of liquid could be an amount of product containing massive THC content.
The proposed legislation uses terms that are not scientifically accepted or industry endorsed, which can lead to problems when defining what is and what is not “lawful” under this legislation.
Other vague language such as marijuana paraphernalia, marijuana products and produces, should be more clearly defined to minimize confusion when introducing such legislation.
Also, the legislation calls for “marijuana testing facilities” but doesn’t specify who or what will prepare the accreditation requirements for such establishments. We believe the stringent testing requirements put forth by the MMP should be standard for the recreational market as well, but the legislation should clarify that testing lab framework should be independent and not state run.
Finally, the legislation uses the term medical marijuana center and the legislation should mirror defining language in the MMP to avoid conflict or confusion.