NJ Cannabis Regulatory Commission Adopts Interim Rules For Legal Marijuana Industry

Last February, Governor Murphy signed legislation that legalized recreational cannabis and set a deadline of Aug. 21 for the commission to establish its rules. While the law lays out the types of cannabis business licenses that will be available in New Jersey, it left the commission with autonomy to craft the rules that will govern the industry.

The law will allow only 37 new marijuana growers to be licensed before February 2023. But it did not set limits on the other types of licenses, which include manufacturing, delivery, wholesale, distribution and retail.

NJ Cannabis Regulatory Commission Adopts Interim Rules For Legal Marijuana Industry

Last February, Governor Murphy signed legislation that legalized recreational cannabis and set a deadline of Aug. 21 for the commission to establish its rules. While the law lays out the types of cannabis business licenses that will be available in New Jersey, it left the commission with autonomy to craft the rules that will govern the industry.

The law will allow only 37 new marijuana growers to be licensed before February 2023. But it did not set limits on the other types of licenses, which include manufacturing, delivery, wholesale, distribution and retail.

To meet last week’s deadline, the Cannabis Regulatory Commission (CRC) drafted and released the most necessary regulations. The CRC will continue work on the full rules to guide delivery, distribution and wholesaling.

Currently, only businesses licensed to grow, process and sell medical marijuana to authorized patients currently operate in New Jersey. But many of these dispensaries will sell recreational marijuana to the public, too. Regulations state that the dispensaries must show they can legally grow, process and sell recreational marijuana in their home municipalities, certify they have sufficient product to serve patients and customers 21 and older and that they will not make operational changes that favor the legal market over the medical one.

Microbusinesses, which have 10 employees or less, will not count toward any license limits the commission sets. They also can pay just 50% of the licensing fees larger companies will face, but 100% of their ownership must reside in New Jersey.

The commission will also give priority to social equity businesses, those in “impact zones,” or municipalities unevenly affected by marijuana prohibition, and to those run by women, racial minorities and disabled veterans. The social equity businesses must have 50% ownership by people with previous marijuana convictions or by those who have spent five of the last 10 years living in economically disadvantaged areas.

The licensing process will include background checks, but a criminal conviction will not necessarily bar someone from obtaining a license. If a person can demonstrate their rehabilitation to the commission, they could still move forward.

The rules become effective upon filing with the Office of Administrative Law, and remain in place for one year.

“It’s been a long road to get here,” said CRC Chair Dianna Houenou. “And for many, really too many people, it’s been a decades-long effort to push the state of New Jersey to abandon its prohibitionist policies.”