On December 17, 2020, the New Jersey Legislature passed the massive 240-page Assembly Bill 21, also known as The New Jersey Cannabis Regulatory, Enforcement Assistance, and Marketplace Modernization Act. Assembly Bill 21 establishes the framework for adult-use cannabis and paves the way for the industry in New Jersey through licensing and taxation. The vast and comprehensive Bill is chock full of information and provisions, but here are ten things New Jerseyans should know.
• Adult-use cannabis is not yet legal in New Jersey for two reasons. First, the constitutional amendment allowing it is not effective until January 1, 2021, and retail sales cannot occur until after the Cannabis Regulatory Commission (“CRC”), the government regulator, adopts rules for retail sales. Second, only “regulated” cannabis will be licensed and permitted, so marijuana sourced and sold on the block without a permit is not legal -- at least not yet.
• Possession of up to six ounces of marijuana is no longer a crime or subject to civil penalties. Individuals with past or present legal challenges for cannabis-related offenses may have their records expunged. Many seeking a second chance for better employment prospects, housing access, financial stability, family integrity, and educational opportunities may finally get some relief.
• Public consumption of cannabis is not permitted unless ingested at a state and locally licensed consumption area. Like “open container” enforcement of alcoholic beverages, public consumption of cannabis is not allowed.
• Retail sales of cannabis would be taxed at 7%, including a Sales and Use Tax and a Social Equity Fee that are estimated to generate hundreds of millions of dollars. At least 70% of the revenues generated by taxes and fees must be invested in “Impact Zones,” which include Atlantic City, Bridgeton, Camden, East Orange, Elizabeth, Franklin Twp. (Somerset), Jersey City, Irvington, Maurice River Twp., Millville, Newark, New Brunswick, Orange, Passaic, Paterson, Perth Amboy, Plainfield, Quinton Twp., Salem, Trenton, and Vineland. These investments include grants, loans, reimbursements of expenses, and other financial assistance. If you live, work, worship, or play in an impact zone, more help is on the way. Schools, non-profits, and other community-based organizations in impact zones should start identifying their needs for potential funding.
• Local entrepreneurs can benefit from impact zones. The CRC must offer licenses to entrepreneurs with less access to capital and small businesses who meet the eligibility criteria. If you are motivated and committed, this industry may provide opportunity.
• Goals for minority, women, and disabled veteran-owned business provide opportunities for disadvantaged groups to enter the market and provide employment in their communities. Even those convicted of marijuana offenses may be eligible for licensing under Assembly Bill 21.
• Municipal taxation of cannabis transactions is yet another opportunity for municipalities and impact zones to raise money to serve the community better, close budget gaps, and stabilize finances.
• Municipalities can ban “new” cannabis businesses from operating within their borders through local legislation. This is sure to create lots of debate.
• The $127 million a year spent on the illegal sale of marijuana can be reallocated to address serious public safety threats.
• Employers still maintain the right to drug test in order to ensure safety and limit their liabilities. Employees may be able to use cannabis while “off the clock” without penalty from employers, and employers must have “reasonable suspicion” that an employee is under the influence on the job to order a drug test.
The complexities and nuances of Assembly Bill 21 are simplified here but its significance cannot be overstated. When consumed responsibly by adults, many argue that cannabis is “harmless” and even has medical benefits for “debilitating diseases.” The Founding Fathers grew it, and other users include mayors, governors, federal legislators, and presidents. Consumption had no impact on their aspirations, but dreams of the less fortunate have been dashed. Some experts argue that Assembly Bill 21 does not go far enough to redress black and brown communities disproportionately impacted by criminal enforcement. A journey of a thousand miles begins with the first step. It is time for New Jersey to level the playing field and reduce inequities, and it has.
Vaughn L. McKoy, JD, MBA, a former federal and state prosecutor, and municipal business administrator (Paterson, NJ), specializes in Litigation, Regulatory and Government Affairs as Partner and Co-Chair of the Cannabis Advisory Group at Inglesino Webster Wyciskala and Taylor, LLC, located in Parsippany, New Jersey. He can be reached at email@example.com.