Cannabis officials answer questions as industry takes shape

With the review process on licenses for recreational marijuana businesses proceeding, the top state cannabis officials made themselves publicly available for one of the first times outside of their board meetings.

Meetings of the Cannabis Regulatory Commission have all been held virtually during the Murphy administration because of the COVID-19 pandemic, which has complicated efforts to get the industry off the ground.

The appearances on Nov. 17 by CRC Executive Director Jeff Brown and Chair Dianna Houenou during the second day of the New Jersey League of Municipalities convention in Atlantic City, provided a rare opportunity for public to ask questions on how the industry is unfurling.

Many questions focused on what activities local governments can prohibit or limit; the kinds of cities that qualify for certain kinds of licenses such as for economically and racially disadvantaged applicants; how governments can promote social equity; whether cannabis establishments could participate in local town events such as fireworks displays; how to go about approving sites for cannabis establishments; and punishments for bad actors that might, for example, sell cannabis for someone under the age of 21.

Dianna Houenou, as chair of the Cannabis Regulatory Commission . – EDWIN J. TORRES/GOVERNOR’S OFFICE

“Things move quickly in the world of cannabis. We wanted to make sure everyone has the most up to date info,” Houenou said in her opening remarks at the panel, which featured several hundred attendees. Several dozen attendees had lined up during the question and answer portion, which took up more than half of the 75-minute event.

Houenou and Brown provided an overview of what the legalization efforts have looked like for medical marijuana. They also offered a rundown of the CRC’s rulemaking efforts to date.

The CRC will open applications for cannabis cultivators, processors and testing labs on Dec. 15, followed by the applications for dispensaries on March 15. Towns will have some say in how to regulate cannabis enterprises and they can levy a 2% tax on certain marijuana transactions, as well as application fees.

Brown said the tax would most likely be on the wholesale transactions rather than retail sales, and at the time the going market rate for a single pound of marijuana would be upwards of $3,000, though it’s a bit lower in Massachusetts at roughly $2,800 a pound.

Municipalities can ban consumption lounges, keep businesses out or limit their numbers. And they ban the use of marijuana in certain public places like parks or municipal buildings, similar to alcohol or tobacco. Towns also have leeway over site approval on cannabis establishments and can take steps to promote equity and inclusion for people of color, who’ve disproportionately made up the lion’s share of cannabis convictions.

Jeff Brown, executive director of the Commission. – EDWIN J. TORRES/GOVERNOR’S OFFICE

Towns are moving at different speeds in setting up their own bureaucracies for cannabis establishments, according to a show of hands Houenou asked of attendees. Some are ready to engage with applicants and businesses, and some have done so already. Others have established their own applications and licensing fees, but only a few are setting up equity projects for potential marijuana businesses.

“I also want to underscore the collective responsibility that we all have to ensure that this industry that begins to to take shape is one that is responsible and safe,” Houenou said. “That also goes for equity too.”

She added: “So while the CRC will do everything in its power to make things accessible in a meaningful way, local government and private individuals and private enterprises also have a responsibility to help move forward so we can make sure we [avoid the mistakes] in the past that led to disproportionate economic exclusion.”

The League’s annual convention – held at the Atlantic City Convention Center – typically draws 10,000 to 20,000 attendees, including municipal, county and state officials and lawmakers, lobbyists, trade groups, along with firms that do businesses with state and local governments.