Going green, maybe

Gov. Phil Murphy said a lot of things in 2017 but one thing in particular registered with an enthusiastic subset of constituents. Murphy vowed to legalize adult use cannabis in the first year of his governorship, and he would do so for social equity reasons.

Despite said enthusiasm, New Jersey didn’t see green in 2018. And in the face of legislative and advocacy efforts that nearly brought the issue to the Senate floor and the Assembly, a last-minute cancellation due to just enough uncertainty among lawmakers on March 25 ended the quest in 2019. Instead, lawmakers decided on Dec. 16 that the decision would go to voters in 2020.

Now that Murphy’s promise is in the hands of those who put him in office, what happens next?

Hugh O’Beirne, president of New Jersey Cannabis Industry Association, said he doesn’t think the electorate voting to legalize cannabis “is a foregone conclusion.” Cannabis advocacy groups such as New Jersey United for Marijuana Reform and NJCIA have “a lot of work” to do, though the “general trajectory will be toward a favorable result.”

Opposition groups like Smart Approaches to Marijuana will also have work to do to encourage the public to vote against it on the November 2020 ballot. New Jersey CannaBusiness Association President Scott Rudder said he “hope[s] we don’t see outside groups spending millions trying to defeat the measure” but that messaging will continue to go out in television ads, community programming, and more from advocacy groups and elected officials.

If the ballot measure passes in November, the result will be an amendment to the State Constitution that legalizes adult use cannabis. Historically, voters have passed 90.6 percent of the 32 constitutional amendments they’ve voted on since 1995, according to Ballotpedia.

The question’s vagueness might work against legalization, said lobbyist and Managing Director of Archer Public Affairs Bill Caruso. It spells out that cannabis would be legal for adults 21 and over, that it would be overseen by the Cannabis Regulatory Commission – which, given the statutory deadline to have control over the medical cannabis program – should be fully operational come November. Cannabis would be subject to state sales tax and, if authorized by the Legislature, a municipality may charge a local tax, too.

“But [there’s] no word on if there will be an additional excise tax. Polling gets better on cannabis when you talk about taxing and regulation. The legalization is not the selling point, the fact that it’ll drive revenue is,” Caruso said. “But we can’t talk about that because we don’t know what that’s going to be. This could hurt this in the poll.”

If it fails, New Jersey is shut out from cannabis legalization for years, Caruso said. “We’re prevented from going back to the ballot and there’s no way in heck the Legislature would ever pick up an initiative and vote on it if the public voted it down.” The state would have to wait for federal relief. Caruso estimates that federal decriminalization could come in two years. By then, New York and Pennsylvania will have likely moved on legalization, promoting the wrong kind of market growth — black market growth — here in New Jersey.

If the question passes, the Legislature still needs to set up framework for legal cannabis, at which point LoFaro & Reiser partner Eric Reiser said we’re “back at square one.”

Even if lawmakers draft legislation in anticipation of the initiative passing, New Jersey won’t see adult use dispensaries until 2022, he said. “It’ll be a gray area” from the day after it passes until the legislation is in place, he said. And in the hypothetical world where lawmakers drag their feet on creating the necessary framework in a reasonable amount of time, someone would likely sue the government.

ATC litigation

On the medical front, the most recent application round for alternative treatment centers has embroiled the state in a lawsuit from applicants disqualified because the attachments on their applications couldn’t be opened. Announcements of the 24 awards are on hold until that’s remedied. Of the “new six” ATCs named in December 2018, Rise Dispensaries in Paterson became the first to open just a few weeks ago, and Caruso and Reiser both expect at least one to open in 2020.

At Rise’s opening on Dec. 20, 2019, Jeff Brown, assistant commissioner of the Department of Health Medicinal Marijuana Program, said the agency is pressing the remaining five awardees to open for patients.

“We have two that are close, there are others right behind them, and we’re going to continue to push until we see them all open up,” Brown said.

Currently, there are more than 63,000 patients in the state’s medical program, and demand for medical cannabis continues to increase as the patient population grows.

“The governor has plans to push it to over 250,000 patients by November 2020, which may result in more marketing and education around the MMJ program,” said Dasheeda Dawson, author of “How to Succeed in the Green Rush” and Chief Executive Officer of MJM Strategy, which has helped open cannabis businesses across the country.

Groups such as Doctors for Cannabis Regulation and NJCIA are focusing on health education to get people to understand more than the anecdotal evidence regarding cannabidiol, or CBD.

“There’s also discussion about strain proliferation within the state. New Jersey’s flower genetics, cultivation technology and strain options are fairly limited as compared to the global market,” said Dawson. “This makes genetics and cultivation innovation/technology key sectors for New Jersey’s success.”

As far as beating border states to the punch with adult use cannabis, both Pennsylvania and New York have bills introduced and willing governors. But if New Jersey hammers out the socio-economic issues before bringing in adult-use, there’s a good chance it will still have a better market than other states, Dawson said. Each day, 95 people mostly within the black and Hispanic communities are arrested for low level cannabis offenses in New Jersey. Murphy signed a law on Dec. 18, 2019 that expunges low-level cannabis convictions, though even attorneys such as Reiser are confused about what expungement really means for something that is still criminalized.

Another law signed that day restored voting rights for 80,000 New Jerseyans on probation or parole, which could bring a wave of new voters into November’s ballot initiative.

“I’m sure a good portion of those folks were impacted by prohibition on cannabis. We have a whole other voter block that is available to chime in on this topic,” said Rani Soto, president of Hoboken-based hemp distribution company Brote AG and cannabis advocate. “What I’m really interested in seeing in the next 10 or 11 months is how we’re going to mobilize these people and educate them on how to vote.”

Advocacy groups have work to do to reach these constituents, he said, many of whom may be first-time voters.

“How do we get these people activated to get there, to go into this voting booth and select the right choice? That in itself is a challenge when you have never been in a booth to vote.”