Committees in both the Assembly and state Senate approved a measure that would legalize adult-use recreational marijuana, setting the proposals for a showdown full-floor vote on March 25.
Senate Bill 2703 passed by a 6-4 vote with one abstention in the Senate Judiciary Committee Monday evening while its counterpart, Assembly Bill 4497, passed by a 6-1 vote with two abstentions at the Assembly Appropriations Committee that same day.
A senior administration official for Gov. Phil Murphy’s office who spoke on condition of anonymity told NJBIZ that the governor had been making “dozens of calls” to lawmakers earlier today to get them on board with voting in favor of the legal marijuana bill.
Both measures would allow for anyone over 21 years of age to possess up to an ounce of marijuana.
The product would be taxed at $42 an ounce and the industry regulated by a five-person Cannabis Regulatory Commission, which will function similar to how the Casino Control Commission operated following the legalization of gambling in the 1970s.
A less controversial bill which both committees approved, Senate Bill 10, establishes the Jake Honing Compassionate Use Medical Marijuana Act – ramping up the state’s existing medical marijuana program, expanding where patients can buy prescription cannabis, and phasing out the sales tax on medicinal cannabis by 2024.
The legislation also calls for “drug recognition experts” to detect drivers under the influence, as no reliable and scientifically accurate breathalyzer for marijuana-usage exists.
The approval of both measures followed hours of closed-door meetings as lawmakers hammered out last-minute changes to the legislation, including a dramatically increased expungement process for people with marijuana-related convictions.
Dozens of activists, lobbyists and business executives traveled to the Statehouse in the morning expecting to testify, but the crowds gradually thinned out as backroom negotiations dragged on for several hours.
S2703 calls for capping the growth facilities at 28 for the first year and a half, Sen. Nicholas Scutari, D-22nd District and a key backer of the marijuana legislation, told NJBIZ.
“It’s a consideration to not oversaturate the market with the product,” Scutari said.
New Jersey’s existing alternative treatment centers where patients can purchase medicinal marijuana would be grandfathered into the new law, Scutari said.
They would be allowed to operate business as usual for six months, after which they can sell their excess cannabis to recreational users.
Gov. Phil Murphy’s budget for the 2020 fiscal year, which starts in July, calls for $60 million of tax revenue from legal marijuana, assuming patrons can purchase cannabis beginning January 2020.
The budget also anticipates a one-time cost of $21 million to set up a regulatory framework, spelling out $39 million of net revenue in the next year. Murphy’s budget predicts that enforcement and regulation of cannabis will cost the state roughly $12 million annually.
Oversight of the marijuana industry will be left up to a powerful five-member Cannabis Regulatory Commission, which will handle matters such as licensing and investigating violations.
Murphy would pick three of the members while Senate President Stephen Sweeney, D-3rd District, and Assembly Speaker Craig Coughlin, D-19th District, would each pick a member.
The governor would pick the chair and executive director, while the state Legislature would pick the vice-chair position.
After three years, the commission would examine whether the tax rate is effective in the desired goal of curtailing the black market and if it would need to be changed.
The commission staff would wield considerable authority to ensure every marijuana facility in the state complies with cannabis regulations. They would have control over all of the state’s marijuana and could “seize, possess and dispose of cannabis items” to ensure regulations are followed.
Number of licenses
At least 30 percent of adult-use licenses and 30 percent of medicinal marijuana licenses would be encouraged to go to businesses owned by women, veterans, people of color and those living in “impact zones,” which have faced higher concentrations of drug-related law enforcement activity.
The impact zones are Atlantic City, Bridgeton, Camden, East Orange, Elizabeth, Hamilton Township, Irvington, Jersey City, Newark, Millville, Passaic, Paterson, Perth Amboy, Plainfield, Trenton and Vineland.
“This is very important because it opens the doors to individuals that may not have had an opportunity,” said Rep. Annette Quijano, D-20th District, in the assembly committee.
The bill also allows for conditional licenses, something Quijano called “a very nice touch.” Conditional licenses are temporary licenses that are issued to allow holders to act as a lawful cannabis grower, processor, wholesaler, or retailer before satisfying all remaining requirements.
“It provides individuals a conditional license and it gives them a limited time period to get funding which actually helps individuals that are not multi-millionaires,” said Quijano.
Additionally, it allows for microbusinesses, which are aimed to ensure a set number of licenses go to New Jersey residents.
The microbusinesses have to be owned by a New Jersey resident of at least two years and at least half of the management have to live in the town or a neighboring town where the business is looking to set up shop.
The legislation does not specify how many retail licenses will be issued. Instead, the total will be determined later by the commission, based on population.
Municipalities would have the option to levy their own taxes.
Municipalities with a cultivator or manufacturer within their borders could impose a tax of up to two percent on the product. Towns with a wholesaler can impose a rate of up to one percent and municipalities with a retailer can impose a tax rate of up to three percent.
Towns and cities can still ban any marijuana business, or decide to cap the number of licenses awarded within the town. Municipalities can also enact zoning restriction for marijuana businesses.
Any ordinances enacted prior to the bill’s enactment banning marijuana businesses – which dozens of towns and cities have already passed – would be knocked down, and those towns would have roughly six months to adopt new ordinances.
But, towns cannot bar residents from going elsewhere to purchase marijuana and smoking it privately in their own home.
Towns can impose a fine of $200 for using non-smokable cannabis products, including edibles such as candies.
The legislation mandates that an employer cannot make any hiring or firing decisions based on someone’s usage of marijuana.
Employers could still prohibit marijuana usage if it could impair the worker’s ability to do their job, such as a driver, heavy machinery operator or security provider.
Businesses still have the right to maintain a “drug and alcohol-free workplace” and they can still prohibit employees from bringing marijuana to work.
As part of the expungement provision, employers cannot consider criminal charges, arrests or convictions related to distribution or possession, when determining whether to hire a candidate or fire an employee.
That factors into the “virtual expungement” provisions which a convicted person would enjoy while they manually apply for a records expungement of any marijuana convictions.
The legislation calls for cannabis delivery services, akin to pizza or Chinese food delivery.
Drivers would have to be at least 18 years old, their cars would have to be outfitted with a lockbox and a GPS, and could not include any markings indicating they are a cannabis delivery vehicle.
Several GOP lawmakers testified against the bill before casting their votes, laying out doomsday scenarios which they believed would follow marijuana-legalization – often drawing out applause from anti-legalization groups such as NJ RAMP.
Sen. Michael Doherty, R-23rd District, prior to casting his vote called the legislation “a deal with the devil.”
“We have a sick society. We have a lot of social ills. We have alcohol use, opioid abuse, we have fatherlessness, we have inner city crime, public schools that don’t work, an obesity epidemic, pornography epidemic…society is falling apart. On this track, society will be extinct in a few decades,” Doherty said.
“I think you should rename this bill the Drug Pusher, the Drug Pusher’s Friend Act,” added Sen. Gerald Cardinale, R-39th District. “Some of the worst people in our society are going to get a clean record. To be willing to break our laws once, twice, many times, we’re still going to give them a clean record.”