Prior to the enaction of the Cannabis Regulatory, Enforcement Assistance, & Marketplace Modernization Act in February, dozens of New Jersey towns had local ordinances prohibiting cannabis businesses from setting up shop in their town, and others, like Jersey City and Asbury Park, were openly hospitable and welcoming to them.
Robert DiPisa, who co-chairs the cannabis practice at Cole Schotz, recommends that interested dispensary or grow operators approach town administrations that were previously against it or aren’t yet known as cannabis business-friendly because competition for licenses likely won’t be as hot there.
“You have to imagine there’s going to be more applications” in towns that have been pro-cannabis,” he explained. “The state wants to do diversification, all throughout the state…There’s certainly some sleeper municipalities…do your due diligence, don’t just flock to those overly welcoming cities.”
DiPisa was joined by PKF O’Connor Davies Cannabis Practice Co-Chair Jeffrey Gittler, Genova Burns LLC Counsel Jennifer Roselle, and GTB Partners LLC Partner Michael Torpey on the Cannabis: The Effect on New Jersey Business panel, held via Zoom and moderated by NJBIZ Editor Jeff Kanige.
First and foremost, interested operators must gain community support from the town they’re looking to enter. In prior application rounds, this factor was pass/fail, DiPisa said. It might not be a blanket rejection, though: Torpey noted that it’s possible that a town that bans cannabis retail would be okay with cultivation.
Cannabis businesses don’t just have to appease towns and follow the state law. Federal regulations also apply to them, which, in the case of 280E tax law, currently prohibit cannabis businesses from taking deductions allowed for other businesses since the plant is still classified as a controlled substance.
However, “New Jersey has a law in process to decouple the tax law from the federal law,” Gittler said, which might make 280e not applicable for taxes in New Jersey, giving state cannabis operators a break. Gittler also discussed the Secure and Fair Enforcement Banking Act, a federal bill introduced by Senator Bob Menendez that would allow cannabis businesses to gain fairer access to banks. Menendez reintroduced the bill this week.
For employers, CREAMMA prohibits them from terminating an employee for testing positive for cannabinoids, creating a flurry of worry in the New Jersey business community that they wouldn’t be able to stop an employee from coming to work high.
On the positive testing front, though CREAMMA makes no exceptions for safety sensitive jobs, there are a handful of gap fillers, Roselle explained. Those subject to federal contract can be prohibited from consuming cannabis in their free time, as can those with a commercial driver’s license due to CDL law. Guidelines for law enforcement from the Attorney General prohibit cannabis consumption, too, which Roselle believes would trump CREAMMA’s lack of exception.
However, for all other employers, there is currently nothing on the books that would help them prohibit employees from getting high in their off hours. Workplace Impairment Recognition Experts, written into CREAMMA and to be established by the CRC in the coming months, are an employer’s opportunity to prevent high employees, but the training isn’t available yet.
In the interim, now’s the time to decide who the WIREs will be, Roselle said: In house or out of house; an HR person or someone else?
Though it’s not enacted yet, Torpey said he wouldn’t be surprised if more legislation came down the pike to safeguard high risk jobs.
“At the very end [of the legislative process] there was a push to impose some of these workplace safety [measures]…there was a great deal of sympathy for it,” Torpey said. “I was surprised at how forceful the efforts were at the end and nearly successful.”