NJ Assembly Approves Medical Marijuana Bill

Last Week, the New Jersey Assembly Approved Proposed Revisions to the Jake Honig Compassionate Use Medical Marijuana Act

On May 23, 2019, the New Jersey Assembly approved proposed revisions to the Jake Honig Compassionate Use Medical Marijuana Act that would expand the state’s existing Medicinal Marijuana Program. The latest version of the bill would establish separate cultivator, manufacturer, wholesaler, and dispensary permits, create the Cannabis Regulatory Commission (CRC) to oversee the medical cannabis program, and allow for the delivery of medical cannabis, among other changes.

As detailed in prior articles, the legislation is named after Jake Honig of Howell. The 7-year-old boy, who died from brain cancer early this year, obtained significant relief from cannabis oil. However, due to restrictions on the amount his parents could obtain under the existing Compassionate Use Medical Marijuana Act, they were forced to use it sparingly. 

 Jake Honig Compassionate Use Medical Marijuana Act

Under the proposed bill, oversight and authority over the medical cannabis program would transfer from the Department of Health to the Cannabis Regulatory Commission (CRC) once the members of the CRC are appointed, and the CRC is organized.

Patients will also have greater access to medical cannabis. Physician assistants and advanced practice nurses may authorize patients for medical cannabis. In addition, health care practitioners will not be required to register with the CRC or be publicly listed in any CRC registry as a condition of authorizing patients for medical cannabis.

For a period of 18 months after the effective date of the bill, patients may be dispensed up to three ounces of medical cannabis in dried form or the equivalent amount in any other form. Thereafter, the maximum amount that may be dispensed to a patient will be established by regulation. The bill will also allow practitioners to authorize up to a one-year supply at one time.

On the industry side, the bill seeks to increase the number of alternative treatment centers (ATCs). It also establishes four distinct permit types in connection with the production and dispensing of medical cannabis: medical cannabis cultivators, medical cannabis manufacturers, medical cannabis wholesalers, and medical cannabis dispensaries. For a period of 18 months after the effective date of the bill, an entity will be permitted to hold only one permit of any type. However, after 18 months, an entity will be authorized to concurrently hold medical cannabis cultivator, medical cannabis manufacturer, and medical cannabis dispensary permits.

The bill also establishes a new permit type, clinical registrant, which will authorize the permit holder to engage in all conduct related to the cultivation, manufacturing, and dispensing of medical cannabis and medical cannabis products as is authorized for other ATC permit holders. The clinical registrant will be required to enter into a contractual relationship with an academic medical center, which is defined as “a facility located in New Jersey that has faculty practices in addiction medicine and pain management, has a graduate medical training program that includes primary care and specialized medicine, is the principal teaching affiliate of a New Jersey medical school, and has the ability to conduct research related to cannabis.”

Academic medical centers will engage in clinical research related to medical cannabis in order to advise the affiliated clinical registrant concerning patient health and safety, medical applications, and the dispensing and management of controlled dangerous substances. Clinical registrant applicants will be required to demonstrate at least $15 million in capital. Clinical registrants will be authorized to serve all qualifying patients, as well as qualifying patients who agree to participate in clinical research. Clinical registrants may operate from more than one location and may be approved for a satellite dispensing location and may relocate to another location in the same region unless the CRC determines relocation would be contrary to the purposes of the medical cannabis laws.

In another significant change, the bill would exempt medical cannabis from all state sales tax as of January 1, 2025. Until then, any sales tax assessed on medical cannabis must be exclusively appropriated to programs for the treatment of mental health and substance use disorders.

Latest Amendments for Medical Marijuana Bill

The latest version of the Jake Honig Compassionate Use Medical Marijuana Act, which was approved by the Assembly, includes several committee amendments. Below are some of the most notable:

• Cap on Cultivation Entities: The total number of entities authorized to cultivate medical cannabis would be limited to 23 for the first 18 months after the effective date of the bill. The limit includes all entities currently holding a permit and the entities to be issued permits pursuant to the bill but does not include any microbusiness issued a cultivator permit.
• Permit Restrictions: For 18 months after the effective date of the bill, no entity may hold more than one permit, regardless of type. As introduced, during this period, an entity would be authorized to concurrently hold a medical cannabis cultivator and medical cannabis manufacturer permit. An exception to the above restrictions would be available for the first seven ATCs issued permits after the effective date of the bill. Additionally, of these seven permits, at least one each will be required to be located in the northern, central, and southern regions of the State.
• Satellite Locations: Current ATCs and ATCs authorized pursuant to an application pending as of the effective date of the bill may hold up to three satellite dispensary locations. 
• Consumption Areas: Medical cannabis dispensaries and clinical registrants may establish medical cannabis consumption areas, subject to certain requirements.
• Labeling Requirements: All medical cannabis and medical cannabis products must include a label describing the production date, strain, growth method, ingredients, storage requirements, allergen warnings, and the ATCs involved in cultivating, manufacturing, and dispensing the medical cannabis or medical cannabis product.
• Handler Certification: Any person who handles medical cannabis, including ATC employees, must possess a medical cannabis handler certification issued by the CRC. The amendments set forth certain qualification and training requirements for issuance of a handler certification.
• Cannabis delivery: The bill would authorize delivery of medical cannabis, including medical cannabis products, to patients and their designated and institutional caregivers. Transfers and deliveries will be accomplished by medical cannabis handlers who possess a transfer or delivery certification, as applicable.  A handler may possess both transfer and delivery certifications, subject to these requirements. The CRC may authorize the use of an Internet-based web service for patients and caregivers to request and schedule deliveries of medical cannabis.
• Permit Transfer: Instead of prohibiting all sales or transfers of ATC permits, any sale or transfer of an interest of five percent or more will be subject to CRC approval and will be conditioned on completing a criminal history record background check with respect to the purchaser.
• Permit Renewal: An initial ATC permit will be valid for one year and will be renewable annually; as introduced, the bill provided that initial permits would be valid for three years and renewable biennially.
• Municipal Tax: Municipalities in which a medical cannabis dispensary or clinical registrant is located will be authorized to establish a local transfer tax of up to two percent on the sales price of all medical cannabis dispensed by that dispensary or clinical registrant.
• Special Permits: One-third of all permit types will be issued as conditional permits, and 10 percent of all permit types to be issued to microbusinesses. The amendments establish certain requirements for issuance of a conditional permit and conversion of a conditional permit into a full permit, as well as specific requirements for microbusinesses, including ownership requirements, facility size restrictions, and capacity restrictions regarding the quantity of medical cannabis handled by the microbusiness in a one-month period.

What’s Next?

The New Jersey Senate is expected to approve the bill on May 30, 2019. If the bill passes the Senate, it would then be delivered to Gov. Phil Murphy for enactment into law.

If you have any questions, please contact us

If you have any questions or if you would like to discuss the matter further, please contact me, Dan McKillop, at 201-806-3364.

This article is a part of a series pertaining to cannabis legalization in New Jersey and the United States at large. Prior articles in this series are below:

• Big Changes Coming to the New Jersey Medicinal Marijuana Program
• Will Calls for Cannabis Banking Clarity Lead to Results?
• Possible Vote On New Jersey Recreational Cannabis Bill

Disclaimer: Possession, use, distribution, and/or sale of cannabis is a Federal crime and is subject to related Federal policy. Legal advice provided by Scarinci Hollenbeck, LLC is designed to counsel clients regarding the validity, scope, meaning, and application of existing and/or proposed cannabis law. Scarinci Hollenbeck, LLC will not provide assistance in circumventing Federal or state cannabis law or policy, and advice provided by our office should not be construed as such.