Big Changes Coming to the New Jersey Medicinal Marijuana Program

The New Jersey Medicinal Marijuana Program Will Soon See a Slate of Changes…

The New Jersey Medicinal Marijuana Program will soon see a slate of changes aimed to expand access to medical cannabis. Of particular interest to cannabis businesses, the regulations adopted by the Department of Health (DOH) allow the agency to create a permit-granting system that divides up the medical marijuana industry between cultivators, manufacturers, and retailers.

Many of the changes were made in response to Executive Order No. 6, in which Gov. Phil Murphy directed the DOH and the Board of Medical Examiners to “undertake a review of all aspects of New Jersey’s medical marijuana program, with a focus on ways to expand access to marijuana for medical purposes.”  The program has already expanded significantly since Murphy took office in 2018. The medical marijuana program now has 46,300 patients, 950 doctors and 1,850 caregivers participating.

“These rules solidify key program reforms to ensure greater patient access to this effective therapy,” Health Commissioner Shereef Elnahal said in a press statement. “With these changes, the Department will be able to add conditions more rapidly, remove barriers for minors and increase supply of product available.”

Changes to New Jersey Medicinal Marijuana Program

The DOH’s amended medical marijuana rules codify several changes that have already taken effect. They include:

• Reducing the registration fee for qualifying patients and their caregivers from $200 to $100
• Adding seniors and military veterans to those eligible for the reduced registration fee of $20
• Authorizing qualifying patients to designate up to two primary caregivers instead of just one
• Reflecting the addition of seven “debilitating medical conditions” including PTSD, by statutory enactment; and six new conditions (anxiety, chronic pain of visceral origin, chronic pain related to musculoskeletal disorders, migraines, Tourettes syndrome, and Opioid Use Disorder), by the State Health Commissioner’s March 22, 2018, petition decision, and January 23, 2019 revision
• Allowing physicians to opt out of inclusion on a public list of participating physicians
• Elevating the Medicinal Marijuana Program to division status within the Department of Health
• Expanding the forms of medical marijuana available in New Jersey to include oil-based formulations, like vape cartridges

The rule also makes additional changes that will go into effect upon publication, which will be on May 20, 2019. They include:

• Streamlining the process to petition for the addition of “debilitating medical conditions” by removing the requirement that petitions first be referred to the Medicinal Marijuana Review Panel
• Emphasizing the advisory role of the Medicinal Marijuana Review Panel to include the provision of guidance and recommendations to the State Health Commissioner regarding the medical use of marijuana
• Removing the requirement of psychiatric evaluation as a condition of physician certification of minors as qualifying patients

Changes to Permitting of Alternative-Treatment Centers

The DOH rules establish a separate permitting system for cultivation, manufacturing and dispensing marijuana for medical purposes. Going forward, applicants must submit a fee of $20,000 for each endorsement sought in the application. Each endorsement authorizes the following activities:

• A cultivation endorsement allows an ATC to possess, cultivate, plant, grow, harvest, and package usable marijuana (including in prerolled forms); and display, transfer, transport, distribute, supply, or sell marijuana to other ATCs, but not directly to registered qualifying patients.
• A manufacturing endorsement allows an ATC to possess and process usable marijuana; purchase usable marijuana from other ATCs possessing a cultivating endorsement; manufacture products containing marijuana approved by the Department; conduct research and develop products containing marijuana for approval by the Department; and to display, transfer, transport, distribute, supply, or sell marijuana and products containing marijuana to other ATCs, but not directly to registered qualifying patients.
• A dispensary endorsement allows an ATC to purchase usable marijuana and products containing marijuana from other ATCs authorized to cultivate or manufacture usable marijuana or products containing marijuana; and possess, display, supply, sell, and dispense, usable marijuana and/or products containing marijuana, to registered qualifying patients.

The new rules also add several additional criteria that the DOH will consider when evaluating permit applications. They include: experience in cultivating, processing, or dispensing marijuana in compliance with government-regulated marijuana programs; history of compliance with regulations and policies governing government-regulated marijuana programs; ability and experience of the applicant in ensuring adequate supply of marijuana; and workforce and job creation plans, including a plan to involve women, minorities, and military veterans in ATC ownership, management, and experience with collective bargaining in the cannabis and other industries.

What’s Next for NJ Cannabis Industry?

The expansion of New Jersey’s medical marijuana industry is good news, particularly given that efforts to legalize recreational cannabis are effectively dead. Senate President Stephen Sweeney recently issued the following statement via social media: “We will move forward with the expansion of our medical cannabis program as well as the progressive social justice reforms in the expungement legislation. We will not, however, pursue the legalization of adult use marijuana at this time.”

Although legalization is unlikely in the near term, business opportunities are still available. An estimated 50 to 90 medical marijuana dispensaries will be needed in New Jersey in the next three years to keep up with the Medicinal Marijuana Program’s rapidly expanding patient population, according to a DOH report. The report also revealed that the state’s existing ATCs nearly doubled their revenues from 2017 to 2018, earning $29 million and $53 million respectively.   

For entities that are interested in entering the New Jersey medical cannabis industry, there are numerous legal, logistical and operational issues that must be addressed. Prospective ATC applicants should contact a knowledgeable attorney to discuss this process in greater detail.

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:

• Will Calls for Cannabis Banking Clarity Lead to Results?
• Possible Vote On New Jersey Recreational Cannabis Bill
• New Jersey Medical Marijuana Program Adds Opioid Addiction as Qualifying Condition