Marijuana Regulators From 19 States Form Group To Coordinate Legalization Implementation

Efforts to approve enabling legislation to enact a regulated marijuana market in New Jersey have already hit a hitch, with two committees pulling companion bills from scheduled hearings on Thursday. But a separate proposal to decriminalize cannabis possession was approved by a Senate panel—with a late amendment to lessen penalties for psilocybin-related offenses.

About two-thirds of New Jersey voters approved a referendum to legalize cannabis on Election Day, but it’s still up to lawmakers to pass legislation that will set up the rules for the program and allow for retail sales. Legislators moved quickly to introduce and act on implementation bills, which cleared the Senate Judiciary and Assembly Oversight, Reform and Federal Relations Committees on Monday.

Under the decriminalization bill that passed the Senate committee on Thursday, cannabis penalties would be further reduced and police could not use the odor of marijuana as justification to conduct a search. Under a new amendment that was added to the legislation, possession of up to one ounce of so-called magic mushrooms would be considered a a “disorderly persons offense,” a significant reduction from its prior status as a third-degree crime.

A disorderly persons offense is punishable by a $500 fine and potential jail time, so advocates wouldn’t consider the psychedelic “decriminalized” if the provision is enacted into law. Still, it’s a significant reduction from the current penalty for people convicted of third-degree crimes, which can come with three-to-five-year prison sentences and fines of up to $15,000.

With respect to marijuana, “possession of up to six ounces of marijuana, or up to 170 grams of hashish would be completely decriminalized and have no associated criminal or civil penalties,” a summary of the bill prepared earlier this week states. Distribution of up to one ounce of cannabis or five grams of hash would come with a civil penalty of $50.

Meanwhile, disputes about marijuana tax policy and revenue allocation are festering when it comes to the legalization implementation bill, leading the Assembly Appropriations and Senate Budget and Appropriations Committees to pull the legislation from Thursday’s schedules.

“The cannabis regulatory enforcement bill is being held,” Assembly Appropriations Committee Chairman John Burzichelli (D) said at the opening of the panel’s Thursday session. “Negotiations and fine tuning are still underway on that topic.”

The cannabis commercialization bills were expected to get full floor votes next week, but that won’t happen until the legislation clears the panels that have for now deferred action. That said, the separate decriminalization proposal is expected to receive floor consideration in both chambers on Monday.

The disagreements on cannabis tax issues are familiar disputes that played out the last time lawmakers unsuccessfully attempted to enact the reform legislatively.

Assembly Speaker Craig Coughlin (D) wants to add a user fee to the legalization bill to bolster revenue for the state beyond the normal sales tax rate for purchases. Gov. Phil Murphy (D), who strongly campaigned in favor of the referendum, said this week that he’s supportive of adding new taxes, but wants them to be added at the cultivation stage.

But Senate President Steve Sweeney (D) and lead sponsor Sen. Nicholas Scutari (D) quickly pushed back, saying in a joint statement that the state “should not impose any additional taxes that will put the cost of legally purchasing marijuana out of reach for the communities that have been impacted the most.”  They also asserted that increasing the tax rate would hurt efforts to eliminate the illicit market.

Further complicating the process is the fact that reform advocates are unsatisfied with the scope of the current bill’s social justice provisions. Several groups, including ACLU New Jersey and New Jersey Police Perspective, have spoken in favor of imposing additional taxes on cannabis sales in order to support reinvestments into communities most harmed by the drug war.

Thank you @GovMurphy & @SpeakerCoughlin!

It is critical that legislation to regulate the marijuana industry also advances social & racial justice.

A big part of that is taxing legal marijuana so that the state can invest in communities harmed most by the drug war. #LegalizeNJ https://t.co/YkULeZk2ob

— New Jersey Policy Perspective (@NJPolicy) November 9, 2020

As it stands, the currently proposed 6.625 percent state sales tax and local option to tack on an additional two percent tax will not generate enough revenue to adequately fund restorative justice programs, advocates says. ACLU of New Jersey’s Amol Sinha told Politico that adding an excise tax to the legislation “is the most efficient way” to accomplish those goals.

Advocates are also upset that the bills as introduced would continue to criminalize personal cultivation of marijuana and divert some revenues to police.

ACLU said that pulling the enabling legislation from the committee hearings on Thursday was “the right move” and they “hope this means lawmakers are able to give more attention to drafting amendments so it can better advance equity and justice.”

UPDATE: The Legislature pulled S21/A21, the enabling legislation to legalize cannabis, from the committee hearings today.

This is the right move.

We hope this means lawmakers are able to give more attention to drafting amendments so it can better advance equity and justice.

— ACLU of New Jersey (@ACLUNJ) November 12, 2020

But some are questioning the legality of imposing a user fee not included in the constitutional amendment that voters approved. Language of the measure states that that marijuana sales “shall only be subject to the tax imposed” under the state sales tax, as well as the local option.

Scutari and Sweeney also said they will be pushing for an amendment to allocate additional revenue to “impacted communities to reverse the harmful effects of systemic racism in our criminal justice system, from arrest to sentencing to incarceration.”

Without enabling legislation, it’s not entirely clear what would happen after the constitutional amendment takes effect on January 1, 2021. If there are no regulations to create a retail market for marijuana sales, it may be the case that possession and consumption would be legal without a means to lawfully access the plant, and it’s also likely that state courts will have to make determinations on individual cannabis-related prosecutions.

Under the bill as currently drafted, adults 21 and older would be allowed to purchase and possess up to an ounce of marijuana or five grams of concentrates. Retailers wouldn’t launch right away, but as the licensing system is set up, medical cannabis dispensaries would be able to sell marijuana products to adult consumers.

Local bans on cannabis shops would be permitted, but delivery services would be allowed statewide regardless of each jurisdiction’s policy. Retailers could also provide for on-site consumption with local approval. Home cultivation for personal use would be prohibited, unlike in most legal states.

As legislators work through these policy disagreements, Murphy last week appointed Dianna Houenou, a current administration staffer and former policy counsel to the ACLU of New Jersey, to head the state’s Cannabis Regulatory Commission (CRC). She emphasized that social justice would be a key regulatory priority.

.@DHouenou360 has been a critical voice for social justice on my team, and I know that with her as Chair of the Cannabis Regulatory Commission, we will create an equitable, fair, and inclusive recreational marijuana marketplace.
https://t.co/QafKDk0zcb

— Governor Phil Murphy (@GovMurphy) November 12, 2020

CRC would be responsible for granting licenses to growers, processors, wholesalers, laboratory testing facilities, distributors, delivery services and retailers.

But as those are set up, the bill will let medical cannabis dispensaries sell marijuana products for the recreational market. Scutari proposed that plan last month, saying that adults could start purchasing cannabis from dispensaries within just weeks after the election. However, a top regulator pushed back on the proposal, noting that the state’s existing medical marijuana have already struggled to keep up with patient demand.

The senator addressed that issue in the legislation. His bill would allow each medical producer to open two more cultivation facilities to increase the available supply. “There’s no reason why, in the next 90 days, they can’t grow any more product and get it out on the shelves,” he told Marijuana Moment in a phone interview last week. “I mean, not saying they will, but they could—it’s not a physical impossibility.”

Also under the legislation, 15 percent of cannabis licenses would go to for minority-owned businesses, and an additional 15 percent would be given to businesses owned by women or veterans. If an applicant pledges to hire people from communities disproportionately impacted by crime or unemployment, they would get licensing priority.

Further, the bill would establish an Office of Minority, Disabled Veterans and Women Cannabis Business Development that would be tasked with promoting participation in the industry by marginalized groups.

Meanwhile, New Jersey Attorney General Gurbir Grewal (D) is encouraging police and prosecutors to exercise discretion around marijuana offenses in the interim.

Sweeney said that the top prosecutor should “use his legal and moral authority to issue clear guidelines to all law enforcement authorities—state, county and municipal—to stop all arrests and suspend all pending criminal cases against individuals for possession of amounts of marijuana that would be considered personal use.”

“It’s time for these arrests that have disproportionately affected people of color to stop,” he said.

Assemblyman Jamel Holley (D) similarly said last week that all low-level cannabis prosecutions should be ended, stating that the referendum vote demonstrates that “there is no patience anymore for prosecuting people caught smoking and possessing marijuana.”

Marijuana Regulators From 19 States Form Group To Coordinate Legalization Implementation

Photo courtesy of Martin Alonso.