Demand Fuels Progress: New Jersey’s Proposed Medical Marijuana Bill

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In the wake of Governor Phil Murphy’s Executive Order 6 and subsequent issuance by the New Jersey Department of Health (the “Department”) of its report on the expansion of the State’s medical marijuana program, prospective New Jersey patients continue to seek entry into the existing framework. Currently, the State is attempting to serve approximately 22,000 patients via only five operating dispensaries (with a sixth to open in the near future, pending final approval from the Department). In an effort to meet seemingly exponential demand, many patients, lawmakers and medical professionals are focused on expanding access under the existing program – most recently evidenced by the introduction earlier this month of Senate Bill No. 2426 (the “Bill”), a bi-partisan bill sponsored by Senators Joseph Vitale (D-Middlesex), Nicholas Scutari (D-Union) and Declan O’Scanlon (R-Monmouth).

Through a combination of new regulations and amendments to the existing New Jersey Compassionate Use Medical Marijuana Act (the “Act”), the Bill seeks primarily to increase patient access to medical marijuana and to address increasing demand through the licensing of additional cultivation facilities and dispensaries across the State. With a specific eye toward expansion, the Bill proposes to increase the number of alternative treatment centers (“ATCs”) to 40 licensed medical marijuana dispensaries and 12 medical marijuana cultivator-processors, evenly distributed across the State. The Bill would also allow license holders to operate from more than one physical location, thereby increasing the scope of service of these facilities. Licenses would be valid for three years, renewable on a biennial basis, and would be transferrable upon Department approval of the proposed transferee.

For interested applicants, the Bill provides guidance with respect to application criteria and evaluation metrics, based on a proposed 100-point rubric. In addition to any “bonus points” awarded by the Department, the Bill sets forth the following proposed benchmarks:

  • Operating Plan Summary (up to 21 points)
  • Environmental Impact Plan (up to 4 points)
  • Safety and Security Plans and Procedures (up to 7.5 points)
  • Summary of Applicant’s Business Expertise (up to 15 points)
  • Summary of Proposed Location for ATC (up to 15 points)
  • Community Impact and Social responsibility (up to 15 points)
  • Workforce Development and Job Creation Plan (up to 7.5 points)
  • Business and Financial Plan (up to 15 points)

In evaluating an application, the Department shall place emphasis on the experience of the applicant, the controlling owners and entities under common ownership or control with the applicant, and the experience of its officers, directors and full-time employees.

In addition to the modified application and ownership and operational requirements for ATCs described above, the Bill proposes to broaden the scope of the Act by increasing patient eligibility for treatment of any medical condition diagnosed by a physician, rather than a list of enumerated conditions as provided under the Act. Further, the Bill increases the maximum amount of medical marijuana that may be dispensed to a patient in any 30-day period from two ounces to four, and allows for the distribution of edible forms of medical marijuana to qualifying patients who are minors. The Bill also places limitations on application fees and procedural hurdles for both patients and primary caregivers, while also removing registration requirements for treating and/or referring physicians, all facilitating ease of access for qualifying New Jersey patients.

As New Jersey proactively addresses increasing demand, New York appears to be prepared to follow suit. Once stark opponents of legalized cannabis, both Mayor Bill de Blasio and Governor Andrew Cuomo seem to have acquiesced to the idea as an inevitable outcome. In the past month, Mayor de Blasio directed NYPD officers to cease arresting individuals using marijuana in public, while Governor Cuomo ordered an official state-commissioned study on the impact of legalization – all on the heels of a report issued by New York State Comptroller Scott Stringer earlier this month, concluding that legalized marijuana could create a $3.1 billion market in the state. These measures find federal support from U.S. Senators Chuck Schumer and Kirsten Gillibrand, each who continue to vocalize support for legalization.

As state, federal and public support continue to mount, New Jersey appears poised to expand its medical program, trending toward Governor Murphy’s original campaign goal of full scale legalization. With New York potentially close behind, this could be the catalyst for a shift in the cannabis narrative on the East Coast.

As the law continues to evolve on these matters, please note that this article is current as of date and time of publication and may not reflect subsequent developments. The content and interpretation of the issues addressed herein is subject to change. Cole Schotz P.C. disclaims any and all liability with respect to actions taken or not taken based on any or all of the contents of this publication to the fullest extent permitted by law. This is for general informational purposes and does not constitute legal advice or create an attorney-client relationship. Do not act or refrain from acting upon the information contained in this publication without obtaining legal, financial and tax advice. For further information, please do not hesitate to reach out to your firm contact or to any of the attorneys listed in this publication.

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