New Jersey Becomes the 14th State to Legalize Cannabis, Raises Bar for Equity Efforts

New Jersey became the 14th state to legalize cannabis for adults over 21 on February 22, 2021. On that day, Gov. Murphy ov. Murphy signed three bills related to cannabis legalization, ending a three-year campaign to regulate and tax cannabis in the Garden State. In November 2020, New Jerseyans overwhelming approved a ballot referendum supporting cannabis legalization. The following month, the legislature responded with the passage of S.21 and S.2535. However, both measures stalled due to concerns surrounding penalties for underage use.

On February 19, 2021, the Senate Judiciary Committee advanced A.5342, which addresses penalties for underage use. On February 22, 2021, both chambers voted to approve A.5342, and Gov. Murphy immediately signed all three bills into law. You can check out a summary of the bills here.

On February 25, 2021, just days after signing the bills into law, Gov. Murphy announced his appointments to the Cannabis Regulatory Commission (CRC) naming Dianna Houenou as the inaugural chair of the commission.  

On August 19, 2021,  the CRC adopted its first set of rules for adult use cannabis. On December 15, 2021, the CRC began accepting adult use cannabis license applications. In March 2022, the New Jersey Cannabis Regulatory Commission (CRC) approved licenses for seven alternative treatment centers to allow sales of adult-use cannabis products to adults 21 and older without a medical card. The CRC authorized 13 individual dispensaries to begin operations on April 21.  On April 21, 2022, the adult use market officially opened selling nearly $2 million in cannabis products on opening day.

Under guidance issued by the CRC, medical patients may purchase up to three ounces every 30 days, while adult-use consumers can purchase up to one ounce per transaction.

Legalization builds on the momentum created when Gov. Murphy signed Jake's Law - named after Jake Honig, a pediatric patient who used medical cannabis during his battle with cancer - in June of 2019. The measure instituted many reforms to the medical cannabis program including expanding qualifying conditions, adding chronic pain; providing anti discrimination protections, expanding access by increasing the number of cultivators and allowing home delivery.

Social Equity 

New Jersey led the way in establishing new standards for social equity with the passage of its legalization laws. Under the legalization law, social equity businesses receive priority in application review and approval and setting aside 25% of the total license issued for social equity applicants or businesses that plan to employee at least 25% of their employees from residents of impact zones. Social equity businesses are defined as owned by those who live in economically disadvantaged areas, which are defined as zip codes whose average median household income is less than 80% of the state average, has a health uninsured rate that is at least 150% of the state rate, and has a poverty rate at least 150% of the statewide rate; or those who have had a previous conviction for a cannabis offense. The legislation also establishes an optional Social Equity Excise Fee. The funds generated from the excise tax are used to invest, through grants, loans, reimbursements for expenses, and other financial assistance in for-profit and non-profit organizations and public entities, as well as direct financial assistance to individuals, to create, expand, and promote educational and economic opportunities and activities for the health and well-being of both communities and individuals. Lastly, all license fees and penalties collected are deposited into the “Cannabis Enforcement Assistance and Marketplace Modernization Fund.” The fund would also receive deposits from tax revenues on the sale of personal use cannabis items.  70% of the funds collected are used for investments, including through grants, loans, reimbursements for expenses, and other financial assistance, in municipalities described as “impact zones,” as well as directing financial assistance to qualifying residents.

Cannabis Regulatory Commission approves 30 medical licensees, begins accepting adult-use license applications

On December 8, 2021, the New Jersey Cannabis Regulatory Commission (CRC) approved 30 additional medical licenses. Since 2019, the 30 licenses had been frozen by a court order that lifted earlier this year. The CRC said the approval would double the number of medical dispensaries in the Garden State.

Also, on November 9, the CRC issued the Notice of Application for recreational licenses. The Notice of Application specifies eligibility requirements, the prioritization process, application requirements, scoring measures, approval processes, and denial determinations for adult-use applicants. The applications will be reviewed as they are received on a continuous rolling basis, with Social Equity, Impact Zone, and Diversely Owned Businesses receiving priority.

License applications were accepted for cultivators, manufacturers, and testing laboratories starting on December 15, 2021. Applications for retailers will start being accepted on March 15, 2022. Applications can be found here. 

Cannabis Regulatory Commission adopts initial adult-use rules

On August 19, 2021, the Cannabis Regulatory Commission (CRC) adopted the first set of rules that will guide the cultivation, manufacture, and sale of adult-use cannabis in New Jersey. Some of the highlights include:

• Prioritizing applications from certified minority-, women-, and disabled veteran-owned businesses and from applicants who live or will operate in one of several designated impact zones.
• Flexible application requirements for microbusinesses and those applying for conditional licenses.
• Application fees as low as $100.

The rules become effective immediately upon filing with the Office of Administrative Law and will remain in effect for up to one year. The CRC will begin accepting applications for cannabis business licenses soon.

You can check out a full summary of the initial rules here. 

Gov. Murphy announces final appointments to Cannabis Regulatory Commission

On February 25, 2021, Gov. Murphy announced three appointments to the Cannabis Regulatory Commission (CRC), completing the five-member body. Gov. Murphy appointed Maria Del Cid, Sam Delgado, and Charles Baker as the final three members. Maria Del Cid most recently served as the Director of Policy and Legislative Services at the New Jersey Department of Health. Sam Delgado most recently served as Vice President of External Affairs for Verizon before his retirement in 2019. Since 2017, Charles Baker has served as Constituent Advocate and Projects Specialist for U.S. Senator Cory Booker. These three appointees will join previously announced appointees Commission Chair Dianna Houenou and Krista Nash.

Created under the 2019 “Jake’s Law,” the CRC will regulate New Jersey’s medical cannabis marketplace and provide oversight for the adult-use recreational market.

Gov. Murphy signs three bills ending cannabis prohibition in N.J.

On February 22, 2021, Gov. Murphy signed three bills related to cannabis legalization, ending a three-year campaign to regulate and tax cannabis in the Garden State. In November 2020, New Jerseyans overwhelming approved a ballot referendum supporting cannabis legalization. The following month, the legislature responded with the passage of S.21 and S.2535. However, both measures stalled due to concerns surrounding penalties for underage use.

On February 19, 2021, the Senate Judiciary Committee advanced A.5342, which addresses penalties for underage use. On February 22, 2021, both chambers voted to approve A.5342, and Gov. Murphy immediately signed all three bills into law. You can check out a summary of the bills here.

Although Gov. Murphy’s signature means the end of arrests and prosecution for cannabis in New Jersey, it will likely take a few months before residents are able to purchase cannabis from retailers as the recently formed Cannabis Regulatory Commission develops rules for adult-use licenses.

Medical cannabis program expanded

On June 2, 2019, Gov. Phil Murphy signed A20, also known as Jake’s Law — named after Jake Honig, a pediatric patient who used medical cannabis during his battle with cancer. The law institutes many much needed reforms to the medical cannabis program, including:

• expanding qualifying conditions, including by adding chronic pain;
• providing anti-discrimination protections, including related to education, rental housing, professional licensing, and employment;
• expanding access, including by increasing the number of cultivators, retailers, and manufacturers; and
• allowing home delivery.

A more detailed summary of the changes can be found here.

Stay connected

To stay updated on the status of marijuana policy reform in New Jersey, be sure to subscribe to MPP's alerts, if you haven't done so already.