Cannabis is on the ballot in New Jersey for the November 3, 2020 election (the “Referendum”), but what does that actually mean? Assuming it passes, does that mean I can grow at home? Open my own shop? Sell at my leisure? This article will briefly address what the Referendum does address, what it does not, and where the State, citizens, and entrepreneurs go from here.
As many are painfully aware, the history of adult use cannabis in New Jersey has been one of fits and starts. Indeed, Governor Murphy had campaigned on the promise of adult-use cannabis legalization within his first hundred (100) days in office. Well, the State is almost one thousand (1,000) days later, and, surprise-surprise, there has been no legislative fix achieving the Governor’s campaign goal. That has not been for a lack of trying, as many legislative proposals have been advanced, most prominently in the form of S2703, as sponsored by one of New Jersey’s most prominent cannabis advocates, Senator Nicholas P. Scutari. Notwithstanding the fact that S2703 has, at least in its draft form, been viewed by many as an exemplary piece of legislation (including having had several material portions incorporated into Illinois’ adult-use legislation), it failed to meet the requisite twenty (21) votes needed to pass in the New Jersey Senate.
As a result, on December 16, 2019, the New Jersey State Legislature passed a resolution placing the constitutional amendment on the ballot. Accordingly, on November 3, 2020, New Jersey Public Question 1 will ask the Citizens of New Jersey whether there should be an adult use marketplace, specifically asking if voters “approve amending the Constitution to legalize a controlled form of marijuana called ‘cannabis’ . . . [that] [t]he State commission created to oversee the State’s medical cannabis program would oversee the new, personal use market . . . [that] [c]annabis products would be subject to the State sales tax . . . [and that] [i]f authorized by the Legislature, a municipality may pass a local ordinance to charge a local tax on cannabis products.” So what happens once the “yes” votes carry it?
Many in the public operate on the misunderstanding that January 1, 2021 brings with it a whole new bundle of rights for citizens. However, the proposed amendment to the Constitution makes clear that “[t]he growth, cultivation, processing, manufacturing, preparing, packaging, transferring, and retail purchasing and consumption of cannabis, or products created from or which include cannabis, by persons 21 years of age or older, and not by persons under 21 years of age, shall be lawful and subject to regulation by the Cannabis Regulatory Commission.” Similarly, even the resolution passed by the Legislature authorizing the Referendum made clear that any dele
gation to the Cannabis Regulatory Commission (the “CRC”) must first be “authorized by law enacted by the Legislature.” Luckily, just yesterday, Senator Scutari indicated that the Legislature is already working on that enabling legislation, which has at its starting point the framework of S2703.
Interestingly, the Legislature does not need to create the CRC following the Referendum because the CRC already exists as a creature of statute by virtue of the medical cannabis expansion bill signed into law on July 2, 2019, though it only comes into formal existence upon the appointment of the five (5) commissioners, which have yet to be acted upon by the Governor, the President of Senate, and the Speaker of the General Assembly (those statutorily vested with the power to recommend and appoint these Commissioners).
This is a long way of saying that a “yes” vote starts the process, but the Governor and the Legislature have to take certain initial steps even just to sit the CRC, with the CRC subsequently having to first develop, create, and implement its initial regulations for how this adult-use marketplace will be run. If states like Massachusetts are any guide, the role of the industry in helping to comment, propose, and develop these interim regulations will be critical to the initial success of New Jersey’s fledgling adult use marketplace, and attorneys at Foley Hoag have been central in assisting clients in emerging marketplaces in these efforts.