Photo Credit: THOMAS E. FRANKLIN
The New Jersey Department of Health is moving ahead with its plan to expand the medical marijuana program through regulations even as legislative efforts to legalize adult-use and increase medical marijuana have seemingly stalled.
Last week, the department issued its proposed regulations and amendments to the Compassionate Use Medical Marijuana Act.
“I think it further defines the redirection of where New Jersey’s headed with the medical side of cannabis,” said John Fanburg, co-chair of the Cannabis Law Practice at Brach Eichler.
From a business perspective, here’s what the proposed changes mean, according to Fanburg:
APPLICATION PROCESS: New license applications will “require submission of evidence of community engagement and minority, women, and veteran participation in an ATC’s operations through ownership, management, and local hiring plans, and endorsements of community organizations,” states the regulations.
“Clearly ownership structure is a key component,” Fanburg said. “If we’re limiting the number of licenses then I think the way the department would be scoring these applications – they will look at to what extent is this licensee or prospective licensee minority owned, veteran, women and that will be part of the overall assessment that the department will take into consideration.
“I think the governor and the department are looking for meaningful involvement and opportunity for these three categories, not just tokenism.”
Samuel P. Moulthrop, a partner at Riker, Danzig, Scherer, Hyland & Perretti added “as with other businesses and industries, studies indicate that women, minorities, and veterans are underrepresented in the cannabis industry. Moreover, citizens have genuine concerns about the impact of allowing ATCs in their communities. So these additional requirements address social goals such as promotion of a more diverse workforce and ensuring that a community is positively impacted by an ATC’s planned operations in that community.”
REMOVING BARRIERS: The regulations will increase the number of dispensaries, expand the medical conditions that allow for medical marijuana use, reduce patient fees and make it easier and less stigmatizing for physicians to participate. “The governor is making good on his commitment and his promise to facilitate the expansion of dispensaries for New Jersey’s population that could be provided relief in this area,” Fanburg said.
This is important because, “the State is currently experiencing medical cannabis shortages, and there are only six ATCs in the State that can dispense medicine to registered patients. So the Medical Marijuana Division will need to approve permits and endorsements in a logical manner that meets both the product and access needs of registered patients,” according to Moulthrop, who is part of Riker’s Cannabis Law Area,
NO MORE REQUIRED VERTICAL INTEGRATION: Separate licenses for cultivation, manufacturing and dispensing will be available. Currently, all operations must be done by one entity under one roof.
“This will create more opportunity for different segments of this business to participate if they don’t have to be everything. They may be really good at one thing but they have no interest in doing the other,” Fanburg said.
NEW BUREAUCRACY: The Medicinal Marijuana Program will be elevated to division status within the Department of Health.
“You’re adding potentially more cost to government. At the same time there’s a fee component for those who want to be in this business and industry that theoretically is going to pay for this increase in bureaucracy,” Fanburg said. “I think the governor and the department realize this is going to be big and huge and could be a precursor to developing the bureaucratic framework so that if regulated adult-use comes into place, we have the division set up and established to manage and monitor that particular program. I don’t know if that’s the thinking, but it could and it makes sense.”
Overall, Fanburg is particularly impressed with the Department of Health’s efforts on encouraging applicants “who have real substantive minority, women and veterans.”
“I think it’s good for New Jersey from a business enticement as well as community engagement,” he added. I think they’re trying to avoid the carpetbagging from other countries and other states to swoop into New Jersey and take control of this. They want New Jersey people and New Jersey businesses to be in this business to the extent they want and to be supported by the government from a local support system. I think that makes a lot of sense and that it’s good for New Jersey. I think it’s the right direction.”
The proposed regulations are now available for public comment – the 60-day period ends Aug. 17. The department must read and respond to all comments; the rules would go into effect once the department publishes a notice of adoption.