New Jersey Cannabis Legislation Dissected by Charles X Gormally of Brach Eichler’s Cannabis Law Practice
After reviewing the proposed adult-use cannabis legislation on March 12, 2019, Co-Chair Cannabis Practice Group Charles X Gormally of Brach Eichler’s Cannabis Law Practice has several thoughts on the bill. He and his colleague John Fanburg have compiled these thoughts to help better understand and make sense of the bill. Charles X Gormally has been part of the cannabis discussion for a decade, representing medical cannabis clients since 2009.
1. The key obstacle to previous versions of the adult-use cannabis bill was urban legislators, who did not feel there was enough attention on social and economic justice issues. The current bill provides encouragement if minority- and women-owned businesses. However, Charles X Gormally said creating micro-markets is unrealistic. The bill doesn’t limit the number of licenses, perhaps in an attempt to make their value low enough to attract entrepreneurs, Charles X Gormally said.
2. New Jersey needs to address the great disparity of arrests of minority offenders, but despite the bill’s innovative expungement system, law enforcement and the courts could not deal with the burdens outlined in the current legislation.
3.The bill includes consumption lounges as part of each retail operator, Charles X Gormally pointed out. They will be separate from, but connected to, a retail operation. But this linkage will cause towns to not want to allow the business in that town. According to Charles X Gormally, a better practice would be to allow the market to develop first and add consumption spots later. This would demonstrate that cannabis can exist peacefully in New Jersey.
4. The warm dynamic between legislative leaders and the administration surrounding the budget has had a great influence on cannabis. With a $100 million revenue line in the budget from cannabis activities, there is no doubt the budget dialogue requires an expedited solution to the cannabis issue.
5. No farmland assessed property can be used and any real estate involved in cannabis cannot be part of a government enterprise or tax credit zone. Clearly, Charles X Gormally stated, the intention is to attempt to not mingle cannabis with any other programs. This is also why cannabis has its own separate bureaucracy.
6. The agreement on a five-member Cannabis Regulatory Commission suggests movement on both sides, Charles X Gormally said. This indicates that the legislature understands cannabis regulation to be the role of the administration. It also shows that the administration understands that the Department of Health is not equipped to absorb this new regime, as it requires a specialized platform for practical and philosophical reasons.
7. There is a robust delivery service that is adjunct to the retail location. This will be a hot area and business could see an efficient, organized provider offering this service to retailers and making a significant profit, Charles X Gormally said. Retailers can create websites to order and have the delivery effectuated by the service.
8. With a lack of criteria on testing, the lab business will not materialize, especially given its high capital barrier to entry.
For additional information about Brach Eichler’s Cannabis Law Practice, contact Charles X Gormally, member co-chair, at (973) 403-3111.