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In a surprise move, a state commission on Thursday delayed approving the expansion of eight medical marijuana dispensaries to start selling recreational weed in New Jersey as soon as late April.
The Cannabis Regulatory Commission that oversees the nascent industry did approve 68 cultivators and manufacturers for conditional licenses. However, those operations are not expected to launch until the fall at the earliest.
The expansion of the eight alternative treatment centers to begin selling weed, expected by industry experts, was put on hold as CRC Executive Director Jeff Brown said the commission wants plans for how they can accommodate both medical marijuana patients and those seeking to buy recreational cannabis.
Brown said the centers simply don’t have enough weed, contending the market may be short by 100,000 pounds to meet both medical and recreational populations.
“We may not be 100 percent there today, but I assure you we will get there,” Brown said before the board voted 5-0 to table voting on the expanded ATC applications. “We have a few things to address and when we address them I’m happy to return to this body with a further update.”
“Our goal is to work with the industry and the industry to work with us so at the very next CRC meeting we have a cohort of ATCs that are turn-key to launch this market here, simply pending a vote by this commission,” Brown said. “If for any that are still not there, hopefully (they’ll be) ready for conditional approval pending certain timelines and regulatory milestones that we can work to get done.”
Brown said the CRC would allow the alternative treatment centers to expand weed supply as quickly as possible.
He said the commission will conduct site visits in the next few weeks of the eight ATCs to make sure they can handle both medical and recreational marijuana customers, noting that the commission wants separate lines and entrances for customers.
Brown said he also wants a commitment the dispensaries will hire people with past past marijuana arrests or people who come from disadvantaged areas.
The New Jersey Cannabis Trade Association said in a statement that while it “remains optimistic that the CRC will sooner rather than later open the adult-use cannabis market in New Jersey ... we admit to being disappointed with today’s decision to further continue its delay.”
“In November 2020, New Jerseyans made it very clear that they wanted a safe and legal adult-use cannabis marketplace in the state,” the industry group said. “It goes without saying that no one could have foreseen that some 16 months later, we would still be waiting to see this come to fruition.”
Senate President Nicholas Scutari, D-Union, the architect behind both the state’s medical and adult recreational cannabis bills, was incensed over the CRC’s latest delay.
“Totally unacceptable,” Scutari texted to NJ Advance Media just after 7 p.m. “The Senate is weighing its options with regard to oversight.”
It was unclear how long the delay will be. The dispensaries are not allowed to begin sales without the commission’s approval, and the next board hearing is scheduled for May 24. Vice chairman Sam Delgado suggested holding a hearing next month.
Just after 6 p.m. the CRC posted a special meeting for April 11 on its website.
The panel did approve 68 cultivators and manufacturers for conditional licenses as a social equity measure to give the smaller operations a piece of what is expected to be a multi-billion dollar industry alongside multi-state operators and well-heeled investors.
“This is a historic action that the Board is proposed to take with these first conditional licenses to sell adult use recreational cannabis in the state of New Jersey,” Brown said before the board vote. “I am humbled to make this announcement.”
“These are the first businesses to get a foot forward in the state of New Jersey,” he added. “I cannot stress that enough.”
It will take months, however, for these businesses to get up to speed.
Starting weed sales by spring would align with Gov. Phil Murphy’s revised fiscal year 2022 state budget proposal, which now anticipates $4 million in cannabis state sales revenue by June 30.
Murphy campaigned for the state’s top office on legalizing adult-use recreational cannabis in 2017 to what he said then was a way to help communities most harmed by the nation’s war on drugs that disproportionally affected Black and brown men. The Democratic governor signed the New Jersey Cannabis Regulatory, Enforcement Assistance, and Marketplace Modernization Act into law on Feb. 22, 2021.
New York is racing to have its adult-use cannabis market opened by the end of this year. Pennsylvania wants it too.
Asked about the latest delay Thursday during his regular TV show on News 12, Murphy said: “It’s not gonna be months.”
“The way this is supposed to work, and it is working this way: If a medical dispensary can prove it has more than enough supply for its medical customers, it’s at least eligible,” the governor said. “Assuming it meets all the other requirements, it should be deemed eligible. I believe it will still be a matter of weeks. It’s not gonna be months.”
“Equity is a huge part of our proposition here,” Murphy added. “I know that may take longer than folks otherwise would like. The equity and making sure we have an industry that looks like our state, that is not just in words but in action, a step tangibly to undoing the war on drugs. That’s easier said than done. We want to get it more right than any other state.”
“But the medical piece, I feel like this remains a matter of weeks,” he said. “I can’t tell you how many or on what day, but they’re very close.”
The first wave of license applications began on Dec. 15 from cannabis growers, product manufacturers and testing labs. Among the applications that came in then were from about a dozen alternative treatment centers, including the eight whose approvals were postponed on Thursday.
The Cannabis Regulatory Commission missed a self-imposed deadline of Feb. 22 over what Director Brown said were issues with incomplete applications from the alternative treatment centers. Their biggest impediment from moving forward: lack of municipal approvals, meaning the towns in which they sit don’t want weed sales.
The commission on March 15 began accepting applications from dispensary owners — those interested in opening a retail outlet to sell recreational cannabis to adults. On Wednesday, the commission said it had received 272 applications so far.
Conditional license applicants, impact zone business applicants, and those that qualify for priority consideration will have their applications at the front of the line for consideration, according to the panel.
Under the panel’s rules, social equity businesses, diversely-owned businesses, micro businesses, and conditional license applicants will be prioritized in their review and scoring.
The issue of how to best use revenue from cannabis sales to go toward restorative justice programs has been the subject of regional hearings this month by the Cannabis Regulatory Commission. The hearings attracted several dozen residents who provided input. The third and final hearing was last Wednesday.
NJ Advance Media staff writers Brent Johnson and Susan K. Livio contributed to this report.
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Suzette Parmley may be reached at sparmley@njadvancemedia.com or follow her on Twitter: @SuzParmley