EDITOR’S NOTE: NJ Cannabis Insider is hosting an in-person business networking event July 14 at The Asbury in Asbury Park. Tickets are limited.
The state agency tasked with regulating New Jersey’s new multi-billion dollar cannabis industry was on the hot seat Thursday before a key panel.
Members of the Senate Judiciary Committee raised several concerns about New Jersey legal weed during a hearing that lasted five hours at the Statehouse in Trenton.
Chief among them: The Cannabis Regulatory Commission’s pace in granting cannabis licenses, keeping medicinal cannabis affordable, the confusion over workplace rules on weed use by employees, and limited available data.
Senate President Nicholas Scutari, D-Union, cut to the chase in his introductory remarks on why he called for the hearing shortly after the CRC declined to issue licenses for recreational weed to medical marijuana dispensaries at its March 24 meeting.
“I’m confident that if we did not start this process, the adult weed market would still not be open in New Jersey,” said Scutari, who sponsored the state’s medical and recreational cannabis laws and said after the March 24 meeting that “these delays are totally unacceptable.”
The adult market debuted on April 21 with seven alternative treatment centers offering adult weed sales at a dozen locations.
No fewer than eight groups presented testimony during the hearing, which focused on the CRC’s rollout of the adult recreational market and strides made in ensuring the social equity component of the nearly 15-month old cannabis law.
Lawmakers also heard from representatives of multi-state operators now selling adult recreational weed and cannabis attorneys who described their clients’ chief impediments to entering the market, including a lack of capital and what they called endless regulations on the state and municipal levels.
Representatives for banking and cannabis trade groups also testified on the difficulty of participating in an industry that has been legalized on the state level but is still illegal on the federal level.
Sen. Troy Singleton, D-Burlington, asked if pricing was holding steady on medical cannabis as adult weed demand is now competing for supply.
“A lot of my constituents are telling me that they are being priced out of the medicinal cannabis market,” said Singleton.
CRC Executive Director Jeff Brown said pricing dipped slightly even though the illicit market offers product at essentially half the price of the legal market.
The New Jersey Business and Industry Association raised concerns over what it said was a lack of clarity over cannabis testing and rules on firing in the workplace.
Under the new law, employers can still conduct random and pre-employment drug tests for weed use and can still ban marijuana use at work. They cannot fire, discipline or refuse to hire someone solely because the result is positive.
To enforce their rules, employers must have a certified Workplace Impairment Recognition Expert witness impaired behavior by an employee and a positive drug test indicating presence of marijuana in a person’s system.
But employers say they are still at a loss more than a year after the new cannabis law took effect, largely because of a court fight over those impairment experts and the CRC’s own lack of certification standards for them.
“This can’t continue,” Ray Cantor, vice president of government relations for NJBIA, told the panel. “We need standards for the business community. They are still operating in the dark over this issue.”
Five senators on the 12-member committee raised concerns over cannabis in the workplace and the CRC’s delay in having any standards to deal with it as outlined in the new law.
“Right now it’s status quo,” said Brown, acknowledging the CRC has not yet certified workplace standards.
“The CRC is not keeping up,” said Sen. Anthony Bucco, R-Morris. “That’s a piece that has to be worked out. We need to have a process in which employers can follow regulations without fear of making a mistake.”
Sen. Paul Sarlo, who chairs the Senate Budget Committee and owns a 500-employee construction firm in Bergen County, hit Brown even harder on the Workplace Recognition Experts issue.
“Shouldn’t this have been a priority?” Sarlo, D-Bergen, asked Brown. “Let’s get it done.”
On Thursday Brown reiterated the substantial work he said the CRC has done over the past year to set up a safe and equitable cannabis market that “reflects the diversity of our great state.”
“After 13 month of existence we held 15 public hearings,” said Brown. “We’ve awarded so far 102 conditional licenses to manufacturers and cultivators. … We have had one of the fastest timelines to new business applications. We’re on par with other states. We’re proud of the framework we have in place.”
Brown said the CRC delayed issuing licenses in March over fears there would not be enough supply of marijuana for both the medical and recreational markets.
“We’re constantly monitoring patient supply,” said Brown. “We continue to monitor the ATC’s.”
Brown said the CRC has received 900 retail applications after opening that round on March 15. More than half, or 500, have been reviewed.
When Scutari asked if the CRC needed more staff, Brown said the staff had grown from 20 to 60 and more compliance officers were being added.
“We anticipate in the new fiscal budget that our budget will grow from $8 million to $17 million to increase staff and salaries,” said Brown.
At the same time, Brown stressed the CRC’s social equity goals in its review of applications for conditional licenses from smaller cultivators and manufacturers, many of which have diverse ownership.
Of the 102 conditional licenses so far awarded - 37 are majority Black-owned, 13 are majority Hispanic or Latino/Latina-owned, and one-third have owners with past marijuana convictions, said Wesley McWhite, the CRC’s Director of Diversity and Inclusion, who testified alongside Brown.
However, it could take up to a year or more for these smaller operations to begin selling weed.
After the CRC gave the green light to the dispensaries at its April 11 meeting the market opened to long lines, 10 days later. The CRC reported that opening day sales topped $1.9 million from over 12,000 customers.
Adult weed sales have been robust even though New Jersey started with far fewer medical dispensaries than other states, including Illinois and Arizona, to sell recreational marijuana.
The state had fewer dispensaries because the medicinal marijuana program stalled from expanding due to a 2019 lawsuit filed by applicants who were disqualified by state officials. A judge imposed a two-year stay that prohibited the state Department of Health from awarding new medical cannabis licenses.
New medical licenses were not awarded until late last year, but these operators have yet to become operational. As a result New Jersey has only 23 medical dispensaries owned by a dozen multi-state operators that serve approximately 130,000 registered medical marijuana patients.
Seven operators have been approved by the CRC to begin adult weed sales at up to three satellite stores each.
Among them, Curaleaf, TerrAscend, Green Thumb, Acreage and Columbia Care all appeared before the committee on Thursday to tout what they described as a seamless rollout of adult weed in New Jersey and gave suggestions on how to make it better.
CRC Chair Dianna Houenou was notably absent from the hearing. Brown said she was under the weather. The four other commissioners of the five-member board also did not appear before the committee.
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Suzette Parmley may be reached at sparmley@njadvancemedia.com or follow her on Twitter: @SuzParmley