May 24, 2018

NJ Cannabis Insider: What's next for medical marijuana in N.J.

Since my law firm launched its Cannabis Practice several months ago, I am met with two recurring questions. First, what legal changes are on the horizon in New Jersey? And second, how can I prepare now to become part of what many experts expect will be a multi-billion industry in the state?

The truthful answer to the first question—no one knows. New Jersey already has a medical marijuana law and, with it, a fledgling medical marijuana industry. But the industry is fledgling less because of the law itself, and more because of the associated regulations. The law establishes the minimum number of dispensaries at six; it is the regulations that converted that minimum into a (temporary) maximum. There is no THC limit in the law; there is in the regulations. From a legal perspective then, New Jersey’s medical marijuana industry can be liberalized and expanded—significantly—by the Murphy Administration alone. And the Governor is poised to act. The Department of Health’s “Executive Order 6 Report” contemplates erasing the 10% THC limit, expanding the number of medical conditions for which marijuana can be prescribed, and, most notably, licensing an undetermined number of new medical marijuana businesses. But regulatory changes are just one possibility. The law itself could be changed, and on that front, the “Jake Honig Law” appears to have broad support in the Legislature. Among other things, the law would create up to 80 new licenses for dispensaries and up to six new licenses for cultivators throughout the state. So, the best-informed answer to the first question is that while no one truly knows what New Jersey’s medical marijuana industry will look like one year from today, all indications point to more doctors prescribing to more patients for more medical conditions and patients filling those prescriptions at more dispensaries. In short, what is now a fledgling industry is soon going to expand rapidly.

The second question is easier. Dispensaries and cultivators have already been licensed in New Jersey. The Department of Law and Public Safety and the Department of Health previously combined efforts during the Christie Administration to solicit applications for licenses, vet those applicants, and ultimately grant licenses. While no one yet knows who will be vetting and approving applications for the Murphy Administration, government decision-makers are certain to be looking for the same things that won applicants licenses under Governor Christie: a thoroughly developed business that equally balances access with compliance. What does that mean in practice? There are three pillars.

• First, be well capitalized and provide as much transparency around the source of funds as possible.

• Second, remember that applications will be vetted by law enforcement. It is imperative to provide a physical security plan, a cybersecurity plan, training manuals for employees, and a written compliance plan clearly demonstrating that the business will self-monitor. Including a retired law enforcement official as a consultant to the business is an obvious (and easy) plus.

• Finally, remember that businesses are providing a product that people will ingest, which is not subject to regulation by the Food and Drug Administration. Applicants that win licenses are those that recognize that and provide regulators with a credible, written plan for product quality assurance.

The coming months promise to be incredibly exciting. Thousands of individuals and businesses are eager to enter the medical marijuana industry in New Jersey. The precious few who actually win entrance will be those who prepare now and adhere to the three pillars.

This article was originally published in NJ Cannabis Insider's May 24, 2018 issue, which can be found here.