Senator Troy Singleton’s (D-Burlington) bill to enhance cannabis lending passed the Assembly Health Committee hearing with bipartisan support.
It has been introduced into the Assembly as A. 5179, “Revises certain restrictions on ownership of medical cannabis alternative treatment centers.” Singleton’s bill has the same title under S. 2875 Assembly members Verlina Reynolds-Jackson, Verlina (D-Mercer), Brian Bergen (R-Morris), and Jamel Holley (D-Union) are the primary sponsors of the cannabis lending bill in the Assembly with Gordon Johnson (D-Bergen) as a co-sponsor.
Holley was a prime sponsor of cannabis legalization. He is running an aggressive campaign in a three-way race to become a State Senator in Legislative District 20 in Union County. Gordon Johnson is running to replace retiring State Senate Majority Leader Loretta Weinberg (D-Bergen).
Cannabis Lending Hearing
“The sponsors are concerned about the access of Persons of Colors opportunities in this emerging area of commerce. This bill seeks to ensure that,” committee Chair Herb Conway (D-Burlington) said.
Amendments to the bill clarify that the Cannabis Regulatory Commission (CRC) will have the authority to review all business arguments by which capital is invested. If the terms are not commercially reasonable and come at the license holder’s detriment, then the CRC will not approve the deal.
NJ Cannabis Business Association (NJCBA) President Ed DeVeaux previously voiced concerns about the bill and the relationship between the lender and the license holders. He was apprehensive the CRC might not be able to properly regulate the area. Thus, the inclusion of the amendments was a positive development.
“This bill is intended to augment the substantial efforts of the legislature has already enacted through the form of micro-business licenses and conditional licenses in the cannabis licensing business here in New Jersey,” said attorney Paul Josephson of the Duane Morris.
“The goal here is to attract capital to the marketplace,” he added. “Capital is hard to come by in this industry and is often times very expensive.”
It’s the industry’s biggest problem for entrepreneurs since many banks do not want to business with them.
Josephson explained the bill would allow for companies to invest in minority-owned, women, and veteran cannabis companies that hold licenses.
Managing Director Jerel Registre of the Curio WMBE has been pushing especially hard for this since they want to lend to business and testified before the committee. The Maryland-based company’s fund was launched last fall. He noted they want to invest in medical cannabis companies.
“We received significant national coverage that speaks to the uniqueness of our approach,” Registre said. “It allows the efforts like the fund to invest in up to 10 dispensaries in the state such that we can provide support.”
After seven years, the investing companies are forced to divest, theoretically leaving the entrepreneurs as the sole owners.
He added they support the CRC closely monitoring such arrangements.
It was noted former Mayor Doug Palmer of Trenton favors the cannabis lending bill as well.
The cannabis lending bill passed the State Senate on December 17th with an overwhelming majority 32-8 when the legalization and decriminalization bills passed the Senate as well.