The NJ Cannabis Regulatory Commission (NJCRC) pushed the annual review of the Social Excise Equity Fee (SEEF) tax on cultivators and manufacturers and fined companies $105,000.
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SEEF Tax Deadline Pushed by NJCRC
NJCRC Chair Harris Laufer announced early in the meeting that “We are going to waive a rule in our regular battery of rules that says we have to decide on the Social Equity Excise Fee.”
“We are waiving that rule that will allow us to solicit input from members of the industry, cultivators, trade associations, and other individuals to allow us to make a much more informed decision,” he explained. “Stay tuned for a possible announcement on that.”
SEEF Increase Calculation Time Needed
NJCRC Chief Counsel Aruna Mohankumar noted they needed to announce and review the SEEF annually by November 1st for it to take effect January 1st of the next year.
“Staff requires additional time to adequately calculate to that number. Therefore, we’re recommending the board waive the regulation and remove the November 1st deadline…,” she said. “I know the Commission has the authority…”
“See guys…we want to get this one right. The marketplace is at a very pivotal time, and we want to make sure we land this plane as ably as possible,” Laufer explained.
“We also want to solicit the opinion of the industry as well before we make this decision,” he added.
Laufer commended Commissioner Amelia Mapp on handling town halls on what the tax revenue generated should be spent on.
The NJCRC passed it 5-0 to applause.
“Wow, it’s nice to have a crowd! That was good!” he joked to laughter. “Wow. Well done.”
NJ Cannabis Operators Happy at SEEF Review Push
Organic Green Buds Chief Operating Officer Nelson Lindsley was against the SEEF increase and wanted them to address invoices not paid quickly.
He said a similar tax to the SEEF ruined the California cannabis market when he worked there.
“Cultivators and manufacturers are delivering products… while some retailers are paying to pay their wholesale invoices. Some of them are the larger operators. Most of them seem to be that…,” Lindsley added.
He proposed that the CRC establish a system to address this.
Tanner Travers of Pantheon was also happy they pushed the SEEF. He said it would be burdensome to pay an increase for his small company.
Travers also lamented many unpaid invoices, making it hard to do business. He also among those who said the cost would be pushed onto consumers to cover.
“…Please do not make it harder for small businesses…,” he added.
NJ CannaBusiness Association (NJCBA) Founder and Township Green dispensary owner Scott Rudder was also happy the SEEF wasn’t increased.
Rudder also noted the many cultivators waited to get paid.
NJCTA Executive Director Todd Johnson of the NJCTA was also happy the SEEF wasn’t increased.
He did not want an increase of more than 10 percent.
Johnson said it would raise the price of cannabis after competition has made it fall after years of high prices.
“I promise it won’t be $60. Maybe 59.99,” Laufer joked at the end of the meeting.
No one argued for it to increase.
HudHaus Fined $15,000
Compliance and Investigations Office Director David Tuason noted HudHaus dispensary of North Bergen had a few violations.
Laufer explained they displayed paraphernalia viewable from the outside, which is a $5,000 fine.
They also advertised without reliable evidence that the audience was 21 and over, which is a $5,000 fine.
(Heady NJ has the data to prove the majority of readers are 21 and older.)
They also failed to maintain advertising compliance records, which is a $5,000 fine.
So, they were fined $15,000, which the NJCRC approved.
Voltaire Fined $85,000 for 14 Violations
Laufer explained that Voltaire dispensary was fined for:
- Failure to distribute cannabis items properly, which was duplicative, so no fine.
- Failure to sell cannabis items directly to a consumer, which is a $7,500 fine.
- Failure to ensure completion of 8 hours of annual training for a worker, which is a $10,000 fine.
- Failure to provide role-specific training on specific subjects, which is a $10,000 fine.
- Failure to maintain required training documents and signed records, which is a $5,000 fine.
- Failure to properly use an inventory tracking system and ID tags, which is a $5,000 fine.
- Failure to maintain complete and accurate records of cannabis sales, which is a $5,000 fine.
- Failure to notify the Commission within 3 hours of discovering reportable inventory discrepancies, which was a $7,500 fine.
- Failed to update product inventory daily, which was a $5,000 fine.
- Failed to conduct required monthly inventory audits, which is a $5,000 fine.
- Failed to limit storage area access to authorized personnel, which is a $7,500 fine.
- Failure to restrict cannabis storage areas to authorized personnel, which is a $7,500 fine.
- Permitted an employee to work before registration and issued an ID card, which is a $10,000 fine.
- Permitted to work before ID card was issued, which came with no fine.
So, the 14 violations totaled $85,000 in fines.
The NJCRC approved it 5-0.
Frosted Nug at Carney’s Point $5,000 Fine
According to Laufer, Frosted Nug at Carney’s Point dispensary conducted business at the unauthorized location of the next-door High Grounds Lounge Coffehouse, where orders were placed via a kiosk, which was a $5,000 fine.
The NJCRC approved it 5-0.
