New Jersey Attorney General Gurbir Grewal issued warning letters to NJ cannabis gifting entrepreneurs that claim to offer gifts of cannabis after buying something else.
Letters warned Sky High Munchies, Slumped Kitchen LLC, NJGreenDirect.com LLC, and West Winds Wellness. The AG ordered them to cease and desist unauthorized business practices. In addition, they are under investigation for violating the Consumer Fraud Act.
None of these businesses sought to hide the nature of their business.
The NJ cannabis gifting entrepreneur Sky High Munchies ran ads during a Philadelphia Phillies baseball game.
The letters note the “gifts” they offer consumers seem central to sales transactions and, thus, not a gift.
“In legalizing adult-use cannabis in New Jersey, the Legislature made it clear they were creating a regulated market with restrictions on how that market operates,” said Attorney General Grewal.
“We’re making it clear that we will not permit these entities to undermine the regulated cannabis marketplace the Legislature created. Or to compete unfairly with properly licensed cannabis businesses.”
Making Business Difficult for NJ Cannabis Gifting Entrepreneurs
“The CRC is committed to establishing a safe marketplace of cannabis products,” said CRC Chair Dianna Houenou. “Those trying to preempt the rules and transfer unregulated and untested marijuana items jeopardize public health. And undermine confidence in the forthcoming regulated cannabis industry.”
The CRC has not adopted adult-use cannabis licensing rules for retailers nor issued any licenses.
Under the Consumer Fraud Act, misrepresentation in the sale or advertising of merchandise constitutes a separate violation. Violators may be penalized $10,000 for the first violation and $20,000 for each subsequent violation.
New Jersey wants to argue NJ cannabis gifting entrepreneurs are committing fraud.
“We will not allow vendors to misrepresent what they’re selling,” said Kaitlin Caruso, Acting Director of the Division of Consumer Affairs.
“Under our consumer protection laws, vendors are subject to fines and penalties for making false or misleading statements about what they’re selling. We have warned these companies about our concerns, and to stop conduct that could violate our laws.”
The legacy market has existed for decades.