The NJ Cannabis Regulatory Commission (CRC) Chair Diana Houenou and Executive Director Jeff Brown were featured on a cannabis panel at the NJ League of Municipalities conference in Atlantic City to guide towns.
The panel was held in a large room that was well-attended by many, with people lining the room.
Clinton Mayor and NJ League of Municipalities President Janice Kovach joked that she lost $20 because they finished interim cannabis regulations on time.
“We’ll be getting into the weeds today,” Houenou jokingly said.
Towns have been little guidance in the process so far. There has been no model ordinance to follow. Thus, many banned sales to wait for guidance. Most towns with cannabis ordinances have only allowed a few license classes to open, and many have them in areas with no foot traffic. Towns will need to issue a letter of support for a license and a Zoning affidavit to businesses applying for cannabis licenses.
Houenou explained the nature of the different types of cannabis licenses one can obtain.
Emphasizing Social Equity
She said Social Equity applicants “embody the essence of equity in establishing the cannabis industry,” which they seek to promote.
One qualifies to be a Social Equity applicant by having been convicted of a cannabis-related crime along with residency and income thresholds.
It’s “not the felony bar as termed by NJWeedman,” Brown joked.
Houenou noted they announced the Notice of Acceptance of cannabis license applications of December 15th for cultivation and manufacturing license and testing labs.
Market Issues
She noted property control had been a barrier to a number of those seeking to open a cannabis business. Reluctant landlords, along with restrictions make it difficult to apply for a license.
Houenou said they tried to “lessen the burden as much as we could”
Executive Director Jeff Brown noted there are rolling applications which so there’s no deadline to apply for a license.
“There is no limit on licenses yet,” he said. “The goal, for now, is to let the market develop.”
“It will be light years ahead of what we had at the DOH,” Brown added regarding the application process. “We want this to be a better experience for applicants and regulators as well.”
He noted the vendor hired to help review cannabis licenses helped create Oklahoma’s expansive medical cannabis market.
Brown said they wanted a high level of transparency to ensure the finances of cannabis license applicants are not geared toward obscuring ownership to exceed license caps. He said they do not want people applying for the prioritizing licenses that don’t qualify.
Cannabis Guidance for Towns at the NJ League of Municipalities
“Simplicity supports equity,” Brown said regarding the ordinance process. He noted some towns are creating their own mini CRCs to handle the process. Brown said this was not necessary.
“Think of it like alcohol,” he said.
Brown said cannabis is similarly a consumer-packaged good whose inventory is maintained.
Brown noted towns could fix the hours of business and enact two percent wholesale sales. He said the average price of cannabis on the wholesale market is $3,000 per pound.
Brown said towns can set up local equity programs, noting there was an incubator created in Detroit, MI, and Oakland, CA.
Bob Zuckerman, who said he was the equivalent of a Councilman in South Orange, said they are struggling to create an ordinance that encourages Social Equity applicants. Like several other towns, South Orange established a temporary ban to finish the details of their ordinance.
Brown said they will carry out regular inspections to ensure compliance. There will be financial penalties for those found not in compliance.
Houenou pointed to the CRC’s regulations and low application fees and said towns should follow suit.
“We encourage municipalities to really think how their local systems can affect equity,” Houenou said, noting the lowest fee is $100 to apply.
She said they want to “make the industry open and accessible to everyone.
Adult-use dispensary applications will be accepted starting March 15, 2022.
Regulations concerning the other licenses consumption lounge regulations are forthcoming too.
League of Municipalities Questions
A lady who said she represented the Tenafly Chamber of Commerce said they were eager to attract a boutique-type shop to an area with foot traffic.
Brown said most dispensaries are boutique-like.
She said the Tenafly City Council is skittish and doesn’t want “a skid row pot shop.
Kovach said they should reach out to the League and offered tours of dispensaries to officials.
“It was an eye-opening experience for most of these people,” she said.
“Towns shouldn’t do guesswork,” Houenou said.
Towns have a lot of autonomy in New Jersey.
Regulating Cannabis
A Pemberton Councilwoman asked what power towns had to penalize dispensaries that sell to minors.
Brown said towns can enact a process similar to the one for dealing with liquor stores like this. He noted that the CRC has its own penalties for such a transgression.
A councilman from West Milford asked what the CRC thought of those selling cannabis by saying it’s a gift.
Houenou sighed, and the room laughed.
She said they don’t have permission from the CRC to operate.
“This gray market… is tough,” she said. “I would have to defer to other law enforcement.”
The Councilman persisted and asked if there was “nothing we can do about it?”
Brown suspected criminal activity referred to them will be directed towards the appropriate agency.
“I’d like someone to take ownership of that,” the Councilman said
Brown said New Jersey doesn’t have a gifting loophole.
They did not address the fact that the New Jersey Constitution was amended last year by a referendum that said adult-use cannabis sales started January 1, 2021.
The CRC is holding a webinar on November 30th to provide more guidance on the license application process.
