Rise of the tristate market

Happy mid-summer day, everyone!

We’re less than a week away from our third-consecutive summer business networking event down the shore on July 20. We’ve moved to the beautiful Wave Resort in Long Branch, and if the CRC, NJEDA or NJBAC mean anything to you, you should be there.

This week we confirmed our final speaker in Genna Jones from the N.J. Economic Development Agency, which is getting the word out on how to apply for the seed equity grant and technical assistance. We’ve also added a few more vendors. A big thanks to our presenting sponsor CannaRemedies NJ, our founding sponsor Hance Construction and all our supporting sponsors. Read more in Events.

Elsewhere, Jelani Gibson compares Pennsylvania’s proposed legalization bill to ours and Prof. Rob Mejia offers four hot topics to chew on this summer. There’s more.

The CRC meeting is at 11 a.m. on Tuesday. We’ll be talking about it at our event on Thursday.

See you there!

— Enrique Lavín, publisher and editor

Pennsylvania unveiled a bipartisan bill this month as the state gets its legalization effort off of the ground in the wake of New Jersey and New York standing up their legal weed markets.

The bill, introduced by Pennsylvania state Sens. Dan Laughlin (R-49) and Sharif Street (D-3), has its fair share of similarities from the Garden State and its counterpart across the Hudson.

In a joint press release, Laughlin emphasized the economic benefits and Street spoke of the social equity implications.

“Legalized adult use of marijuana is supported by an overwhelming majority of Pennsylvanians and this legislation accomplishes that while also ensuring safety and social equity,” Laughlin said. “With neighboring states New Jersey and New York implementing adult use, we have a duty to Pennsylvania taxpayers to legalize adult-use marijuana to avoid losing out on hundreds of millions of dollars of new tax revenue and thousands of new jobs.”

“We have a unique and singular opportunity to correct decades of mass incarceration, disproportionate enforcement against marginalized communities, the criminalization of personal choice and the perpetuation of violence, which all materialized from the failed war on drugs,” Street said. “Legalizing the adult use of cannabis will help us fully and equitably fund education, lower property taxes, and address a variety of community needs throughout Pennsylvania.”

Here are some key components of the bill and some of the larger questions the state may have to navigate. We’ve pulled certain bullet points from the press release to compare and contrast:

Most legalization bills provide some sort of mandate for underage deterrence, similar to what New Jersey and New York have.

Adjudicating driving under the influence has been a hot topic in the industry. Currently there’s no test for real time impairment. Additionally cannabis can stay in one’s system for weeks and in some cases months.

Some states have established cutoff amounts based on blood tests which have a smaller detection window, but some scientists have questioned whether the presence of THC in blood proves impairment that is too much to operate a motor vehicle.

There’s currently a case playing out in New Jersey that questions the constitutionality of how law enforcement currently measures drug impairment with what’s known as Drug Recognition Experts. The case, brought by the Public Defender’s Office, claimed the protocol police currently use lacks grounding in scientific validity.

The part about the illicit market is bound to raise some eyebrows. Are they talking about all unlicensed dealers or smoke shops and others that will pop up after the law is passed? The CRC has taken a hands-off approach since enforcement is left up to municipalities. The law here seems to be more of a joint effort between the cannabis board, law enforcement and the local attorney general’s office.

This is something the CRC and the rest of the state is still working out with the Workplace Impairment Recognition Experts. The factor here is that whatever that protocol is — it’s going to have to stand up to similar scrutiny as the DREs in terms of scientific validity.

Medical licenses in New Jersey got the first shot. The language in this bill also alludes to medical operators being able to expand.

An economic equity applicant is an applicant that was affected by the War on Drugs, but the qualifications could vary.

Moreover, it expunges non-violent marijuana convictions for medical marijuana patients, which has also been championed in a bipartisan fashion, and goes further to expunge all non-violent marijuana convictions.

As we covered in the last issue though, automatic expungements have run into their fair share of problems in other states, including New Jersey, due to technical issues, staffing and an inability for multiple records systems to communicate with each other. It’ll be interesting to see if Pennsylvania runs into the same problems.

This has got to be the most painful comparison for New Jerseyans. To see a next door neighbor legalize homegrow while it still remains illegal in the Garden State (but no gardening of cannabis apparently). As more and more states legalize homegrow, something to monitor will be whether or not more political pressure is put on Senate President Nicholas Scutari to move from his position on not doing homegrow.

Legislation can always change when it reaches final implementation and can always be subject to changes down the road, but the legislation certainly contains elements of New Jersey and New York legalization law. As legalization continues, more states may be likely to continue the trend. The secondary question is which states will be willing to amend or update their legislation as more innovative trends and new problems arise as the market plays out.

— Jelani Gibson

Reps. Earl Blumenauer (D-OR) and Barbara Lee (D-CA) released a joint statement after the Republican-controlled House Armed Services Committee blocked cannabis amendments from the National Defense Authorization Act.

The NDAA also had amendments added by the Republican controlled House that included restrictions on abortion care for servicemembers and gender-affirming care, setting up the bill for a larger standoff in the U.S. Senate where Democrats hold a slim majority.

Some of the shot-down amendments out the Armed Services Committee from Blumenauer and Lee included medical weed for veterans and not having cannabis use used as a disqualifying factor to join the military.

Currently cannabis use isn’t an automatic grounds for rejection and can come at the discretion of military recruiters and their superiors to issue a waiver.

Traditionally waivers can also differ by geographic area and branch of service. The suggested amendments would do away with the need for such a process.

“From ensuring our veterans have equal access to state-legal medical marijuana programs to preventing past cannabis use from disqualifying applicants to enlist in the military, our amendments gave the opportunity for Congress to come together across party lines and make progress for communities impacted by the failed war on drugs,” the statements from the co-chairs read in a press release.

“At a time when we are facing serious recruitment and retention challenges, it is a travesty that the Republican majority refuses to address the military’s archaic drug policies, which drive qualified people out of the armed services or prevent them from enlisting in the first place.”

The amendments out of the committee were similar to a batch that failed to pass last year as well.

Blumenauer and Lee also noted that medical weed should be a priority for veterans. While some states and individual stores offer discounts to veterans, the Department of Veteran Affairs, the primary healthcare provider for veterans, does not recognize cannabis as a form of medicine; in large part because it is a federal agency.

The stance comes even as efforts to research psychedelics such as MDMA and psilocybin are underway at the agency after a decades long stop in research.

“Likewise, we cannot begin to deal with health care for our servicemembers and veterans without allowing equal access to medical marijuana that Americans in most states now can utilize,” Lee and Blumenauer said. “Our armed services, veterans, and the American people deserve better.”

— Jelani Gibson

The New Jersey Cannabis Regulatory Commission meets Tuesday, July 18 at 11 a.m. in Atlantic City this month. And we should expect several more businesses to be awarded their annual licenses. We know a handful of dispensaries are opening up this summer, but the road they’ve taken may look significantly different for those behind them.

While perennial issues such as finding appropriate cannabis real estate and raising capital continue to occupy a prominent space, some emerging issues are gaining attention. Right now, the spotlight is focused on the following issues:

Here is my take on each issue based on conversations, research, and by reviewing other states’ cannabis markets.

Outdoor cultivation

A recent New Jersey Senate Judiciary Committee hearing focused on the slow rollout and pricing issues in our industry. There is concern that we have fewer than 40 dispensaries in operation and our cannabis continues to be the priciest in the nation.

One way to partially solve this is via outdoor cultivation. Not only is it more environmentally friendly but CRC Executive Director Jeff Brown told the senators, “If there was outdoor cultivation in New Jersey, the price would drop by prob 50% — as soon as those cultivators come online. Unfortunately, all cultivation in New Jersey now is indoors. When I talk to patients — they do want sun and soil-grown cannabis.”

But this message is not resonating on the local level as concerns about odor and even outdoor theft stifle efforts in places like Galloway, Bridgeton, and Blairstown. More guidance and lobbying by the CRC could move this issue forward.

Verify the Union you work with

There is no doubt that the New Jersey cannabis business supports unions. But recently there have been reports some opportunistic unions are trying to gain New Jersey clients without the experience and expertise to protect cannabis workers. When engaging with a union look to those who have been part of the state’s cannabis industry from the beginning. Research membership numbers, services provided, and any lawsuits that have been leveled. As with any part of the cannabis industry there are some suspect operators, so buyer beware.

Potential retail ownership deals to expand from 5% to 35%

New Jersey Assembly Bill A4151 recently passed both chambers, and would allow for individuals — including current licensees — to have up to a 35% equity stake in up to seven (diversely owned) separate Class 5 (retail/dispensary) licenses. Diversely owned licenses include those owned by certified minority-owned, women-owned, and disabled-veteran businesses.

Prior to this bill, the CRC specified an entity that possessed 5% of more equity in a cannabis license could not have ownership in any other cannabis license. It also prohibited the ownership of more than one Class 5 license.

The bill is expected to be signed soon by Governor Murphy. The main takeaway is that the 35% equity holder could offer loans and license intellectual property (aka brands) to their partners. Let’s hope this accelerates the development of the New Jersey cannabis industry without encouraging predatory practices.

Rescheduling, descheduling, or non-starter?

By the end of this year, we are expected to hear whether cannabis will be moved from classification as a Schedule 1 substance (high potential for abuse, no medical applicability) to Schedule 2, 3, 4 or 5 or even a Descheduled status. Each of these moves has cannabis business implications, which will be outlined in a future column. But make no mistake that any move will alter the way we do business now.

Other emerging issues will be covered in future columns. But for now, you are in the know.

— Rob Mejia, a regular contributor to NJ Cannabis Insider, is a teaching specialist at Stockton University. Reach out to him at [email protected]

The city’s first cannabis business — a medicinal dispensary — opened its doors this week at 220 Broadway, in an industrial area in the shadow of the Pulaski Skyway.

Tuesday’s soft opening of RIPT Dispensary marks the first legal cannabis establishment of any kind in the state’s second-largest city. It’s also just the second medical marijuana store in Hudson County.

“Jersey City’s an amazing city,” said RIPT co-founder Jonathan Bednarsh, 49, from Rumson. “After traveling all over the state, we realized this is where we wanted to be and where we can have a meaningful impact.”

Bednarsh, who began the venture back in 2019, said that he and his partner wanted to build a store where not only the company would grow, but also the community its located in. He touted it as being far from any schools and in area where the city’s industrial roots lie.

The store’s soft opening is meant to fine-tune their systems and operating procedures, and the business plans to have a ribbon-cutting ceremony with Mayor Steve Fulop Friday, Bednarsh said.

RIPT is also applying for permission for recreational sales; Jersey City currently does not have any recreational cannabis dispensaries open.

Despite being medical-only in a time where the number of medical cannabis patients are dwindling after statewide adult-use sales began, Bednarsh called it a “big achievement” for RIPT to be the first legal marijuana store in Jersey City.

“We’re independently owned and operated,” he said “What we’ve done (for our space) is to try to reflect this whole industrial area that we’re in and bring it into the actual facility. so that you know where you are, and you’re in Jersey City.”

— Mark Koosau | The Jersey Journal

This article was an NJ.com subscriber exclusive from The Jersey Journal. NJCI subscribers get it for free.

CRC Chairwoman Dianna Houneou will be among the featured speakers at NJ Cannabis Insider’s summer business networking event from 6-10 p.m. on July 20 at the beautiful Wave Resort Long Branch. Doors open at 5:30 p.m. Reserve tickets here. Use code NJCISUB for your discount.

Presented by CannaRemedies NJ, the business meetup will also include an informal discussion about what regulators look for in license applications and a primer on the new license classes becoming available in September: Wholesale, Distribution and Delivery.

Joining Houenou during the hour-long speaker program will be:

The networking session starts shortly after 7 p.m. immediately after the speakers are done. The price of ticket includes happy hour eats and two drinks. Garage and metered parking is nearby.

In addition to CannaRemediesNJ, a women-led and operated soon-to-open retail dispensary in Ewing, the event is supported by these sponsors and vendors:

There’s room for two more vendors on our networking floor. Contact Enrique Lavín or Heather Long.

For cannabis recruitment solutions please contact Deneen Wright, [email protected] or call 201-324-5092.

Publisher & editor : Enrique Lavín, [email protected]

Events manager : Kristen Ligas, [email protected]

Event sponsorship sales : Heather Long, [email protected]

Events producer : Niyala Shaw, [email protected]

Technical support: [email protected]

Subscriptions: [email protected]

Jelani Gibson is the lead reporter for Cannabis Insider. He previously covered gun violence for the Kansas City Star.

Susan K. Livio is a Statehouse reporter for The Star-Ledger and NJ.com who covers health, social policy and politics