Compromise Reached To Expand NJ's Medical Marijuana Law

Governor worked with legislative leaders to reach a deal that will eliminate tax, shift oversight and add delivery options

Medical marijuana patients in New Jersey could soon be able to buy more medicinal cannabis and a greater variety of products, spend less time visiting their doctor to obtain permission, and enjoy greater protections at home, school and work under a plan lawmakers approved and the governor is expected to sign in the coming weeks.

The state Senate and Assembly passed the compromise bill Thursday after limited debate over the measure, which had become a point of contention between legislators and Gov. Phil Murphy. While there is widespread public support for medical marijuana, the legislation stalled earlier this year when Democratic leaders tried to tie its passage to the more controversial proposal to legalize adult-use cannabis in New Jersey.

But over the past week, Murphy’s team worked with legislative leaders to reach an agreement on several points of dispute, including a strategy for phasing out the current 6.625 percent sales tax and transferring control of the program from the state Department of Health to an independent commission in the year to come.

“I am glad we have finally come to an agreement, and we will, shortly, be able to provide this medicine to the patients who need it,” said Sen. Joseph Vitale (D-Middlesex), a lead sponsor and chair of the health committee. He thanked advocates, supporters and Sen. Nicholas Scutari (D-Union), who has also led the fight on marijuana legalization.

“The medicinal uses of marijuana have been proven safe for years, and yet, in New Jersey, we have arbitrarily restricted patients’ access since our program’s inception,” Vitale added. The measure (A-20/S-20) passed the Senate 31-5 and cleared the Assembly 22-12 on Thursday.

According to the compromise approved by the Legislature:

  • Tax on medicinal marijuana will drop to 4 percent in July 2020, then 2 percent the following year, and end completely in July 2022. Originally, lawmakers had proposed phasing this out over five years.

  • Oversight of the program will shift from DOH to a newly created five-member Cannabis Regulatory Commission. It will likely take the remainder of the year for the group to be established. Originally, Murphy had urged lawmakers to postpone this shift until 2021.

  • The state will license up to 28 new marijuana-cultivating businesses in the next 18 months, after which the commission can reassess the need and call for more if appropriate. Lawmakers had originally called for 23 new growers, while Murphy urged them to increase this to 36.

  • The commission will also be required to periodically re-evaluate the number of manufacturers and dispensaries “pursuant to need,” and ensure there are options in the northern, central and southern parts of the state.

  • “Consumption lounges” will be permitted in certain situations, and dispensaries can create delivery services using their own employees or hired help; these issues had raised questions for Murphy’s team as originally drafted.

Some changes could be immediate

Other, less controversial elements of the legislation could take effect immediately, including enabling patients to buy up to 3 ounces at a time, instead of the current 2-ounce limit. There would be no limit for individuals with a terminal illness, and edibles would no longer be available just to minors. In addition, patients could obtain a physician’s permission to participate in the program once a year; under the current law, they need to do so every 90 days.

Some lawmakers, including bill sponsor Sen. Declan O’Scanlon (R-Monmouth), had pushed for other changes, like an immediate end to the sales tax. “There are still some issues with it, but there's enough good here for me to be happy,” O’Scanlon said after the vote. “We have arguably the most genuinely clinical medical program in the country.”

That said, Sen. Gerald Cardinale (R-Bergen) tried to convince his colleagues to hold the bill for further amendments — like exempting veterans, seniors and disabled residents from the sales tax — but he was outvoted by the Democratic majority. “We need to do something for those people in terrible need in the state that need this medicine and don’t have the money to afford it in many cases,” Cardinale said.

New Jersey currently has six “vertically integrated” facilities that grow, process and sell medicinal marijuana, and six more similar businesses are in the pipeline, expected to open in the next year. Earlier in June, DOH announced it would seek to permit more than 100 new operations; half of these licenses were destined for dispensaries, two dozen were slated for cultivation, and the remainder were for manufacturers, who process the plant into consumer products.

Those numbers will now be revised downward, according to the administration, with the understanding that the commission will revisit the issue in the coming year, and can grant additional licenses of any kind, if needed. In addition, after 18 months, interested parties can once again seek to create vertically integrated businesses — if they obtain the proper licenses in each category.

Murphy, DOH pushed for expansion

New Jersey’s medical marijuana program was approved in 2010, but took years to take effect under former Gov. Chris Christie, a Republican, who raised concerns about cannabis use. When Murphy took office, roughly 17,000 patients were involved in the program, which was considered among the most restrictive in the nation.

Murphy, a Democrat, and DOH Commissioner Dr. Shereef Elnahal quickly bolstered the effort by expanding the list of “qualifying conditions” that enabled patients to participate, made it easier and less expensive to enroll, and aggressively pitched the clinical benefits to physicians statewide. Since then, the program has expanded to more than 47,500 participants.

Lawmakers proposed other options to grow the program through legislation, including ways to encourage women and minority businesses in the industry, mechanisms to enable nursing-home patients to have access, and a commission to oversee the evolution — many of which are still part of the bill that passed.

But Sen. President Steve Sweeney (D-Gloucester) put those measures on hold in hopes he could use support for medicinal marijuana to leverage votes for the more controversial adult-use legalization plan. When that plan failed — legalization remains stalled — both Murphy and lawmakers sought options to expand access to cannabis through the medical program. However, until this week, they had failed to agree on key details.

The bill approved was renamed earlier this year as the Jake Honig Compassionate Use Medical Cannabis Act, in honor of a 7-year-old Howell boy who died of cancer in January and suffered when he was unable to access sufficient cannabis. It outlines new ownership requirements for medicinal marijuana businesses, calls for an academic medical center to study the drug, and for the development of a cannabis curriculum to help grow the industry, among other things.

In addition, the legislation outlines clear protections for medicinal marijuana patients to guard against discrimination in housing, education, employment, healthcare and child custody disputes. It also states that their status as program participants can’t be used as the only probable cause for searches and other actions by law enforcement.

“We’re a step closer to the governor signing medicinal marijuana legislation into law that will provide patients with access to proven effective treatments,” said Assemblywoman Joann Downey (D-Monmouth), a lead sponsor. “This bill takes the critical step needed to help more residents, and creates a safe infrastructure for medicinal marijuana to grow as a program and business in New Jersey.”

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