NJ’s marijuana bill: what you need to know

Gov. Phil Murphy and the Democrat-controlled state Legislature have put together a bill to legalize, tax and regulate adult-use recreational marijuana.

Senate Bill 2703, formally called the New Jersey Cannabis Regulatory and Expungement Aid Modernization Act, legalizes possession of up to one ounce of marijuana by adults over 21 years of age.

The task to push it through the statehouse lies ahead; which they plan to do in committee on March 18 and in both the Assembly and Senate chambers on March 25.

Murphy vowed to initially sign a bill within his first 100 days in office legalizing marijuana, but the date was continually pushed back as lawmakers butted heads about the tax rate.

Now comes the issue of drumming up support: Assembly Speaker Craig Coughlin, D-19th District, is short three votes of the 41 needed to pass the Assembly and Senate President Stephen Sweeney, D-3rd District, is short six votes of the 21 needed to pass the Senate.

The most recent version of S2703 is dated March 13, NJBIZ scrutinized its 149 pages and found:

Business types

The legislation calls for several types of cannabis establishments: retailers, wholesale distributors, growers and cultivators, and processors and manufacturers.

Tax rates

Marijuana would be taxed at a flat rate of $42 an ounce. Municipalities would have the option to levy their own tax rates on marijuana commerce.

Municipalities with a cultivator or manufacturer within their borders can impose a tax rate of up to two percent on the product. Towns with a wholesaler can impose a rate of up to one percent of the product and municipalities with a retailer can impose a tax rate of up to three percent on the product.

Who can sell it?

The legislation does not specify how many retail licenses will be issued. Instead, the total will be determined later, based on population.

A set number of retail licenses would go to businesses owned by women, veterans, people of color and those living in “impact zones,” which have faced higher concentrations of drug-related law enforcement activity.

Where can you use it?

Apartment owners have the option to restrict or ban marijuana on their premises. Hotel and motel owners can designate up to 20 percent of their guest rooms as cannabis-friendly.

Licensed retail locations for medical and recreational marijuana can set up cannabis-use lounges, similar to a bar, which would be on the same property as the store but in a separate building.

Delivery

Legislation calls for cannabis delivery services, akin to pizza or Chinese food delivery. Drivers would have to be at least 18 years old, their cars would have to be outfitted with a lockbox and a GPS, and could not include any markings indicating they are a cannabis delivery vehicle.

What options do towns have?

Towns and cities can ban any marijuana business. Ordinances municipalities passed prior to the bill’s enactment date to prohibit marijuana business would be struck down. Those towns would have roughly six months from the bill’s enactment to enact a new ordinance.

But, towns cannot bar a person from going elsewhere to purchase marijuana and smoking it privately in their own home.

Employer protections

Employers cannot factor someone’s usage of marijuana when making hiring or firing decisions — such as when an employee tests positive in a drug test for marijuana.

Businesses still have the right to maintain a “drug and alcohol-free workplace,” and they can still prohibit employees from bringing marijuana to work.

As part of an expungement provision, employers cannot consider criminal charges, arrests or convictions related to distribution or possession, when determining whether to hire a candidate or fire an employee.

Regulation

Regulation and oversight of the marijuana industry will be left up to a powerful five-member Cannabis Regulatory Commission, which will handle matters such as licensing and investigating violations.

Murphy would pick three seats, including the chair, without requiring Senate approval. Once members’ initial four-year terms finish, they would have to go through the regular Senate confirmation process.

Sweeney and Coughlin would each have one pick on the commission.

The governor will also be able to pick an executive director, whose salary would be capped at $125,000, and who would oversee the enforcement staff.

Those staff would wield considerable authority to ensure every marijuana facility in the state is complying with cannabis regulations. They would have control over all the state’s marijuana and could “seize, possess and dispose of cannabis items” to ensure regulations are followed.

The commission has six months to put together and adopt regulations.

Expungement

S2703 lays out an expungement process for convictions of low-level distribution and possession.

Any such person will have to make that request in person. Until the expungement goes through, applicants would have a so-called “virtual expungement,” whereby their conviction, arrest or charges for low-level marijuana offenses could not be used against them when seeking housing, employment or education.

Still, the legislation urges the state judiciary, which oversees New Jersey’s courts, to establish an electronic, online system by which people can request their records’ expungement.

Murphy has made what he called the “social justice component” of marijuana legalization one of his key concerns about the legislation, saying whatever bill he signs needs to address those issues.

New Jersey would be the second state, behind Vermont, to legalize marijuana through legislation. Other states, such as Colorado, have done it through a voter ballot question, which state lawmakers here have vowed to avoid.

An earlier version of this story included information from a previous version of Senate Bill 2703 regarding the number of allowed retail licenses, it has since been updated to reflect the March 13 version of the legislation.