How Businesses Can Prepare for Cannabis in 2020

How Businesses Can Prepare for Cannabis in 2020

As you know, there have been several failed attempts to pass a recreational marijuana law through legislation in New Jersey. Now, voters will be able to decide for themselves when they visit the polls in November of this year. In December 2019, the New Jersey legislature approved a referendum to place the question of whether to legalize adult-use marijuana on the state’s 2020 general election ballot.

So, as a business entrepreneur, how can you prepare for the 2020 New Jersey Marijuana Referendum?

First, What Happens if the Measure Passes?

New Jersey will become the 12th state to legalize marijuana, taking effect on January 1, 2021. That being said, further legislation and regulation will be needed by the legislature and respective administrative bodies. How would the state implement the measure exactly? These details haven’t been finalized yet.

Businesses: What to Consider

If you wish to get in on New Jersey’s recreational market, you should start preparing now for legalization. Here are the expected four different classes of licenses:

1. Grower license
2. Processor license for facilities involved in manufacturing, preparation, and packaging of cannabis items
3. Wholesaler license
4. Retailer license whereby consumers can buy cannabis products

Previous versions of the legislation have included Marijuana Consumption Areas (which are basically on-site consumption lounges). At first, licenses will be capped at a fixed amount, then the Cannabis Regulatory Commission, based on market demand, will determine the maximum number of licenses for each class.

Because the licensing process has been rigorous for those obtaining a medical marijuana license for an Alternative Treatment Center (“ATC”), the expectation for adult-use licenses will be the same.

Polls show most Americans being in favor of marijuana legalization, and New Jersey residents in particular favoring it by 62 percent, according to a recent Monmouth University poll. Businesses and entrepreneurs should get a jump on the application process now to sufficiently prepare for the application process. Assemble a professional team now and consider the following issues:

• Business Formation and Governance
• Zoning and Land Use Issues
• Financial/Tax Planning
• Branding and Intellectual Property Issues

The key is to do your homework so that if and when this measure is approved, you won’t waste time.

What Will the Ballot Question Look Like?

Here’s what the question and interpretive statement will look like on the ballot:

Constitutional Amendment to Legalize Marijuana

• Do you approve amending the Constitution to legalize a controlled form of marijuana called “cannabis?”
• Only adults at least 21 years of age could use cannabis. The state commission created to oversee the state’s medical cannabis program would also oversee the new, personal use cannabis market.
• Cannabis products would be subject to the state sales tax. If authorized by the Legislature, a municipality may pass a local ordinance to charge a local tax on cannabis products.

Interpretive Statement

• This amendment would legalize a controlled form of marijuana called “cannabis.” Only persons at least 21 years of age could use cannabis products legally.
• The Cannabis Regulatory Commission would oversee the new adult cannabis market. This commission was created in 2019 to oversee the state’s medical cannabis program. The scope of the commission’s new authority would be detailed in laws enacted by the Legislature.
• All retail sales of cannabis products in the new adult cannabis market would be subject to the state’s sales tax. If authorized by the Legislature, a municipality may pass a local ordinance to charge a local tax on cannabis products.

Contact Buyweed-NJ

Buyweed-NJ vows to keep you informed about cannabis legalization in New Jersey and throughout the country. Contact us today to ask questions or learn more.