Bill > S2703

Introduced Session

This bill would legalize the possession and personal use of marijuana, in regulated quantity, for persons 21 years of age and over. The bill creates a Division of Marijuana Enforcement and establishes a licensing structure. The bill also provides for a tax levied upon marijuana sold or otherwise transferred by a marijuana cultivation facility to a marijuana product manufacturing facility or to a retail marijuana store. This bill would be known as the "New Jersey Marijuana Legalization Act." This bill provides for the following categories of licenses: Class 1 Marijuana Grower, a Class 2 Marijuana Processor, a Class 3 Marijuana Wholesaler, or a Class 4 Marijuana Retailer. Section 4 of bill provides for personal use of marijuana for persons 21 years of age or older. This section provides that a person may possess, use, purchase, or transport: marijuana paraphernalia; one ounce or less of marijuana; 16 ounces or less of marijuana infused product in solid form; 72 ounces or less in liquid form; 7 grams or less of marijuana concentrate; and up to 6 immature marijuana plants. This section provides that a person may transfer of one ounce or less of marijuana; 16 ounces or less of marijuana infused product in solid form; 72 ounces or less in liquid form; 7 grams or less of marijuana concentrate; and up to 6 immature plants, without marijuana cultivation facility to a person who is of or over the legal age for purchasing marijuana items, provided that such transfer is for non-promotional, non-business purposes. The section also provides that a person cannot consume or smoke marijuana items openly in a public place, except as may be permitted in consumption areas. Section 5 concerns the lawful operation of marijuana establishments. Section 6 establishes penalties for any licensee or employee or agent of any licensee who sells, offers for sale, distributes for commercial purpose to a person under the age of 21. The prohibited act constitutes a disorderly persons offense. Additionally, a fine or a civil penalty may be imposed. A disorderly persons offense is punishable by up to six months imprisonment, a fine of up to $1,000, or both. It shall be unlawful for a person under the age of 21 to attempt to purchase, or acquire a marijuana item, even if such marijuana items may be legally purchased by persons at or above the legal age for purchasing marijuana items. Section 7 establishes the new Division of Marijuana Enforcement in the Department of Treasury. Sections 8 concerns the powers and duties of the newly created Division of Marijuana Enforcement. Section 9 provides for the division to adopt rules and regulations necessary for implementation of the bill. The bill would require regulations to include the following: procedures for the application, issuance, denial, renewal, suspension, and revocation of a license to operate a marijuana establishment; license application fees; licensing goals; security requirements for marijuana establishments; requirements to prevent the sale or diversion of marijuana and marijuana products to underage persons; labeling and packaging requirements; health and safety regulations and standards for the manufacture and sale of marijuana products; advertisement restrictions; record keeping requirements; and civil penalties for the failure to comply with the regulations. Section 10 mandates that the division develop a system for tracking the transfer of marijuana items between licensed premises. Section 11 establishes a tax levied upon marijuana sold or otherwise transferred by a marijuana cultivation facility to a marijuana product manufacturing facility or to a retail marijuana store. That tax shall include the prevailing sales tax. To encourage early participation in and development of marijuana establishments and to undermine the illegal market, the bill proposes an escalating tax rate as follows: in one year following enactment of the bill, the excise tax shall be 10 percent; 15 percent in year two; 20% in year three; and 25% in year four and beyond. These excise taxes set forth in this subsection shall include the prevailing sales tax. The Department of the Treasury would establish procedures for the collection of all taxes levied. The tax revenue into the new fund but one percent shall be allocated annually to the local governmental entity where the marijuana establishment is located to be dedicated to drug prevention and treatment. The bill specifies that no tax would be levied upon marijuana intended for sale at medical marijuana centers pursuant to the "New Jersey Compassionate Use Medical Marijuana Act," P.L.2009, c.307 (C.24:6I-1 et seq.). Section 12 provides for local governmental entity regulations or ordinances. The bill provides that each local governmental entity may enact an ordinance or regulation governing the time, place or manner and number of marijuana establishment operations and provides for civil penalties violating those ordinances. The local governmental entity may enact ordinances or regulations, not in conflict with the provisions of the bill. The bill provides that a local governmental entity may prohibit the operation of marijuana cultivation facilities, marijuana product manufacturing facilities, marijuana testing facilities, or retail marijuana stores through the enactment of an ordinance. Under the bill, the failure of a local governmental entity to enact an ordinance prohibiting the operation of a marijuana establishment within 180 days following the effective date of the bill shall thereby permit the operation of a marijuana retail establishment within the local governmental entity for a period of five years, at the end of which five year period, and every five year period thereafter, the local governmental entity shall again be permitted to prohibit the operation of a marijuana establishment. Section 13 establishes the license application process. Under the bill, each application for an annual license to operate a marijuana establishment would be submitted to the division. A separate license shall be required for each location at which a marijuana establishment seeks to operate. Renewal applications may be filed up to 90 days prior to the expiration of the establishment's license. The division is to begin accepting applications 30 days after the regulations are implemented. Sections 14 through 18 establish the different classes of licenses, requirements to obtain licenses, and plant grow size regulations. The licenses are enumerated as follows: Class 1 Marijuana Grower license for the premises at which the marijuana is grown or cultivated. (Section 14) Class 2 Marijuana Processor license for the premises at which the marijuana is processed. (Section 16) Class 3 Marijuana Wholesaler license for the premises at which the marijuana is warehoused.(Section 17) Class 4 Marijuana Retailer license for the premises at which the marijuana is retailed. (Section 18) All prospective licensees shall complete application requirements, meet residency requirements, and undergo a criminal history record background check. Section 15 regulates plant grow size. Section 19 concerns the regulation of marijuana handlers who perform work for a licensee. Section 20 addresses marketplace regulation and essentially bars an owner, officer or other person interested in a marijuana cultivation facility, marijuana testing facility, product manufacturing facility, or a wholesaler of marijuana to be involved in retailing marijuana. The section further bars a retailer of marijuana from being a shareholder, officer or director of a company or association concerned with marijuana cultivation, testing product manufacturing or marijuana wholesale. Section 21 provides nothing in the bill is intended to: require an employer to permit or accommodate marijuana in the workplace; allow driving under the influence of marijuana; permit marijuana in a school, hospital or correctional facility. Section 22 provides that a currently operating medical marijuana facility licensed under the "New Jersey Compassionate Use Medical Marijuana Act," P.L.2009, c.307 (C.24:6I-1 et seq.), operating in good standing can immediately apply for a license to operate to distribute marijuana to a person who is not a medical marijuana patient. Section 23 provides that an entity licensed under the "New Jersey Compassionate Use Medical Marijuana Act," P.L.2009, c.307 (C.24:6I-1 et seq.) shall certify to the Department of Health, at intervals established by the division, sufficient quantities of approved medical marijuana to service medical clients, before personal use marijuana can be sold. Such facilities shall further maintain separate areas for medical and personal use customers. Section 24 permits a person convicted of marijuana possession as defined in paragraph (4) of subsection a. of N.J.S.2C:35-10 (possession of 50 grams or less of marijuana, or five grams or less of hashish) to present an application for expungement to the Superior Court. Section 25 concerns limitations as may be related to federal law. Section 27 provides for the personal use of cannabis resin. Section 35 establishes consumer protections barring marijuana related arrest, prosecution, or penalty for conduct permitted under the bill. Section 36 addresses law enforcement agencies obligation under federal law. Section 37 concerns contract enforcement and bars unenforceability on the grounds that the conduct is prohibited by federal law. Section 38 concerns criminal investigations and establishes that certain conduct shall not constitute "articulable suspicion," including the odor of marijuana or burnt marijuana, the possession of or the suspicion of possession of marijuana without evidence of quantity in excess of one ounce, and the possession of marijuana without evidence of quantity in excess of one ounce in proximity to any amount of cash or currency. Section 39 creates the "Marijuana Control and Regulation Fund." All fees, penalties and tax revenues collected by the director shall be forwarded to the fund. Monies in the fund will be used exclusively for the operation of the Division of Marijuana Enforcement and for reimbursement of all additional costs of enforcement. Section 40 establishes a Marijuana Regulation Review Commission which shall be responsible to review and approve regulations developed by the division. The commission shall consist of three members as follows: one member appointed by the Governor, who shall be the presiding officer, one member appointed by the President of the Senate, who shall be a member of the Senate, and one member appointed by the Speaker of the General Assembly, who shall be a member of the General Assembly. The concurrence of two of the members of the commission shall be necessary to validate all acts of the commission. Section 41 permits possession of up to an ounce of marijuana punishable by a civil violation during the period of enactment until legalization becomes effective. Section 42 permits the establishment of retail marijuana consumption area. The division may issue a retail marijuana consumption area endorsement only to a marijuana retail licensee to sell retail marijuana, retail concentrate, or retail marijuana products for on-premises consumption. Applications for an endorsement would be made to the division. The endorsement is conditioned upon approval by a local governmental entity. An applicant is prohibited from operating a retail marijuana consumption area without State and local licensing authority. A retail marijuana consumption area would be subject to the provisions of P.L.2005, c.383 (C.26:3D-55 et al.) the "New Jersey Smoke-Free Air Act." The bill would also amend sections 3 and 5 of P.L.2005, c.383 (C.26:3D-55 et al.) the "New Jersey Smoke-Free Air Act" to include a definition of retail marijuana consumption area that is specific about the ventilation and separation of this area from the retail store. As so defined, this area would be exempt from the provisions of the "New Jersey Smoke-Free Air Act." Section 45 establishes the socioeconomic factors for a priority system for awarding retail marijuana licenses (impact zones). The bill also amends several sections of Title 2C of New Jersey Statutes, the criminal code, to reflect the decriminalization of marijuana under the bill. This bill provides an effective date as follows: a. sections 1 through 40, and sections 42 through 45 shall take effect 180 days after enactment, except the Director of the Division of Marijuana Enforcement may take such anticipatory action as may be necessary to effectuate the provisions of this act; and b. section 41 shall take effect immediately, but shall expire 180 days after enactment.

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Nick Scutari (D)*,  Stephen Sweeney (D)*, 

Reported from Senate Committee as a Substitute, 2nd Reading (on 03/18/2019)