On July 2, 2019, Governor Phil Murphy signed the Jake Honig Compassionate Use Medical Cannabis Act into law. This law amended the New Jersey Compassionate Use Medical Marijuana Act, N.J.S.A. 24:6i-2 et seq., which is now known as the Jake Honig Compassionate Use Medical Cannabis Act (CUMCA).

The amendments to CUMCA create new opportunities for applicants to apply to operate an alternative treatment center (ATC). Previously, New Jersey law only permitted applicants to apply for vertically integrated licenses. Under CUMCA, the permit process includes three different permit types, and three categories of permits. The new permit types are medical cannabis cultivator, dispensary and manufacturer permits, and are to be applied for individually. The vertically integrated ATC will continue to be able to cultivate, manufacture and dispense. The categories of permits are traditional, conditional and microbusiness permits.

An applicant would apply for a permit to operate an ATC and simultaneously apply for a permit endorsement authorizing the ATC to cultivate, manufacture or dispense usable marijuana.

Should an applicant be selected to operate an ATC, the applicant will be deemed to hold the permit only for the activity it was authorized to conduct (cultivate, manufacture or dispense), and a vertically integrated ATC will be deemed to concurrently hold a medical cannabis cultivator, manufacturer and dispensary permit.

At the time that an applicant applies for a permit, it will be able to select the appropriate application for a traditional, conditional or a microbusiness permit.

The Conditional Permit

A conditional permit allows local (at least one significantly involved person in the organization applying for the permit has to have resided in New Jersey for at least two years as of the date of the application), non-experienced and not significantly capitalized applicants entry into the cannabis market. It provides groups with less capital, and who cannot immediately demonstrate that they meet all the requirements of the application, a period of 120 days after submission of their application to satisfy the requirements of the application, such as to obtain financing, secure property, or establish site security. It should be noted that at least one-third of the total permits issued for each type of permit endorsement will be conditional permits.

The Traditional Permit

An applicant applying for a traditional permit needs to satisfy all of the requirements of the application upon submission and does not require a New Jersey resident to be significantly involved.

The Microbusiness Permit

A microbusiness requires 100% of the ownership interest to be held by current New Jersey residents who have resided in New Jersey for at least the past two consecutive years, and at least 51% of the owners, directors, officers,or employees of the microbusiness be residents of the municipality (or a bordering municipality) in which the microbusiness will be located. At least 10% of the total permits issued for each type of permit are designated for and only issued to microbusinesses, and at least 25% of the total permits issued will be issued to microbusinesses.

CUMCA also creates the Cannabis Regulatory Commission (CRC) to be the new governing body of the medical marijuana program. Until such time as the CRC is appointed, the New Jersey Department of Health (DOH) will retain the authority. Pursuant to N.J.S.A. 24:6I-24(b)-(c), the CRC will consist of a five-member panel appointed by the governor, with one member upon the recommendation by the Senate President, one member upon the recommendation of the Speaker of the General Assembly, and three members (including the chair) without any recommendation. A vice chair is to be elected by majority vote (including the Senate President's recommended commission member or the Speaker's recommended commission member) at the first meeting called by the chair.

The CRC (or the DOH if the CRC is not in place) will, for each request for application, determine the number of permits and permit endorsements to be issued in a manner that ensures adequate patient access to medicinal marijuana in each region of New Jersey.

As of the date of this article, no nominees of the CRC have been publicly identified by the Governor, Senate President or the Speaker of the General Assembly; therefore, as indicated above, the DOH remains the governing body.

CUMCA also provides that the governing body will begin accepting and processing applications for new medical cannabis cultivators, manufacturers and dispensaries no later than 90 days after the effective date of CUMCA, which is Sept. 30, 2019, or upon adoption of the rules and regulations by the CRC, whichever occurs later. N.J.S.A. 24:6I-16(c) requires that the CRC promulgate rules and regulations to effectuate its purpose by Dec. 29, 2019 (180 days after the effective date of CUMCA). As such, we anticipate that there would be a new request for applications prior to Dec. 29, 2019.

For more information on any of these permits, or the overall application process, refer to the governing statute and regulation, which can be found at N.J.S.A. 24:6I-1 et seq. and N.J.A.C. 8:64-1 et seq.

Michael F. Schaff is a shareholder and co-chair of the Cannabis Law, Health Law and Corporate teams at Wilentz, Goldman & Spitzer in Woodbridge. He is co-chair of the NJSBA's Cannabis Law Committee. Lisa Gora is an attorney with Wilentz, Goldman & Spitzer. Her practice is focused on corporate, health and cannabis law. She is secretary of the NJSBA's Cannabis Law Committee.