When Will NJ Get Legal Weed?

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Brian Lehrer: Brian Lehrer on WNYC. When New Jersey lawmakers legalized cannabis last year, they set a deadline to open dispensaries for recreational sales by this month, February 22nd precisely, but the challenges for new cannabis companies aka Cannapreneurs, have been mounting from obtaining licenses to just finding space for business. It looks like New Jersey's original opening day for recreational sales of cannabis is likely going to get pushed back and the barrier to entry remains especially high for Black-owned Cannapreneurs.

Last month, New Jersey representative, Donald Payne Jr., called out the New Jersey cannabis regulatory commission by announcing his disapproval that not a single cannabis license since the state legalized medical use in 2012 even and including this recent round of recreational licenses has been issued to Black-owned businesses. Now, representatives of the CRC, the Cannabis Regulatory Commission, emailed our show this morning, knowing we were going to do the segment to say it has not released any details about the ownership of awardees. They say that Payne's statement is false.

Let's see what's behind the delay, and which hurdles will need to be overcome to open store doors. We do know that Governor Murphy said doing it right in terms of racial justice is one of the reasons it's being delayed. With us now is Caroline Lewis, a reporter for WNYC and Gothamist. Hi, Caroline.

Caroline Lewis: Hi, Brian. Thanks for having me.

Brian Lehrer: Listeners, wondering if any of you have been trying to get into the recreational sales business in New Jersey. 212-433-WNYC. Help us report this story. If you're just waiting for the stores to open, we'll give you a lower priority on the phones if you have questions about that. We want to know if you're trying to get into this new legal business in New Jersey, what sort of issues you're coming up against or how it's going. 212-433-WNYC, 433-9692. Have you been able to get a license? If so, how did you do it? What about space to grow and sell?

We’ll hear Caroline discuss how warehouse space is a problem in the order from Amazon economy with places like Amazon just buying up so much land for warehouse spaces. They don't have a place to put some of the cannabis-related businesses that they expected to have, apparently. Listeners, if you're trying to set up a Black-owned cannabis business in particular, or have tried in the past, or are interested in the rolling this out in the most racially just possible way aspect of this, what do you want to report or ask? 212-433-WNYC. 212-433-9692, or tweet your story or your question @BrianLehrer. Caroline, what's the space issue?

Caroline Lewis: Well, I think, part of the problem is that most municipalities in New Jersey won't allow any type of cannabis business whatsoever. Of course, that's already very limiting. Then, within municipalities, they have their own zoning regulations, which is common saying that a business can't open near a school, for example. Then, as you mentioned, there's very limited available industrial space in New Jersey as it is. Speaking to some people, especially trying to open a growth site or a manufacturing site where they actually need warehouse space or industrial space, they're really struggling sometimes to find anything that works.

Brian Lehrer: New Jersey is issuing applications for licenses to grow, manufacture, and test cannabis products. There are all these steps. I know we've reported on it from other legal states before these laws got passed in our immediate area of New York and New Jersey, there really are quite a number of steps that a state has to go through before somebody can walk into a legal weed store and buy some edibles or something, right?

Caroline Lewis: Right. In New Jersey, they passed laws legalizing cannabis for recreational use. Then the Cannabis Regulatory Commission had to set up the actual regulations of what the application is going to look like and how they're going to review applications. They're actually still in the process of reviewing applications. They started accepting applications like you said for growers, manufacturers, and testing companies on December 15th. They have actually not issued any exclusively recreational licenses yet. There are only medical companies licensed in New Jersey. Then they won't even start reviewing licenses for dispensaries until March 15th.

Although they set this aspirational deadline of having people buy cannabis at recreational dispensaries on February 22nd, they're still in the licensing process. The only companies that would actually be available to sell weed to the public if they were given the green light from the state would be the existing medical companies.

Brian Lehrer: Does all the legal marijuana that is sold in New Jersey have to be grown in New Jersey? People who follow this at all in the past may think, “Oh, New Jersey is not where street weed comes from, it comes from California. It comes from Mexico. It comes from I don't know, but not New Jersey.” Nobody's talked about New Jersey weed in the black market over the years. Is there the climate? Is it all going to be indoors? Is all the marijuana products sold in New Jersey grown in New Jersey?

Caroline Lewis: Yes. People do not think about Jersey weed the way they think about Cali weed, obviously. It's an issue where because marijuana is not federally legal, it can't be transferred across state lines. That's one of the biggest challenges whenever a state legalizes marijuana, they have to set up the entire industry from seed to sale. Meanwhile, in states like Oregon or California, there are companies that might be producing so much marijuana that they don't know what to do with it. Once it is federally legal, I think the industry will look very different.

Brian Lehrer: Then all the marijuana will come from the Sacramento area, like all our tomatoes. Do operations need to be vertically integrated, what you called seed to sale, or can it be one company that grows, another company that processes, another company that tests?

Caroline Lewis: Right. The recreational companies are not going to be vertically integrated; they are going to be like you said, there's licenses for dispensaries, licenses to grow cannabis, and that sort of thing. Then there are these medical marijuana companies that are already set up that are growing and manufacturing, and selling, and they're very eager to start selling to the general public.

Brian Lehrer: Let's take phone call from I think somebody's trying to get into the business. Jonathan, in Union County, you're on WNYC. Hi, Jonathan.

Jonathan: Hey, how are you doing? My name is Jonathan Mayo with Lucky Buds LLC, out of Roselle, New Jersey, its impact zone. We're trying to get into the industry here. One of the issues that we have is really the cost of getting the application together. We are a micro-business, we're a small business, and putting together an application can really cost upwards of $50,000 or more.

Brian Lehrer: Wow.

Jonathan: Yes. As of 10 persons small business, it's not easy. That's pretty much all your life savings to get out in front of the CRC [crosstalk].

Brian Lehrer: Can you break that down for us all a little bit? What it's up to $50,000? What are some of the components of that just to get your application ready?

Jonathan: The application has to be done, essentially, all by professionals. As just a standard person trying to get into the business, you need to work with, obviously, attorneys, you need to work with security professionals, you need to work with environmental impact professionals. All these things need to be done by professional vendors, and you have to pay to get that done. They know it's cannabis, they know that you're going to make a lot of money in it. There may be a premium on some of it but even as a micro-business, even as an impact zone, even as the social equity applicant like we are, we still see some of these really high prices.

Brian Lehrer: Explain the social equity applicant aspect of that. What does that mean?

Jonathan: There's a couple ways of getting that designation for social equity and one of them is living in a highly affected area by cannabis prosecution, essentially. One of our team members lives in one of these areas for the past six years at attend. He also makes a certain wage, which is 80% of the New Jersey medium income, that designates him as a social equity applicant and he's our primary owner, 51% owner.

Brian Lehrer: Goodluck, Jonathan. Thank you. Keep us apprised when we do another segment. Anything to reflect on that, Caroline? Is his experience very instructive for people to understand what's going on right now toward legal cannabis sales?

Caroline Lewis: Yes, I think that it is instructive in the sense that we've seen increasingly as states legalized marijuana, they tried to put provisions in the law that make it so that social equity applicants are prioritized, and they have different ways of doing that. It really comes down to the nuts and bolts of what's required to apply. I think that we've seen very mixed results with social equity provisions in the past in other states. I think people are really skeptical as they're watching how it's actually playing out.

I will also say that micro businesses, the micro-business license was created in New Jersey to give an edge to local residents and to create a lower barrier to entry. Those licenses require that 51% of the owners' officers and employees live either in the county where they're opening the business or in an adjacent county. Because so few counties are even allowing the business, and there are all these other barriers. Some of these entrepreneurs that I spoke to said that they literally can't find a space. It's just there are all these things that come up in the logistics of it that make it hard to sometimes deliver on those promises.

Brian Lehrer: Here's another caller, who I think is trying to get into the business, Frank in Woodbridge, you are on WNYC. Hi, Frank.

Frank: Hi. How's the going?

Brian Lehrer: Good.

Frank: I'm really interested in producing food and then making it available through new distributors. If I make a batch of, let's say, a dessert, and then I get a package, what am I facing in terms of insurance, and in terms of-- I'm not really sure what other legal technicalities I'm going to have to face in order to, A, produce it, and then B, distribute it. I mean, I don't need a lot of space. Can I make it in my kitchen or do I have to go somewhere else to make a batch?

Brian Lehrer: It sounds like you're more contemplating getting into this business, then having taken steps so far, right?

Frank: That's absolutely correct, yes.

Brian Lehrer: All right. Okay. Interesting, though. Caroline, and maybe consumers of, I don't know, marijuana brownies or something like that, if things like that are actually going to be sold at the dispensaries. Do they come from other producers who maybe make these desserts, as he called them, in their kitchens, and products get tested, and then they get sold in the dispensaries? What's the food end of this, if you know?

Caroline Lewis: I mean, basically, when you talk about a manufacturing license, I think that includes processing cannabis into different products, including edibles and things like that. I don't know the specific details of what's required or whether there's-- or whether it's easier for a micro business to set up a manufacturing operation. I think there's probably more to it than just making some brownies in your kitchen and then shopping them around to dispensaries. Clearly, this is a highly regulated industry, and so there are these barriers to entry.

Brian Lehrer: Yes, and I'm sure it's going to be different for people who want to produce perishables, like baked goods, that would have a shelf life compared to just selling bags of flour, or some processed edibles like gummies or something that can sit around for a lot longer. I guess that'll be another aspect of it. Maybe that's a good jumping-off point for you to talk about the testing because that's part of your article, that testing is part of this industry. There's growing, there's manufacturing, there's testing and then there’s selling. Who will test what for what?

Caroline Lewis: Well, I mean, as with the growing and manufacturing licenses, they just started doing applications in December for testing licenses as well. That's going to be fewer licenses. Most of the applications submitted were to grow, and then a significant number were to manufacture, and then just a handful to test. Really a state only needs a certain number of testing companies, but it's a really important part of the industry, because that’s the quality control. Usually, their requirements in terms of products having to go through testing from one of these companies in order to end up on dispensary shelves.

Brian Lehrer: They're testing for I guess that each unit has the amount of THC that it says it has. People aren't getting cheated and getting less than they buy, but also so people don't have the danger of getting more than they think they're taking in. Then is there also a question of contaminants or anything like that with the testing?

Caroline Lewis: I mean, yes. I think in general, it's the idea of making sure that these are products that are safe for consumers, I'm not sure exactly what specific things they're looking for in that sense.

Brian Lehrer: Kenny, in Brooklyn, I think is trying to get into business. Hi, Kenny you're on WNYC.

Kenny: On with the great Brian Lehrer, a treasurer of the tri-state area. We'd love to thank you and your crew for the incredible program that you put together every day.

Brian Lehrer: You are very kind. Thank you.

Kenny: Yes, from my perspective, the real problem that you deal with, with this industry is that the regulators and legislators who are called upon to write the laws and the regulations governing the rules of the road for a 21st-century cannabis industry are literally 20th-century prohibition, who in their previous voting record have pretty much across the board supported cannabis prohibition, up to one including our recent mayor, right? Didn’t he say on your program the other day that he had signed on to the Rockefeller Drug Laws as a point of pride?

Brian Lehrer: No, no, no, no. He said as a point of pride that when he was in the State Senate, he was a leader in overturning the Rockefeller Drug Laws.

Kenny: Ah, got it. I must have misunderstood that. For the most part, the same people who won elections promising to keep their communities safe from the scourge of drugs, are now writing the laws and appointing the people who are writing the regulations for a 21st-century industry that they have no frame of reference for. [crosstalk]

Brian Lehrer: In what way is that making the laws come out badly? Is it affecting an attempt that you might be making to get into business?

Kenny: The answer to your second question is yes. I think it's affecting everyone's attempt to get into the business. The answer to your first question is that they're approaching it from a point of-- from the physician or through the lens of public safety and public health, as though the industry represents a danger to public safety, and the products represent a danger to public health, which has to be mitigated.

It's pretty clear Biden support that legalization gets from voters, I think 46% of the country lives in Rec states and 70 plus percent of the country lives in medical states, voters don't see the industry as a danger to public safety. The fact that you don't see people presenting to emergency rooms with cannabis-related symptoms is a pretty clear indication that the products themselves don't represent a danger to public health. That's the lens that most legislators and regulators approach doing their job through. Does that make sense?

Brian Lehrer: Yes, are you trying to get in, in a certain way, you have any story to tell?

Kenny: Oh, I've lots of story to tell, [chuckles] probably more time than you've got. Yes, my partners and I are most certainly looking to be active in representing cannabis culture, by engaging in cannabis commerce, and not necessarily the other way around. Which is how most operators looking to get into the space who are transitioning from tech or healthcare, or finance, that they're coming to it from it. It's commerce first, and they embrace as much culture as they have to in order to be able to do business. For me, and a lot of my friends from the culture, this is a way of life, and the commerce comes second. It's an industry where you can really do well by doing good because this is a plant that is a medicine-first and really brings people together.

Brian Lehrer: Kenny, thank you very much for your call. A few more minutes on the New Jersey side of rolling out legal cannabis dispensaries, New York is way behind New Jersey. The law in New York passed months after New Jersey's and will catch up with the New York process eventually, but New York is way behind New Jersey. The headline here is that the dispensaries for actual recreational cannabis sales were supposed to open by this month. February 22nd, 2022 was the target date, but that is not going to happen because of steps the way taking a long time. We're talking about all of this with Caroline Lewis, who has reported it for Gothamist.

Caroline, on the racial justice aspects or an aspect of the racial justice issue here. On January 28th, Congressman Donald Payne issued a statement announcing disapproval of the fact that none of the licenses issued so far in New Jersey have been granted to Black-owned businesses. First, is he referring to medical sales ever since that started in, I think 2012, or have recreational license even been distributed yet, because social equity was always supposed to be a core requirement for the rollout of recreational sales in New Jersey.

Governor Murphy issued a statement last week saying making sure it's done with social equity in mind is the main reason that this is being delayed. I mentioned the statement that the regulatory commission issued to us this morning knowing we were going to do this segment saying, “No, Congressman Payne is wrong. No licenses have been issued yet.” What's going on here on the social equity, Black-owned businesses front?

Caroline Lewis: What representative Payne said had to be referring to medical licenses because no recreational licenses have been issued yet. There was another wave of medical licenses that were recently issued that could eventually be converted to recreational licenses. 100% diversity has been an issue. People have said that there have not been enough licenses granted to Black-owned businesses, the state, however, denies that no licenses have been granted to Black-owned businesses. That's something that I definitely want to look into. I haven't pressed them on like, “Okay, so then how many?”

Definitely I think that there are more requirements around social equity specifically for the recreational program than there were for the medical program. The hope is that when the recreational licenses are distributed, it will reflect that and there will be more diverse businesses getting these licenses. I think people have a right to be skeptical because nationally, White ownership of legal cannabis businesses has been the norm.

Brian Lehrer: Paula, in West Orange, I think is trying to get into the business. Hi Paula, thanks for calling in you're on WNYC. Oh, Paula disappeared. Okay. Let me try. Haime, in Brooklyn-- Juliana, I'm talking to my engineer now, the great Juliana Fonda, my clicker seems to be disconnecting people instead of putting them on the air. It looks like on line three, Haime, in Brooklyn, who I just disconnected is calling back. I wonder if we can put him right up. Hi, Haime, you're on WNYC. Thanks for calling in.

Haime: Hi, Brian. I really enjoy your show, first all.

Brian Lehrer: Thank you.

Haime: I operate a licensed CBD business in Brooklyn. Me and my wife started the business in Southern in California. We had a small delivery service out there, and we became advocates for the therapeutic use of cannabis because my wife used it in her Stage IV metastatic breast cancer treatments, and it actually saved her life. The message that I really want give to people or that we make it a point to give people, is that we look at cannabis as a public safety issue all the time, and we really want to regulate it as if it was plutonium, but there's a lot of awareness that needs to be raised and a lot of information that needs to be shared with people so that they can understand that cannabis can enrich people's lives.

Brian Lehrer: Let me jump in because our time is going to run out, but you're making a very similar point to our previous caller. If we're talking about something that changes people’s consciousness, or impairs their ability to drive, or some of the other things that it does besides all the wonderful things that it does in the perception of people who use it, if we can compare it to alcohol, for example, doesn't it also need to be regulated in terms of public safety?

Haime: Absolutely. The rules to ensure public safety have to be aware, but real science has to be taken into consideration to write those rules. Right now, our perception is reactionary. We're still looking at cannabis through the puritanical lens and we don't fully understand it to regulate it the right way.

Brian Lehrer: You told our screener that you're trying to get a license. Is this approach to it that you're decrying making it harder? Oh, his line disconnected. I accidentally did that again, so I apologize. Haime, call us on another occasion as well. We are just about at a time in the segment tracking the progress of New Jersey's legal marijuana industry. Caroline, last question. When are the dispensaries going to open? When can people walk in and buy their legal weed products?

Caroline Lewis: I don't think that there's been a new date set yet, but the medical marijuana companies are certainly putting pressure on to get the state to let them open their doors. They're claiming they're going to have to lay people off and destroy product if they can't start selling to the public soon. We'll see if that works.

Brian Lehrer: Caroline Lewis reporting on the rollout of New Jersey's legal marijuana industry and the various barriers that are causing a delay from the target goal of February 22nd of this year, later this month, opening the first dispensaries, why that's happening and what might come next. Caroline, thanks so much.

Caroline Lewis: Thanks for having me.

 

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