Medical and Recreational Marijuana Holds Implications for Municipalities

NJMMA Spring 2019 Conference

The legalization of marijuana has been a consistent, and, at times, contentious topic both in New Jersey state politics and across the state’s many municipalities. At the Spring Conference, a seminar focused on what this means for municipalities, along with specifics on proposed legislation that could allow for the cultivation, sale and distribution of recreational marijuana, the expansion of the medical marijuana program, and the expungement of misdemeanor marijuana charges in the Garden State.

Speakers on the panel included Mike Cerra, Assistant Executive Director of the New Jersey League of Municipalities; Lt. Chris Dudzik of the Toms River Police Department; Josh Bauchner, a lawyer and partner at the Cannabis Law Practice Group; and Jonathan Boguchwal, a lawyer and partner at CLB Partners.

Cerra began the panel by discussing the legislative bills on the floor of the New Jersey Senate in their current form. The bills currently drafted are split into three parts but are inextricably linked through the three areas – medical, recreational and expungement. At the time of the panel, none of the bills looked like they would pass, but the legislature approved the expansion of the medical program in late May. At press time, the expungement bill is still pending.

In its current form, the recreational marijuana bill includes a 180-day opt-out provision for municipalities and a local-option tax. Under the proposed legislation, host municipalities can tax businesses under all four license classes –the grower, the processer, the wholesaler and the retailers. For the medical marijuana expansion, sales will continue to remain non-taxable. According to Cerra, municipal ordinance would govern the specifics of sale and the establishment sales locations. Cerra’s full presentation can be found on njlm.org.

Bauchner was tasked with explaining the difficult process that a business must go through to begin to sell marijuana for both medical and recreational use. “As marijuana remains illegal at the federal level, each step of the business startup process becomes significantly more complicated,” he explained.

First and foremost, marijuana businesses cannot use federal banks. As a result, raising funds is difficult and operating a cash business can be costly and make these locations more susceptible to theft. For managers, the biggest takeaway Bauchner provided was that in New Jersey, all institutions will need a letter of support from their local community in order to open for business. Bauchner and Boguchwal explained that this provides managers with needed leverage to ensure that their communities are comfortable with a marijuana business in their municipality.

Lt. Dudzik spoke about the challenges facing law enforcement that will come with the legalization of recreational and medical marijuana. In states that have introduced legalization, he pointed to a significant increase in driving under the influence (DUI) charges. “According to the law, anything that can impair a motorist’s ability to operate a vehicle is classified as a drug,” he said. “As a result, more officers will need to be trained to become Drug Recognition Expert (DRE) officers.” DRE officers are trained in a step process for determining if someone is under the influence.

There are currently two major issues with the DRE system in New Jersey. The first issue is availability. Currently, there are insufficient numbers of DRE-certified officers to cover all shifts and all cases that arise where drugs may be involved. There is a system to reach out to other police departments, but availability and the number of certified DRE officers will need serious focus if recreational use is passed. Another issue with the current system for DREs is that citizens are not required to submit to an evaluation. As a result, a subject can refuse the evaluation and the officer cannot make them comply. This issue would need to be addressed through legislation.

The panelists agreed that a major advantage here in New Jersey was the state’s unique and distinct advantage of learning from the other states that have already legalized marijuana and have successfully rolled out laws and regulations. Legislators and administrators should look toward these other states for both their successes and missteps.