Brach Eichler LLP
The sale of cannabis for recreational use finally is here. Did the long delay help the state or hurt the state when it comes to establishing itself in the business of cannabis?
“We are hopeful that the delay in opening the adult use market was a prudent investment in ‘getting it right’ the first time. Creating a new, licensed, regulated and taxed industry is challenge enough. Striving to achieve social equity within the new levels of this business while building a new state agency from the ground up to regulate it also presents a significant challenge to the expected on-time performance expectations of the public. Doing it all while we are dealing with a global pandemic frankly makes me wonder how they were able to get it all done at all.”
“I do not think the delays encountered to date will be of any long-term significance. 68% of the voters made it clear that it was time to end the failed policies of cannabis prohibition and demand for high quality, clean and regulated product will be extraordinarily high in New Jersey. Within a year, no one will remember we missed the projected start date. My biggest disappointment is that the Cannabis Regulatory Commission couldn’t make it happen by April 20.”
For those just getting interested in getting into the cannabis business space, whether it be growing, distributing or selling, is it too late? What would you advise someone who is looking into a venture today?
“I would hope that anyone interested has educated themselves during the long run-up to opening this market that there are many entry points for folks interested in cannabis business. There is still plenty of time to do so, especially since licenses are not in a fixed number and some forms of licensure have not even opened up yet.”
“That said, the cannabis business has all of the risk attendant to any new business venture, plus the added risk that a change of federal law, where it is currently still illegal, would significantly change the cannabis playing field. One needs to have a broad band of risk tolerance, facile business plans and models, and hopefully a unique brand or product that will help you to capture the consumer. It certainly is not too late, but know what your plan of attack is and have a Plan B if things change.”
Do you think the regulations will create an equitable market, one where underserved communities have a fair chance to succeed, as Gov. Phil Murphy has wanted from the beginning? If not, what rules/regulations would you add to meet this ideal?
“New Jersey can be rightfully proud of the priority it attaches to achieving some measure of social justice, diversity and equity in the cannabis space. I think it will take five years, and only then in hindsight, to determine if the administration’s goals have been achieved.”
Give us one more thought on the cannabis industry in New Jersey?
“The regulators need to create a way for operators in New Jersey to offer consumers a much broader array of product selections. Edible and drinkable cannabis products are now wildly popular in other states, and the regulators should ensure product safety and consistency and then step back and let the marketplace decide if there is a market for the product. Don’t overregulate the menu of cannabis-containing products that can be offered to the consumer.”
“I also think it is foolish that we do not allow home growing of a number of plants for personal consumption only. People investing in cannabis businesses might not like it, but it will actually promote cannabis consumption, which benefits the industry in the long run. It is also fair and equitable to taxpayers who do not want to pay the taxes associated with cannabis marketplace. Think of it like the sacred New Jersey tomato. People spend a lot to grow them in their back yard, but they also purchase them at farm markets and restaurants, as well.”