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Wednesday, September 28, 2022

New Jersey Senate President introduces bill to allow interstate marijuana trade

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New Jersey’s governor will be empowered to enter into interstate marijuana trade agreements with other states that have legalized cannabis under a new bill introduced by Senate President Nicholas Scutari (D).

However, agreements can only be drafted if federal law changes, or if the Department of Justice issues guidelines allowing such activity.

With more adult marijuana markets emerging online in the Northeast, the legislation is timely, proposing the creation of the policy infrastructure for interstate cannabis trade that could significantly expand the currently fragmented industry and help solve potential supply and demand problems.

The fact that the bill is sponsored by the president of the Senate — who has also championed state legalization law — suggests that this is a serious legislative endeavor.

But the federal policy terms embedded in the measure leave questions about the timeline for implementation even if it is passed. The bill itself would take effect immediately upon issuance, but the governor could only legislate interstate agreements if Congress or the Department of Justice gave such activity the green light.

There are also regulatory requirements that each participating country must agree to. The New Jersey Cannabis Regulatory Commission (CRC) and the joint budget oversight committee of the legislature will have some oversight and rule-making responsibilities to that end.

Under the legislation, the text of which has not yet been posted online but was acquired by Marijuana Moment on Tuesday, interstate marijuana trade agreements would be conditioned on compliance with the contracting state’s cannabis laws, including those related to licensing.

Countries must agree on the method of transporting marijuana products for export and import. These products cannot be shipped through any country or jurisdiction that prohibits this activity.

Agreements can include medical or adult marijuana products. Given that the majority of states have legalized cannabis in some form, the map of possibilities is broad in theory (especially with regard to medical cannabis) as long as states and jurisdictions adopt permissive policies.

Any out-of-state marijuana business seeking to engage in the cannabis trade within New Jersey under the agreement must also obtain a license from state regulators, as well as from local governments where the activity takes place.

“The Agreement shall require that a Contracting State impose requirements on foreign licensees with respect to cannabis and cannabis products to be sold, transferred or otherwise distributed within that State that meet or exceed the requirements applicable to state licensees,” law Project The text says.

This includes meeting New Jersey rules on public health and safety standards, traceability of seeds for sale, laboratory testing of cannabis products, packaging and labeling requirements and marketing policies.

There must also be “a process to identify adulterated or mislabelled cannabis products, and to destroy those products, using criteria that meet or exceed standards and procedures issued by the authority.”

Agreements should also include provisions on how to deal with a “public health and social care emergency,” such as the need to recall or ban contaminated products immediately.

The legislation states that “the agreement shall include provisions requiring the appropriate regulatory authorities of each state to investigate alleged non-compliance with commercial cannabis rules and regulations at the request of the other state and in accordance with mutually agreed procedures.”


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There is also an egalitarian element in the bill that states that agreements must include governor-directed provisions that “promote the integration and support of individuals and communities in the cannabis industry associated with populations and neighborhoods that have been negatively or disproportionately affected by the criminalization of cannabis.”

Before implementing or amending an interstate marijuana trade agreement, the governor will need to submit the proposal to the Joint Budget Oversight Committee for review and recommendations. The committee will have 60 days to review the agreement and suggest any revisions.

At this point, the governor will be able to incorporate or reject the committee’s changes. If the governor rejects the revisions, they will need to share the reasoning with the committee as well as announce the agreement for 30 days for public comment.

While many industry stakeholders have pushed for legitimate interstate commerce to liberalize isolated state markets, this type of business has been specifically identified by the federal government as an enforcement priority that could warrant intervention.

In anticipation of this potential conflict, the bill lists four conditions that must be met in order for the governor to exercise the power of the interstate trade agreement.

Agreements can only be entered into and enforced if 1) Federal law is amended to expressly allow interstate marijuana trade; 2) Congress enacts budget constraints prohibiting the use of federal funds to enforce laws against such activity; 3) The Ministry of Justice issues an opinion or memorandum that “allows or tolerates” trade. or 4) the state attorney general shall issue a written directive asserting that the implementation of the proposal “will not create significant legal risks” for the state.

New Jersey regulators will be required to notify the governor and the legislature if and when any of these four conditions are met.

The bill from Scutari, who also recently submitted an action to Legalization of possession and cultivation of psilocybin at home by adults, similar to interstate cannabis legalization that was Submitted and signed into law by Oregon Governor Kate Brown (D) in 2019.

Two members of that state’s congressional delegation have followed this procedure before Provide a procedure that would reciprocate for such activity, to prevent the Department of Justice from interfering with states that have proven agreements to sell marijuana across state lines. The legislation has not progressed, however.

Two years after Brown signed statewide legislation, a coalition of cannabis organizations is beginning to rally the business community to join them in calling on the governors of four major West Coast states. To request guidance from the Ministry of Justice On the interstate cannabis trade.

The Campaign for Sensitive Markets has distributed a login letter to those interested in lobbying the governors of California, Colorado, Oregon and Washington to apply.

The Alliance noted that during the confirmation proceedings, Attorney General Merrick Garland, He said in the oral and written testimony It’s a waste of federal resources To prosecute people who act in accordance with state cannabis laws. However, the Federal Supreme Attorney did not specifically consider the question of interstate commerce.

Meanwhile, in California, there is a bill from Senator Anna Caballero (Democrat) to allow the governor to enter into interstate marijuana trade agreements. Council Appropriations Committee This week, which will determine whether he advances to the floor.

“The economics of this industry won’t make sense until we can move cannabis from where it grows most effectively to where there is greater demand,” Adam Smith, president of the Alliance for Reasonable Markets, told Marijuana Moment in a phone. Tuesday interview.

“The more we get it wrong to stimulate production in places where it will never be competitive, the more economic damage we will do and the more we hurt the young players,” he said.

Read the text From the interstate marijuana trade bill in the New Jersey Senate below:

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Photo submitted by Mike Latimer.

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