S3012

An Act concerning interstate transportation or distribution of medical or personal-use cannabis and amending and supplementing Title 24 of the Revised Statutes.

Be It Enacted by the Senate and General Assembly of the State of New Jersey:

1. Section 14 of P.L.2009, c.207 (C.24:6I-12) is amended to read as follows:

14. a. The commissioner, or after the effective dates of P.L.2019, c.153 (C.24:6I-5.1 et al.) and P.L.2021, c.16 (C.24:6I-31 et al.), the commission, shall report to the Governor, and to the Legislature pursuant to section 2 of P.L.1991, c.164 (C.52:14-19.1):

(1) no later than one year after the effective date of P.L.2009, c.307 (C.24:6I-1 et al.), on the actions taken to implement the provisions of P.L.2009, c.307 (C.24:6I-1 et al.); and

(2) annually thereafter on the number of applications for registration with the commission, the number of qualifying patients registered, the number of designated and institutional caregivers registered, the nature of the qualifying medical conditions of the patients, the number of registrations revoked, the number of medical cannabis cultivator, medical cannabis manufacturer, and medical cannabis dispensary permits issued and revoked, the number and type of integrated curricula approved, established, and maintained in connection with an IC permit, the number of testing laboratories licensed, the number of clinical registrant permits issued and the nature of the clinical research conducted by each clinical registrant, any incidents of diversion of medical cannabis, information concerning racial, ethnic, disabled veteran, and gender diversity in the individuals issued and currently holding permits issued by the commission, the number of permit applications received from businesses owned by minorities, disabled veterans, and women and the number of such applications that were approved, the business development initiatives undertaken by the Office of Minority, Disabled Veterans, and Women Cannabis Business Development pursuant to section 32 of P.L.2019, c.153 (C.24:6I-25) and the outcomes or effects of those initiatives, statistics concerning arrests for drug offenses throughout the State and in areas where medical cannabis dispensaries are located, including information concerning racial disparities in arrest rates for drug offenses generally and cannabis offenses in particular, the number of motor vehicle stops by law enforcement involving violations of R.S.39:4-50, or section 5 of P.L.1990, c.103 (C.39:3-10.13) concerning operators of commercial motor vehicles, for driving under the influence of medical cannabis, or suspicion thereof, cataloged by the jurisdictions in which the stop occurred, and the race, ethnicity, gender, and age of the vehicle driver and any other vehicle occupants, the number of deliveries of medical cannabis performed and the percentage of total medical cannabis dispensations that were completed by delivery, [and] the number of health care practitioners authorizing patients for the medical use of cannabis, including the types of license or certification held by those practitioners, and a list of interstate cannabis agreements entered into pursuant to section 2 of P.L. , c. (C. )(pending before the Legislature as this bill), including information regarding the terms and conditions of each agreement, the activities undertaken by State agencies to implement the agreement, and the effects of the agreement on this State’s cannabis industry; and

(3) beginning no later than one year after the effective date of P.L.2021, c.16 (C.24:6I-31 et al.), and annually thereafter in the same report concerning information on medical cannabis activities or a separate report, information on:

(a) the number of citations, arrests, or charges for manufacturing, distributing, or possessing or having under control with the intent to distribute marijuana or hashish in violation of paragraph (12) of subsection b. of N.J.S.2C:35-5, or for obtaining or possessing marijuana or hashish in violation of paragraph (3) of subsection a. of N.J.S.2C:35-10, cataloged by the jurisdictions in which the acts resulting in the citations, arrests, or charges occurred, and the race, ethnicity, gender, and age of the persons cited, arrested, or charged;

(b) the number of motor vehicle stops by law enforcement involving violations of R.S.39:4-50, or section 5 of P.L.1990, c.103 (C.39:3-10.13) concerning operators of commercial motor vehicles, for driving under the influence of personal use cannabis or marijuana, or suspicion thereof, cataloged by the jurisdictions in which the stop occurred, and the race, ethnicity, gender, and age of the vehicle driver and any other vehicle occupants;

(c) the total number of personal use cannabis licenses issued since the distribution of the previous report to the Governor and Legislature, as well as the number for each class of license issued, and the total number and type of applicants that submitted applications for licenses and whether they were approved, reapproved, or denied; [and]

(d) the data compiled by the Office of Minority, Disabled Veterans, and Women Cannabis Business Development pursuant to section 32 of P.L.2019, c.153 (C.24:6I-25) about participation in the lawful operation of cannabis establishments, distributors, and delivery services by persons from socially and economically disadvantaged communities, including minority, disabled veterans', and women's business licensing and business development in the personal use cannabis marketplace, and the data shall include the office's analysis of the total number of licenses applied for and issued since the distribution of the previous report to the Governor and Legislature compared with the total number of minority businesses and women's businesses, as these terms are defined in section 2 of P.L.1986, c.195 (C.52:27H-21.18), and disabled veterans' businesses, as defined in section 2 of P.L.2015, c.116 (C.52:32-31.2), that submitted applications for licenses and whether they were approved, reapproved, or denied; and

(e) a list of interstate cannabis agreements entered into pursuant to section 2 of P.L. , c. (C. )(pending before the Legislature as this bill), including information regarding the terms and conditions of each agreement, the activities undertaken by State agencies to implement the agreement, and the effects of the agreement on this State’s cannabis industry.

b. The reports shall not contain any identifying information of patients, caregivers, or health care practitioners.

c. (1) Within two years after the effective date of P.L.2009, c.307 (C.24:6I-1 et al.) and every two years thereafter, the commissioner or, after the effective date of P.L.2019, c.153 (C.24:6I-5.1 et al.), the commission, shall: evaluate whether there are sufficient numbers of medical cannabis cultivators, medical cannabis manufacturers, medical cannabis dispensaries, and clinical registrants to meet the needs of registered qualifying patients throughout the State; evaluate whether the maximum amount of medical cannabis allowed pursuant to P.L.2009, c.307 (C.24:6I-1 et al.) is sufficient to meet the medical needs of qualifying patients; and determine whether any medical cannabis cultivator, medical cannabis manufacturer, medical cannabis dispensary, or clinical registrant has charged excessive prices in connection with medical cannabis.

The commissioner or, after the effective date of P.L.2019, c.153 (C.24:6I-5.1 et al.), the commission, shall report all such findings no later than two years after the effective date of P.L.2009, c.307 (C.24:6I-1 et al.), and every two years thereafter, to the Governor, and to the Legislature pursuant to section 2 of P.L.1991, c.164 (C.52:14-19.1).

(2) The commission, beginning no later than one year after the effective date of P.L.2021, c.16 (C.24:6I-31 et al.), may also include in its reports information concerning its periodic evaluation of whether the existing numbers of cannabis cultivators, cannabis manufacturers, cannabis wholesalers, cannabis distributors, cannabis retailers, and cannabis delivery services are sufficient to meet the personal use cannabis market demands of the State, and actions the commission may take to issue additional cannabis licenses as authorized by paragraph (1) of subsection a. of section 18 of P.L.2021, c.16 (C.24:6I-35), or if there is an oversupply of licenses, as well as information about any increase in the rates of use of marijuana and cannabis by persons under 21 years of age.

(cf: P.L.2021, c.16, s.7)

2. (New section) a. As used in this section:

“Agreement” means an agreement relating to commercial cannabis authorized pursuant to this section and entered into between this State and another state or states.

“Commission” means the Cannabis Regulatory Commission. “Contracting state” means a state of the United States, including a district, commonwealth, territory, or possession subject to the legislative authority of the United States, with which the Governor has entered into an agreement pursuant to this section.

“Foreign licensee” means the holder of a medical or personal-use cannabis license issued pursuant to the laws of another State that has entered into an agreement pursuant to this section.

“State license” means a medical or personal-use cannabis license issued by the licensing authority of this State.

b. The Governor of this State is hereby authorized to enter into an agreement with another state or states authorizing medicinal or personal-use commercial cannabis activity, or both, between entities licensed under the laws of the contracting state and entities operating with a State license, provided that the following criteria are met:

(1) the commercial cannabis activities are lawful and subject to licensure under the laws of the contracting state; and

(2) with respect to the interstate transportation of cannabis or cannabis products, the agreement prohibits the following:

(a) the transportation of cannabis and cannabis products by any means other than those authorized under the laws of the contracting state and the regulations of the commission; and

(b) the transportation of cannabis and cannabis products through the jurisdiction of a state, district, commonwealth, territory, or possession of the United States that does not authorize that transportation.

c. Notwithstanding any other law, a foreign licensee may engage in commercial cannabis activity with a State licensee and a State licensee may engage in commercial cannabis activity with a foreign licensee, subject to the requirements and limitations set forth in this section.

A foreign licensee shall not engage in commercial cannabis activity within the boundaries of this State without a State license, or engage in commercial cannabis activity within a local jurisdiction without proper authorization issued by the local jurisdiction.

d. An agreement shall require that the contracting state impose requirements on foreign licensees with regard to cannabis and cannabis products to be sold or otherwise transferred or distributed within this State that meet or exceed the requirements applicable to State licensees, including the following:

(1) enforceable public health and safety standards that are equivalent to the requirements of the commission;

(2) mandatory participation in a system administered by this State to regulate and track cultivation, manufacturing, distribution, transportation, sale, and destruction of cannabis and cannabis products from seed to sale;

(3) standards for testing of cannabis or cannabis products that meet or exceed the standards applicable to testing laboratories licensed by the commission;

(4) requirements for the packaging and labeling of cannabis and cannabis products that meet or exceed the packaging and labeling requirements established pursuant to commission rules;

(5) requirements for quality assurance and inspection of cannabis or cannabis products that meet or exceed the requirements applicable to cannabis or cannabis products cultivated, manufactured, or sold by State licensees;

(6) restrictions on marketing, labeling, and advertising within this State by foreign licensees that meet or exceed the restrictions of State licensees pursuant to P.L.2009, c.307 (C.24:6I-1 et seq.), P.L.2021, c.16 (C.24:6I-31 et seq.), and commission rules; and

(7) a process for identification of adulterated or misbranded cannabis products, and the destruction of those products, using standards that meet or exceed the standards and procedures promulgated by the commission.

An agreement shall require that the contracting state impose restrictions upon advertising, marketing, labeling, or sale within the contracting state that meet or exceed restrictions established pursuant to P.L.2009, c.307 (C.24:6I-1 et seq.), P.L.2021, c.16 (C.24:6I-31 et seq.), and commission rules.

An agreement shall provide for collection of all applicable taxes.

e. An agreement shall include provisions requiring the commission and any other appropriate regulatory authorities of the contracting state to address public health and welfare emergencies concerning cannabis or cannabis products that are sold or intended for sale within this State, including for prompt recall or embargo of adulterated or misbranded cannabis products.

An agreement shall include provisions requiring appropriate regulatory authorities of each state to investigate instances of alleged noncompliance with the commercial cannabis regulatory rules and regulations upon request by the other state and in accordance with mutually agree-upon procedures. An agreement shall include provisions requiring the contracting state to reasonably cooperate with this State’s investigations concerning foreign licensees, and requiring the commission to reasonably cooperate with investigations by the contracting state concerning persons or entities holding State licenses.

f. An agreement shall include provisions determined by the Governor to promote the inclusion and support of individuals and communities in the cannabis industry who are linked to populations and neighborhoods that were negatively or disproportionately impacted by cannabis criminalization.

g. The Governor is exempt from the rulemaking procedures and requirements of the Administrative Procedure Act, P.L.1968, c.410 (C.52:14B-1 et seq.) when entering into an agreement, or amendments to an agreement, provided that prior to execution of an agreement or amendment to an agreement, the Governor shall:

(1) submit the proposed agreement or amendments to the Joint Budget Oversight Committee for review and comment. The committee shall have 60 days to review the proposed agreement or amendment and to submit written recommendations to the Governor. The committee shall only submit a recommendation to the Governor if a majority of the members agree to that recommendation. The Governor shall consider all recommendations submitted by the committee and may revise the proposed agreement or amendment to incorporate the recommendations. If the Governor does not incorporate any recommendations, the Governor shall set forth, in writing, the reasons for not incorporating the recommendations; and

(2) post the proposed agreement or amendment on the Governor’s and commission’s internet websites for public comment for 30 days. The Governor shall consider any comments received.

h. An agreement entered into pursuant to this section shall not take effect unless one of the following occurs:

(1) federal law is amended to allow for the interstate transfer of cannabis or cannabis products between authorized commercial cannabis businesses;

(2) federal law is enacted that specifically prohibits the expenditure of federal funds to prevent the interstate transfer of cannabis or cannabis products between authorized commercial cannabis businesses;

(3) the United States Department of Justice issues an opinion or memorandum allowing or tolerating the interstate transfer of cannabis products between authorized commercial cannabis businesses; or

(4) the Attorney General issues a written opinion that implementation of agreements entered into under this section will not result in significant legal risk to this State based on review of federal judicial decisions and administrative action.

The commission shall notify the Governor and the Legislature upon the occurrence of an event described in this subsection, and shall post the notification on the commission’s internet website.

3. This act shall take effect immediately.

STATEMENT

This bill permits the Governor to enter into interstate agreements authorizing medicinal or personal-use commercial cannabis activity, or both, between entities licensed in states in which cannabis is licensed.

Any interstate agreement is required to prohibit the commercial transportation of cannabis by any other means other than what is established in the agreement and also prohibit the transportation of cannabis through any state which does not authorize that transportation of cannabis. Any foreign licensee is required to obtain a license from this State and any proper authorization from a local jurisdiction prior to engaging in commercial cannabis activity.

Once the agreement is established, a State licensee is permitted to engage in commercial cannabis activity with a foreign licensee, i.e., the holder of a commercial cannabis license issued under the laws of another state. In order for the agreement to become effective, the bill requires that one of the following occur: (1) federal law is amended to allow for the interstate transfer of cannabis or cannabis products between authorized commercial cannabis businesses; (2) federal law is enacted that specifically prohibits the expenditure of federal funds to prevent the interstate transfer of cannabis or cannabis products between authorized commercial cannabis businesses; (3) the United States Department of Justice issues an opinion or memorandum allowing or tolerating the interstate transfer of cannabis products between authorized commercial cannabis businesses; or (4) the Attorney General issues a written opinion that implementation of agreements entered into pursuant to the provisions of this bill will not result in significant legal risk to this State based on review of federal judicial decisions and administrative action.

Prior to making any agreement, the Governor is required to submit the proposed agreement to the Joint Budget Oversight Committee which will have 60 days to review the proposed agreement. The committee may submit a recommendation to the Governor upon agreement of the majority of the members. The proposed agreement also is required to be posted on the Governor’s and Cannabis Regulatory Commission’s internet websites for public comment for a period of 30 days.