Understanding New Jersey’s Medical Cannabis Expansion Law

By Charles Alovisetti, Partner; Jennifer Cabrera, Counsel; and Sahar Ayinehsazian, Associate Attorney

Aug 2, 2019

On July 2, 2019, New Jersey Governor Phil Murphy signed Assembly Bill 20 (AB 20 or the Act). AB 20’s expansion of New Jersey’s current medical cannabis program includes:

  • Establishing a Cannabis Regulatory Commission (CRC)
  • Expanding the list of qualifying medical conditions
  • Expanding the list of professionals who may prescribe medical cannabis to patients
  • Phasing out sales tax on medical cannabis
  • Establishing equity provisions for small businesses as well as minority, women, and disabled veteran-owned businesses
  • Establishing protections for medical cannabis patients

The Cannabis Regulatory Commission

Under the Act, the CRC will oversee, administer and enforce New Jersey’s medical cannabis program. Within 180 days of the Act’s effective date, the CRC is tasked with issuing rules implementing the law, including setting limits for licenses and dosage guidelines. Within the CRC, there will also be an Office of Minority, Disabled Veterans, and Women Cannabis Business Development that will promote NJ cannabis program participation by persons from socially and economically disadvantaged communities.

License Types and Limitations

AB 20 creates three distinct license types: cultivators, manufacturers, and dispensaries. Special consideration by the CRC will be given to applicants that work with a higher education institution to develop integrated curriculum; and clinical registrants that provide cultivation, manufacturing and dispensing services in conjunction with an academic medical center that will engage in clinical research.

The law imposes a ban on vertical integration by new licensees during the first eighteen months after the law’s effective date. During that eighteen-month period, AB 20 also limits the number of cultivation licenses in the state to twenty-eight—an increase from the previous limit of twelve. Additionally, the Act requires that 30% of new licenses go to minority, women and disabled veteran-owned businesses and 10% of new licenses go to microbusinesses. Finally, one-third of new permits must be “conditional permits,” which are only available to qualifying small businesses and feature a less onerous application process. 

Expanded Medical Conditions and Patient Limitations

The Act expands the list of medical conditions for which medical cannabis may be recommended by a certified physician, including chronic pain conditions, anxiety, Tourette’s Syndrome and Opioid Use Disorder. It also loosens certain restrictions on providers who may certify cannabis patients to include physicians, physician assistants, and advanced practice nurses.

In addition, the Act repeals several legislative obstacles to access, eliminating the need for authorizing practitioners to register with the CRC and removing the requirement that there be a bona fide provider/patient relationship. Finally, AB 20 increases patients’ monthly cannabis limits from two ounces to three ounces and allows out-of-state patients authorized by a New Jersey practitioner to purchase medical cannabis in New Jersey.

New Protections

The Act includes protections for medical cannabis patients, too, by prohibiting employers from taking action against an employee solely on the basis of the employee being a registered medical cannabis patient. Additionally, the Act makes it unlawful to discriminate against a medical cannabis patient when renting or leasing property, or issuing a professional license, certificate or permit to the patient. Healthcare facilities are also prohibited from taking action against a healthcare professional for authorizing medical cannabis. Finally, the Act requires that each batch of medical cannabis be tested for potency and contamination to ensure that patients have access to safe products.

It may take some time before New Jersey patients see all of these changes to the medical cannabis program, but once implemented, the Act will greatly expand patients’ access to medical cannabis.