With plans to legalize marijuana in New Jersey in limbo, the already long road to expansion of the state’s medical-pot program just got longer.
The Senate overwhelmingly passed the bill authorizing the expansion yesterday but, due to a last-minute change, the measure must now go back to the Assembly for reapproval before heading to Gov. Phil Murphy’s desk.
The measure (S-10) passed on Thursday, is largely the same as what the Assembly approved last week, except for the 11th-hour changes, one of which allows employees in the cannabis industry to unionize. The Assembly is expected to vote on the newly amended version on June 10.
Senate President Steve Sweeney (D-Gloucester) told reporters the change was needed to retroactively extend bill language that offers “labor harmony” for future cannabis license holders to current license holders as well.
The un-amended bill, Sweeney said, “would’ve created an unfair system for someone that already had a license so we had to fix that.”
Expungement pulled from agenda
Overall, the measure would increase the number of medical permits for cannabis operations in New Jersey from 12 to 23, allow patients to buy more than two ounces at a time, end the requirement that patients see their doctor for a year or more of regular appointments, and establish a Cannabis Regulatory Commission to oversee the implementation of the medical marijuana program.
A separate bill to expunge the records of those convicted of low-level crimes — initially a companion to the abandoned plan to legalize adult use of marijuana in the state — was expected to be voted on Thursday as well, but was pulled from the agenda. Sweeney explained it was held due to a “drafting error” and would be put forward on June 10.
Meanwhile, a third bill — which would decriminalize possession of small quantities of pot — is also awaiting movement.
“This is not the way we intended this to go forward, we wanted all three pieces of legislation to go forward. It didn’t work out, so we’re back to the drawing board,” Sweeney said. “Medical got expanded today, it has to finish up in the Assembly and the expungement bill absolutely will be done on the 10th and we’ll go from there. Decriminalization, I’m open for conversation.”
Sweeney has also indicated that he wants to put the question of legalization on the 2020 November ballot.
Details of the changes
The amendments to the medicinal bill, snuck in on the floor minutes before the vote, require existing and pending dispensaries (called alternative treatment centers or ATCs) to submit a letter signed by a “bona fide labor organization” noting that the business has entered into a labor-peace agreement ensuring it will hire workers represented by labor unions. This language was also included in the now-defunct bill that would have legalized adult use of marijuana.
ATCs currently holding permits would have 100 days from the effective date of the bill to submit their letters. Without a letter, dispensaries could see their licenses revoked or suspended.
The amendments also revise requirements for dispensaries, noting they must maintain a price list that states medical cannabis may be “made available to patients at a reduced price or without charge in cases of demonstrated financial hardship, as that term will be defined by the commission by regulation.”
With the amendments now in place, Sweeney is hailing the expansion bill as a “California model” for moving toward full legalization, as that state also greatly expanded medical access before full legalization.
“I’ve said this over and over, this is a backdoor way of legalizing marijuana,” Sweeney said.
Concerns about cost
Indeed, the medical-cannabis program in New Jersey has been expanded to cover those who experience a wide range of pain, nausea and anxiety symptoms along with other serious conditions like multiple sclerosis — making access to marijuana fairly easy for adults.
Sen. Shirley Turner (D-Mercer) rose to speak ahead of her “yes” vote in the Senate chamber to raise concerns that even with the expansion, many New Jerseyans would not be able to afford the drug.
“I’m just concerned about the fact that so many of my constituents will not be able to avail themselves to this medical marijuana because it’s cost-prohibitive for so many of the lower-income people, the indigent, who have suffered with great pain too but they’re not going to be able to avail themselves to relieve their pain.”
Costs for medical cannabis in the state can run between $300 and $500 an ounce even before applying the state sales tax (6.625 percent) and a 2 percent transfer tax for municipalities that’s part of the expansion bill.
With the cost of a doctor’s visit factored in, that price skyrockets. In addition, because the use of cannabis is not legal on the federal front, the IRS won’t approve a deduction for it nor will most insurers provide reimbursement.
Program imposes costs on the state
One of the bill’s sponsors, Sen. Nick Scutari (D-Union) noted the tax is not ideal, but would be necessary to cover the costs incurred by the state to regulate the program. He also said the sales tax would be eliminated entirely by 2025.
“The state of New Jersey incurs a substantial cost from the administration of this program,” he said. Medical marijuana “doesn’t belong to the same regulations as the FDA so the state of New Jersey has to take on a lot of these responsibilities that the federal government normally would.”
The nonpartisan Office of Legislative Services (OLS) said only that the bill will increase annual state expenditures to oversee the program by “an indeterminate amount.”
In the past, the program has been supported by state funding as well as revenues generated by the medical program itself. In 2018, the Department of Health spent approximately $2.5 million to run the program; of that, $857,000 was appropriated from the general fund and the remainder was generated from program revenues.
Murphy’s budget for the coming fiscal year proposes appropriating $857,000 for administrative costs and $1.5 million in dedicated program-fee collections.
“It is not a perfect bill, but few bills that we vote on down here are perfect,” Turner said. “We’re leaving a lot of people in pain and misery because of the high cost of medical marijuana and also adding insult to injury by putting a tax on it as well. [But] I’m not going to let the perfect be the enemy of the good.