Insights

Coronavirus and Cannabis: New Jersey Regulatory Updates

By Elliot Choi, Jacob Setton

Apr 13, 2020

This VS Insight is dedicated to updates regarding the coronavirus and cannabis in New Jersey. For updates on other states or coronavirus-related issues, see our main post on the subject, "Coronavirus and Cannabis: Monitoring the Impact."

Cannabis regulations are in flux across the U.S. as officials at every level of government work to contain the new coronavirus (COVID-19). Vicente Sederberg is closely monitoring the situation, and we are communicating with regulators to understand how these local, state and federal responses may affect cannabis business operators, medical patients, and other cannabis consumers. We are committed to doing everything we can to keep our clients and the public updated as we learn of new developments, but please note this is an extremely fluid situation and there is a lot we do not know. This VS Insights post is for informational purposes only and not for the purpose of providing legal or tax advice. We strongly encourage you to contact an attorney if you are seeking advice regarding any specific legal or tax issue.

Latest Updates

April 13, 2020

  • Governors of Connecticut, Delaware, Massachusetts, New Jersey, New York, Pennsylvania, and Rhode Island announced a Multi-State Council to get people back to work and restore the economy. The Council will work together to develop a fully integrated regional framework to gradually lift the states' stay at home orders while minimizing the risk of increased spread of the virus.

April 8, 2020

  • Governor Phil Murphy signed Executive Order 122, requiring the cessation of all non-essential construction projects and imposing additional mitigation requirements on essential retail businesses and essential industries to limit the spread of COVID-19 in New Jersey. The additional policies that essential businesses in New Jersey are subject to, including ATCs, can be found here.

April 6, 2020

  • New Jersey Department of Health Commissioner Judith Persichilli discussed the impacts of COVID-19 on the New Jersey Medicinal Marijuana Program. A transcript of Commissioner Perischilli’s comments can be found here. Importantly, Commissioner Persichilli confirmed that ATCs will not be shut down during the pandemic and that additional regulatory solutions are being explored.

March 28, 2020

  • The U.S. Centers for Disease Control and Prevention issued a Domestic Travel Advisory for New Jersey, New York, and Connecticut, urging residents of those states to refrain from non-essential domestic travel. The advisory does not apply to employees of critical infrastructure industries, including but not limited to trucking, public health professionals, financial services, and food supply.  In addition, the Governors of New York, New Jersey, and Connecticut have full discretion to implement the advisory.

March 26, 2020

  • The New Jersey Economic Development Authority (NJEDA) Board approved a suite of new programs designed to support businesses and workers facing economic hardship due to the outbreak of the novel coronavirus COVID-19. Medical cannabis businesses are eligible for these programs. Detailed information for the new programs can be found here, which include the following:

    • Small Business Emergency Assistance Grant Program – A $5 million program that will provide grants up to $5,000 to small businesses in retail, arts, entertainment, recreation, accommodation, food service, and other services – such as repair, maintenance, personal, and laundry services – to stabilize their operations and reduce the need for layoffs or furloughs.

    • Small Business Emergency Assistance Loan Program – A $10 million program that will provide working capital loans of up to $100,000 to businesses with less than $5 million in revenues. Loans made through the program will have ten-year terms with zero percent for the first five years, then resetting to the EDA’s prevailing floor rate (capped at 3.00%) for the remaining five years.

    • Community Development Finance Institution (CDFI) Emergency Loan Loss Reserve Fund – A $10 million capital reserve fund to take a first loss position on CDFI loans that provide low-interest working capital to micro-businesses. This will allow CDFIs to withstand loan defaults due to the outbreak, which will allow them to provide more loans at lower interest rates to microbusinesses affected by the outbreak.

    • CDFI Emergency Assistance Grant Program – A $1.25 million program that will provide grants of up to $250,000 to CDFIs to scale operations or reduce interest rates for the duration of the outbreak.

    • NJ Entrepreneur Support Program – A $5 million program that will encourage continued capital flows to new companies, often in the innovation economy, and temporarily support a shaky market by providing 80 percent loan guarantees for working capital loans to entrepreneurs.   

    • Small Business Emergency Assistance Guarantee Program – A $10 million program that will provide 50 percent guarantees on working capital loans and waive fees on loans made through institutions participating in the NJEDA’s existing Premier Lender or Premier CDFI programs.

    • Emergency Technical Assistance Program – A $150,000 program that will support technical assistance to New Jersey-based companies applying for assistance through the U.S. Small Business Administration. The organizations contracted will be paid based on SBA application submissions supported by the technical assistance they provide.

March 25, 2020

  • Governor Phil Murphy signed S2304 into law that expands the State’s Temporary Disability Insurance (TDI) and Family Leave Insurance (FLI) programs to provide more workers with access to paid leave benefits during public health emergencies, including:

    • Expanding the definition of a “serious health condition” to allow individuals access to TDI and FLI benefits during a public health emergency if they must take time off of work because they are diagnosed with or suspected of exposure to a communicable disease or to take care of a family member diagnosed with or suspected of exposure to a communicable disease; and

    • Permits the use of earned sick time for isolation or quarantine recommended or ordered by a provider or public health official as a result of suspected exposure to a communicable disease, or to care for a family member under recommended or ordered isolation or quarantine.

March 24, 2020

  • New Jersey Department of Health released temporary guidance to enable faster on-boarding of new employees at ATCs. In particular, the Department of Health is permitted to offer provisional authority for applicants to be employees of ATCs for a period of up to three months if the following conditions are met:

    • The ATC has conducted a background check of the employee through a credible, third party service and supplied the results to the Department of Health;

    • The employee submits an attestation to the Department that he/she/they have not been convicted of any disqualifying conviction, that the background check results obtained by the ATC are accurate, and that the employee will submit fingerprints as soon as it is practicable; and

    • The employee is scheduled with MorphoTrak/IdentiGo to be fingerprinted. In the event an employee is unable to obtain a fingerprint appointment due to COVID-19 related business closures, the employee or ATC shall notify the Department of Health about the delay and comply with the fingerprint requirement as soon as it is practicable.

  • New Jersey Department of Health also released a certificate of waiver reducing all caregiver registration fees to $20 and a certificate of waiver allowing curbside dispensing and removing the requirement for ATCs to conduct in-person consultations for new patients.

  • The waiver for curbside dispensing is subject to the following terms and conditions:

    • An ATC may dispense to qualified patients and caregivers in their cars on the exterior premises of the ATC, including any parking lots and adjacent sidewalks that are located at the address on their permit;

    • Orders shall be placed in advance, and products shall be labeled in the ATC prior to dispensing on the exterior premises;

    • ATCs shall provide patients and caregivers with a pick-up time to reduce traffic around the ATC;

    • ATCs shall conduct an in-person visual verification of the patient’s registry ID card prior to dispensing, which may be conducted without handling the ID card, for example through a car window;

    • All transactions shall be appropriately logged in the registry and ATC inventory and shall be conducted in a secure and monitored manner in accordance with the program rules;

    • The ATC shall notify the municipality in which the ATC is located and the local police department that the ATC intends to dispense to patients and caregivers on the exterior of the ATC;

    • Prior to dispensing via curbside delivery, ATCs shall provide the Department of Health with Standard Operating Procedures for taking orders, verifying registry ID and authorization, and taking payment; logging the transaction in the registry and ATC inventory; security needed to accommodate curbside delivery.

  • The waiver for ATCs to conduct in-person consultations is subject to the following terms and conditions:

    • ATCs are only required to conduct a consultation for new patients if requested by a patient or caregiver; and

    • Consultations may be conducted by phone.

  • Governor Phil Murphy also announced the launch of an online portal to connect New Jersey residents with jobs in critical industries responding to COVID-19. The jobs portal is available here.

    • Medical cannabis businesses are permitted to post job openings using the portal.

    • Employers in critical industries, including medical cannabis businesses, should submit information about openings with urgent hiring needs related to COVID19 here.

March 23, 2020

  • New Jersey Department of Health announced regulatory changes for Medical Marijuana Alternative Treatment Centers (ATCs) to improve patient access during the state’s COVID-19 response. The changes include:

    • Waivers allowing ATCs to serve patients curbside in their vehicles. ATCs will be responsible for submitting curbside dispensing procedures to the Department of Health and notifying their local municipal governments and police departments prior to implementing any changes

    • Reducing all caregiver registration fees to $20. Caregivers are still restricted to acting as a caregiver for one patient

    • Removing the requirement for ATCs to conduct in-person consultations for new patients, unless requested. Consultations can be done over the phone instead.

March 21, 2020

  • Governor Phil Murphy signed Executive Order 107, containing new standards for businesses which are required to close, including:

    • The closure of retail storefront and brick mortar locations for non-essential businesses.

    • Essential businesses are allowed to remain open and operate during their regular business hours.

      • “Alternative Treatment Centers that dispense medical marijuana in New Jersey” are specifically included in the list of essential businesses contained in the Executive Order. Therefore, all medical marijuana dispensaries in New Jersey are allowed to remain open, so long as essential businesses are operating.

    • All essential retail businesses must, wherever practicable, “provide pickup services outside or adjacent to their stores for goods ordered in advance online or by phone.”

    • Essential businesses that choose to remain open “must abide by social-distancing practices to the extent practicable, while providing essential services.”

    • Individuals are required to stay home with limited exceptions including obtaining goods or services from essential retail businesses.

  • Governor Murphy also signed Executive Order 108, requiring that individual counties or municipalities do not impose their own regulations that in any way impede the Governor's response to the COVID-19 virus in Executive Order 107. Specifically, there cannot be any:

    • Additions or deletions from the list of retail businesses that I have deemed essential or that have been identified as essential;

    • Any limitations imposed on the scope of service or hours of operation;

    • Any density or social distancing requirements;

    • Any orders related to the gatherings of individuals; and

    • General restrictions on the freedom of movement within that county or municipality.

March 18, 2020

  • The United States Small Business Administration approved a disaster declaration for the State of New Jersey in connection with COVID-19 that makes certain small businesses and nonprofits eligible for low-interest loans.

  • Pennsylvania joined New Jersey, New York, and Connecticut in adopting a regional approach to combatting COVID-19.

  • Despite the regional approach, New Jersey has not yet deemed medical cannabis businesses as essential, unlike New York and Pennsylvania.

March 17, 2020

  • Governor Phil Murphy announced an administrative order mandating the closure of:

    • All indoor portions of retail shopping malls; and

    • All indoor and outdoor places of public amusement.

  • The administrative order did not specifically address cannabis and hemp businesses.

March 16, 2020

  • Governor Phil Murphy signed Executive Order No. 104, implementing social distancing measures to mitigate further spread of COVID-19 in New Jersey, including:

    • Indefinitely closing all school, institutions of higher education, casinos, racetracks, gyms, movie theaters, and performing arts centers

    • All non-essential retail, recreational, and entertainment businesses must cease daily operations from 8:00 p.m. to 5:00 a.m;

    • All restaurant establishments are limited to offering only delivery and/or take out-services only.

  • Executive Order No. 104 did not address specifically address cannabis and hemp businesses and whether medical cannabis businesses would be deemed “essential.”

  • Governor Phil Murphy also announced a regional approach with New York and New Jersey, including a uniform approach to social distancing and that all three states would limit crowd capacity for recreational and social gatherings to 50 people.

March 12, 2020

  • The New Jersey Civil Service Commissions issued guidelines for state employees that allowed for the adoption of flexible work programs and also waived sick leave for procedures. As of this writing, the staff of the Division of Medicinal Marijuana continues to staff the office, although the service number has temporarily changed to 844-419-9712.

March 9, 2020

  • Governor Phil Murphy signed Executive Order No. 103, declaring a state of emergency to ramp up New Jersey’s efforts to contain the spread of COVID-19 which, among other items:

    • Allows state agencies and departments to utilize state resources to assist affected communities responding to and recovering from COVID-19 cases;

    • Prohibits excessive price increases pursuant to New Jersey’s Consumer Fraud Act; and

    • Allows for the waiver of certain procurement procedures to expedite the delivery of goods and services necessary for coronavirus preparedness and response efforts.

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COVID-19, Elliot Choi, Government & Policy, New Jersey, New York, Regulatory Compliance