New Jersey Expands Medical Cannabis Program
- Aug 14, 2019
On July 2, New Jersey Governor Phil Murphy signed into law the Jake Honig Compassionate Use Medical Cannabis Act (the Act) which expands access and reduces taxes for medical cannabis in New Jersey. The Act includes an increase in the number of eligible medical conditions.
As of that date, there were 12 vertically integrated medical cannabis licenses in NJ -- licensed operators who could both grow and sell medical cannabis directly to patients. The Act creates individual licenses for cultivation, manufacturing, dispensary and home delivery. There is potential for up to 108 more licenses to be issued; the first round of applications is limited to 24 additional Alternative Treatment Center licenses. The Act will grant 15% of new licenses to minorities and 15% to women, veterans and the disabled.
The chart below compares access to medical cannabis in NJ before and after enactment:
|Prior to enactment||Post enactment|
|Out-of-State Patients||Not allowed to obtain cannabis treatment in NJ||Permitted to obtain cannabis treatment in NJ for a defined time period|
|Restricted to 2 ounces||Terminally ill patients: no restrictions
Other patients: restricted to 3 ounces
|Required Doctor Visits||Four times per year||Once per year|
|Recommendation Letters||Required from a doctor||Required from a doctor, physician assistant or advanced nurse|
(Nursing Homes and Hospice Centers)
|Cannot purchase medical cannabis for their patients||Can purchase medical cannabis for their patients|
The Act has taken steps to lessen the taxation burden on the NJ medical cannabis industry and established a five-member Cannabis Regulatory Commission to oversee the program. Municipalities are precluded from imposing local sales taxes larger than 2% on cannabis purchases and there will be a three- year phase out of NJ’s 6.625% state sales tax on medical cannabis.
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Benjamin Aspir is a Partner and a member of the firm’s National Tax Group, with more than 10 years of public accounting experience. He has extensive experience with IRC Section 1202 - Qualified Small Business Stock and advising cannabis clients on IRC Section 280E, within the Manufacturing and Distribution practice.
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