Joshua S. Bauchner

New Jersey Supreme Court Holds Jake Honig Compassionate Use Medical Cannabis Act Is Not Preempted By The Federal Controlled Substances Act

On April 13 the Supreme Court of New Jersey affirmed the Appellate Division’s affirmation of the compensation court’s Order in the matter Vincent Hager v. M&K Construction. The Court decided that Mr. Hager was entitled to reimbursement through workers compensation for the ongoing costs of medical cannabis that he was recommended after sustaining a debilitating work-related injury in 2001. The Court reached this conclusion based on the explicit determination that subsequent Congressional action on medical cannabis preempted the Controlled Substances Act since 2015, and effectively legalized medical cannabis at the federal level for those operating in compliance with their own State’s medical cannabis laws. The Court directly challenged the Controlled Substances Act’s assertion that cannabis be listed as a Schedule One narcotic with “no currently accepted use for medical treatment” by identifying it as the clear option when faced with the choice between medical cannabis and highly addictive opioid painkillers due to medical cannabis’s ability to both provide pain relief and help in overcoming addiction to opioids. Hager v. M&K Constr., ___ N.J. ___, ___ (2021) (slip op. at 22).

The Court agreed that there was sufficient credible evidence that medical cannabis is “the clearly indicated option” when the two treatment options available are medical cannabis and opioids. They also agreed that “marijuana’s ability to relieve pain has been expressly recognized by the Legislature in the Compassionate Use Act.” Hager v. M&K Constr., ___ N.J. ___, ___ (2021) (slip op. at 22). In doing so, they also rejected competing expert testimony questioning medical marijuana’s efficacy and use.  Thus, denying workers compensation coverage for medical cannabis was determined to be in direct conflict with the Legislature’s intent in passing the Compassionate Use Act.

In the most recent federal Appropriations Act, Congress again explicitly prohibited the Department of Justice from using allocated funds to prevent states from implementing their own medical cannabis laws. See Consolidated Appropriations Act, 2021, Pub. L. No. 116-260, § 531, 134 Stat. 1182, 1282-83 (2020). Congress included similar language every year going back to 2015, even listing the specific States and territories protected as their number continues to grow. “These continuing riders have ‘changed’ federal law by prohibiting the DOJ ‘from spending appropriated funds’… and ‘restrict[ing] the Federal Government from superseding State law when it comes to the use of medical marijuana.’” Hager v. M&K Constr., ___ N.J. ___, ___ (2021) (slip op. at 36) (quoting 163 Cong. Rec. H311 (daily ed. Jan. 11, 2017) (statement of Rep. Rohrabacher). The Court deemed “appropriations acts as the manifested intent of the Legislature to give no effect at all to the earlier statutes, stating that ‘[t]he earlier statutes [could not] coexist with the enacted appropriation and, consequently, must be deemed [to have been] suspended by adoption of the later appropriation acts.’” Hager v. M&K Constr., ___ N.J. ___, ___ (2021) (slip op. at 40) (quoting City of Camden v. Byrne, 82 N.J. 133, 154-55 (1980).

Likewise, the U.S. Supreme Court has long held that “‘[t]here can be no doubt that Congress could suspend or repeal [an] authorization… and it could accomplish its purpose by an amendment to an appropriation bill, or otherwise.” Hager v. M&K Constr., ___ N.J. ___, ___ (2021) (slip op. at 37) (quoting United States v. Dickerson, 310 U.S. 554, 555 (1940); accord United States v. Will, 449 U.S. 200, 222 (1980).

The Supreme Court of New Jersey joins that of New Hampshire and the U.S. Court of Appeals for the Ninth Circuit in concluding that the Controlled Substances Act’s applicability to those acting in compliance with their State’s medical cannabis laws are effectively suspended so long as Congress includes similar prohibitions in future funding legislation because there is currently no direct conflict between the Controlled Substances Act and States’ laws on medical cannabis. Appeal of Panaggio, ___ A.3d ___, ___ (N.H. 2021); United States v. McIntosh, 833 F.3d 1163 (9th Cir. 2016). This suspension of the Controlled Substances Act’s applicability to States’ medical cannabis programs is expected to last for at least the current fiscal year. However, if past behavior is any indication, there is little reason to believe that Congress will change course on States’ and territories’ rights to regulate medical cannabis as they see fit.

Ansell Grimm Adds Attorney To Cannabis Law Practice Group

Ansell Grimm & Aaron, PC announces that Zachary L. Windham has joined the firm to assist in the preparation of applications for cannabis licenses in the State of New Jersey.  The addition of Mr. Windham expands the firm’s already robust Cannabis Law Practice Group, enabling it to further support its clients in licensing, corporate formation and governance, commercial leasing, contract negotiation and drafting, employee issues, capital raising and financing, and regulatory and municipal compliance.

Mr. Windham is an attorney and consultant to the cannabis industry who is widely recognized for his ability to support clients to accomplish business goals within the context of complex regulatory frameworks — including both the medical and adult-use markets, as well as industrial hemp and CBD ventures.  Mr. Windham has successfully worked with clients to win numerous local competitive license processes, guided the state license process for nearly every license type, guided clients through multi-state expansion processes, and navigated the cannabis regulatory hurdles in dozens of commercial, real estate, and acquisition agreements.

Mr. Windham is admitted to practice in the states of Colorado, Florida, New York, Oregon, and Washington. He received his B.S. in Business with a dual-concentration in finance and marketing from New York University Stern School of Business and his J.D. from the University of Miami School of Law. Prior to joining Ansell, Grimm & Aaron, Mr. Windham served as the Legal & Financial Director of a Colorado-based Marijuana Business Operator.

Ansell Grimm is pleased that Mr. Windham is bringing his extraordinary experience to service its cannabis clients.  Our dedicated Cannabis Law Practice Group stands ready to assist applicants with ensuring they are prepared when the Request for Applications is issued for adult use cannabis, as well as for additional medical licenses.  Please contact Joshua S. Bauchner, head of the Cannabis Law Practice Group, at jb@62q.f7d.myftpupload.com or (973) 247-9000 to get started today.

NJ Gov. Signs Legal Pot Bills After ‘Bungled’ Process By Bill Wichert

Law360 (February 22, 2021, 12:43 PM EST)

New Jersey Gov. Phil Murphy on Monday signed legislation to set up an adult-use recreational marijuana market in the Garden State, ending what one state senator had called a “bungled” process as the governor and legislators tussled for months over the consequences for underage possession of cannabis items.

The Democratic governor took that historic step after the Democrat-led state Legislature on Monday approved a so-called cleanup bill aimed at securing his signature on two separate bills that were passed in December to establish a regulated marketplace for selling adult-use recreational marijuana and to decriminalize the possession of up to six ounces of the drug.

Near the start of a Monday briefing on the state’s ongoing response to the COVID-19 pandemic, Murphy said he had signed the three bills and acknowledged that “this process has taken much longer than anticipated.”

“But certainly it is better to get things done right than fast and to ensure that all voices are heard and all views are considered,” Murphy said. “This process may have had its fits and starts, but it is ending in the right place and I firmly believe this process has ended in laws that will serve as a national model.”

The enactment of the legislation comes more than three months after Garden State voters in November approved by a more than two-thirds majority a state constitutional amendment legalizing cannabis for adult use, which took effect Jan. 1. Supporters of legalization have stressed the need to end marijuana arrests that have disproportionately affected people of color.

The marketplace bill will allow consumers 21 years and older to buy marijuana for personal use from licensed businesses, and it outlines provisions for taxing cannabis products. A commission tasked with overseeing the state’s current medical cannabis program will also oversee the recreational market, which will likely not be up and running until at least 2022.

The decriminalization bill will enable the possession of up to six ounces of marijuana or up to 170 grams of hashish without any criminal or civil penalties, and it will lead to reforms aimed at bringing social justice to communities hurt by the war on drugs.

But those bills are seemingly at odds when it comes to underage possession. While the decriminalization bill allows for small amounts of marijuana, the marketplace bill subjects underage individuals to disorderly persons offenses.

Murphy refused to sign the bills unless changes were made to the provisions dealing with the consequences for underage possession. Lawmakers attempted to make revisions through cleanup legislation, but such measures struggled to garner enough support until Monday’s voting sessions.

“Sixty-six percent of the voters of New Jersey spoke loudly and clearly that they want to legalize … recreational marijuana and they turned it over to this administration and this Legislature to put the process in place,” Sen. Paul Sarlo, D-Bergen, said during the Senate’s voting session.

But the administration and the Legislature “bungled this process,” Sarlo added.

Among other provisions, the cleanup legislation enacted Monday will eliminate the disorderly persons clauses in the marketplace bill and establish a three-tier warning system for underage possession or consumption of alcohol or cannabis items.

The bill also will allow for law enforcement officers to be charged with the crime of official deprivation of civil rights for “knowingly” committing violations related to underage possession or consumption of alcohol or cannabis items, such as for “requesting that a person consent to a search who is not capable of giving lawful consent.”

Noting that the bill was the result of much debate and compromise, Sen. Nicholas Scutari, D-Union — the principal architect of the state’s marijuana legalization effort — told his colleagues that “nothing is ever perfect” and “let’s not let the pursuit of the perfect be the enemy of the good.” The bill is “the best we’re going to get at this point in time.”

“I believe that the underage provisions in here offer appropriate protections for our young people … and keeping them out of the criminal justice system, again freeing up law enforcement and our judicial system to do the much more important items than dealing with marijuana claims, arrests,” Scutari said during the voting session.

As for the provisions related to police misconduct, Scutari added that “much of what’s in this bill today already exists in law.” He acknowledged that the legislation expands the type of victims who could bring the civil rights claims.

But Sen. Robert W. Singer, R-Ocean, argued that the bill “criminalizes police,” suggesting that officers will be afraid to stop underage individuals. He also blasted how the proposed warning system effectively leaves them without any consequences for using alcohol or cannabis items.

“This is absolutely in my mind a way to say, if you want to smoke marijuana if you’re underage, you can, if you want to drink if you’re underage, you can, and there’s no consequence for your actions,” Singer said.

During the Assembly voting session, assemblywoman Holly T. Schepisi, R-Bergen, echoed that point and expressed concern about “creating a culture for our children that essentially is giving them passes to go engage in bad behavior.”

“This bill…is just going to drag all of our youth, regardless of color, into the gutter,” Schepisi added.

Assemblywoman Mila Jasey, D-Essex, later countered that “possession convictions have destroyed lives” and said “it has been argued that passage of this bill will result in underage use with impunity because law enforcement will refuse to act.” The stark reality is “that enforcement power has always been disproportionately applied in communities of color,” she said.

“We cannot allow our fear of adverse consequences to outweigh the disastrous consequences of what has already occurred and, make no mistake, these consequences have fallen squarely upon the very young people who some are so stridently arguing must be protected,” Jasey said.

–Editing by Alyssa Miller.

Update: This article has been updated with additional information on the cleanup bill.

Legal Problems for NJ Medical Marijuana Licensing by Janice Kirkel

FEB 18, 2021 – New Jersey’s medical marijuana licensing process can resume after a court ruling but how it will do that is an open question.

A number of applications were rejected because of technical problems with filing. The applicants sued the state’s department of health over this, but lost.

Craig Provorny, one of the lawyers, said the department didn’t do much to try and fix the problem. “You would hope that they would fix the system going forward but who knows, in our view, in this case, it’s just tough luck, the problem is in the end we may not be getting the best pool of applicants,” he said.

Attorney Joshua Bauchner also represented those whose applications were thrown out because of computer problems. “We’ve banged our head against the wall for a year and a half now trying to understand why they just wouldn’t allow the applicants to resubmit with a certification that nothing’s changed,” he said. “Because again, there’s no dispute, these are qualified applicants and there’s no reason not to review their applications and score appropriately.”

Technical problems aren’t the only ones here. A court ruled in November that the department must change its “unreasonable” system for awarding licenses and make it more transparent. The department has yet to act and had no comment for this story.

“It really creates a conundrum for the state, because as much as I understand they’re eager to score the 2019 applications, the entire methodology and protocol for doing so has been rejected by the court,” he said.

About 150 license applications have sat around for more than a year.

N.J. court hears arguments in case that has stalled expansion of medical marijuana

Updated Feb 03, 2021; Posted Feb 02, 2021

By Amanda Hoover | NJ Advance Media For NJ.com

EDITOR’S NOTE: NJ Cannabis Insider is hosting a two-day business and networking conference March 9-10, featuring some of the state’s most prominent industry leaders. Early-bird registration is open. Tickets are limited.

A three-judge appellate court panel heard arguments Tuesday in a case that has stalled the expansion of the New Jersey’s burdened medical marijuana program.

But the court must still issue a decision before the state can reopen its review of licenses that a lawsuit put on hold in late 2019.

The case involves eight rejected medical marijuana applicants from a round of licensing the Department of Health opened in 2019. The applicants in question lost out due to technical issues with their applications or because they had insufficient documents to show the town they wished to operate in approved of the business.

But they argue the department incorrectly rejected their applications during its first round of cuts and should reconsider them along with 146 others still in the running.

“The entire purpose of this undertaking is to ensure a merit-based review so that the best and most qualified applicants are awarded licenses to serve the patient population,” Joshua Bauchner, one of the attorneys representing the appellants, said during the hearing, which was held remotely.

“There is no reason to disavow that undertaking. These applications should be scored along with the rest so that the best candidates are awarded licenses and we can proceed.”

More than 190 groups applied for 24 licenses in the summer of 2019. The licenses ranged from large operations to grow, process and dispense marijuana down to smaller businesses that would only grow or dispense marijuana to patients.

The licenses are vital not only to the 100,000 medical marijuana patients in the state who have long complained of product shortages and long lines, but to increase the amount of marijuana in New Jersey and launch a legal marijuana industry once Gov. Phil Murphy signs a bill into law.

The state eliminated 51 applicants during its first round of reviews for licenses in 2019. But several of those took issue with the decision, claiming they were denied simply because the department could not open PDFs attached to their applications.

They have called on the department to reopen their applications, but the state has declined to do so. Instead, an appellate court put the entire process on hold and stranded some 146 other applicants in limbo as those who were rejected awaited their day in court.

Fifteen groups submitted applications with corrupt files, and attorneys Tuesday argued that was a large enough proportion to indicate the technical issue lies with the department, not the filers.

But the health department disagreed. Assistant Attorney General Jacqueline D’Alessandro, who represented the department Tuesday, said an investigation revealed the state was not at fault, and noted that the vast majority of applicants had no problems with their submissions.

“Once this issue was discovered, the department took steps,” she said.

“After investigation, it reasonably concluded the issues did not lie with the department,” she said. “If there was some common compression or corruption problem, most, if not all, applicants would have had this issue.”

But Bauchner argued there was no proof the corruption had occurred on the applicants’ part, as they had taken PDFs from the state and submitted them to the health department.

It’s not the first time the health department has faced legal challenges to its licensing process. Another group of rejected applicants sued over a 2018 licensing round, arguing the scoring methods for selecting six license winners lacked a clear methodology.

A court ruled in November that the health department must change its “unreasonable” system for awarding licenses and offer more transparency going forward.

The appellants argued that point Tuesday, calling the second case “deja vu.”

Throughout the delays, Bauchner has said the applicants would resubmit their materials in a different format if given the chance by the health department. He has said the department could have asked for that at any point, avoiding the year-long delay.

“No one knew there were any problems during the submission process,” he said. “We only learned there were problems three months later.”

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Amanda Hoover may be reached at ahoover@njadvancemedia.com. Follow her on Twitter @amandahoovernj.

New N.J. legal weed compromise offered with deadline looming for Murphy to act

By Amanda Hoover | NJ Advance Media For NJ.com

Updated Jan 29, 2021; Posted Jan 28, 2021

EDITOR’S NOTE: NJ Cannabis Insider is hosting a two-day business and networking conference March 9-10, featuring some of the state’s most prominent industry leaders. Early-bird registration is open. Tickets are limited.

After weeks of fruitless negotiations on penalties for underage marijuana use and with a deadline to sign two marijuana reform bills looming, Gov. Phil Murphy and lawmakers inched closer to a compromise Thursday.

Talks resulted in a new cleanup bill to address the issue and discussions are continuing, according to two sources with knowledge of the negotiations. But they are far from becoming a done deal.

Assemblyman Benjie Wimberly, D-Passaic, plans to introduce the bill dealing with underage penalties Friday to be heard in a Community Development and Affairs Committee hearing at 2:30 p.m.

If the Legislature passed such a measure, Murphy could sign it and the two other bills legalizing (S21) and decriminalizing (S2535) marijuana into law together.

“Productive talks took place today,” according to a legislative source who was not authorized to speak publicly about the new bill. “This was a result of that.”

The bill is not yet available to the public, and it was not clear Thursday evening what provisions it contains. Wimberly did not immediately return a call seeking comment on the bill.

A note on the legislative website says the bill “revises consequences for underage possession or consumption of various forms of cannabis included in legislation passed by both Houses of Legislature.”

Murphy has remained optimistic about making a deal with state lawmakers on penalties for underage marijuana use, even as legislators have repeatedly called for him to sign the legalization and decriminalization bills they passed last month.

But if he doesn’t get the lawmakers to agree to address the issues on their own by Friday, he may issue a conditional veto.

Sen. Nick Scutari, D-Union, who sponsored the legalization bill, said earlier this week he thought it would be difficult to get a majority of senators to concur with a conditional veto.

On Thursday evening, Scutari said he may introduce a matching cleanup bill Friday if there’s agreement among other lawmakers.

He said the measure is somewhat similar to the past cleanup bill in that it would focus on civil rather than criminal penalties for at least a first offense, but did not provide further details about the plan.

While hopeful the agreement could move his landmark bill forward, Scutari said it was not a done deal.

The deadline for Murphy to act on the bills is Feb. 8.

Many expected the governor to sign the the two bills into law by the end of 2020. But days before Jan. 1, he said he would not sign either until lawmakers made changes to establish uniform civil penalties for those under 21 who use marijuana.

The current bills have a discrepancy: The legalization bill makes possession by those under 21 a disorderly persons offense, similar to alcohol. But the decriminalization bill makes possession of up to six ounces of marijuana legal for everyone, no matter their age.

Instead of issuing a veto in late December, Murphy sent suggestions back to lawmakers who then developed a first cleanup bill. It sought to establish fines for those 18 to 20 caught with marijuana and warnings for juveniles.

It seemed the compromise would finally push the measure over the finish line. But it fell apart days later when Black lawmakers unified to oppose the changes, saying they would lead to police targeting Black and brown teens at higher rates than white youth.

While the legalization bill passed the Legislature by smaller margins, both chambers passed the decriminalization bill with veto-proof majorities. Senate Democrats sent a letter to Murphy Wednesday afternoon calling on him to sign decriminalization bill into law as negotiations continue on legalization.

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Amanda Hoover may be reached at ahoover@njadvancemedia.com. Follow her on Twitter @amandahoovernj.

The 21 In Cannabis To Watch In 2021

New Jersey’s legal marijuana industry is in its embryonic stage. There is still no law on the books, and the government body charged with regulating the industry is not yet created. But there are many entrepreneurs, social justice advocates, attorneys and other professionals who are eager to help shape the mighty market that everyone expects will grow in the Garden State.

NJ Cannabis Insider developed this list of people and companies to watch as this process unfolds. We include companies with plans to expand the number of medical marijuana retail sites because they will be the first to sell to the adult use market and the market has been stifled so long. We also include people who wield influence in Trenton because so much work remains to be done at the legal and policy level.

1. Alternative treatment centers Columbia Care, Harmony Foundation and Curaleaf and TerrAscend all plan to add satellite locations to sell medicinal marijuana this year.
2. Josh Bauchner, head of the Cannabis Law Practice Group for Ansell, Grimm & Aaron in Woodland Park, has challenged the state Health Department’s licensee decisions in 2018 and 2019 on behalf of unsuccessful applicants. Some blame him for holding up the sorely needed expansion of the medicinal market. But when an appellate court decided in November the state’s process in 2018 of awarding licenses was confusing and lacking in transparency, it gave losing applicants hope they may have a shot in the future.

3. Rev. Charles Boyer, pastor of Bethel A.M.E. church in Woodbury and the founder of Salvation and Social Justice— has been and will continue to be a prominent voice for equity, influencing legislation and policy.

4. Jeff Brown, the Assistant Health Commissioner overseeing the medicinal marijuana program. has been tapped as executive director of the Cannabis Regulatory Commission, which will run both medical and adult-use markets.

5. Bill Caruso, attorney and managing affairs director for Archer Public Affairs is also a founding member of New Jersey United for Marijuana Reform. The former executive director of the Assembly Majority Office continues to advise lawmakers drafting the legalization bill.
6. Coalition for Medical Marijuana – New Jersey, the community organization that championed the law long before it gained traction in Trenton, will continue to bang the drum for home-grow. Their fight is gaining converts and attention.

7. Jackie Cornell, chief of policy and health innovations at cannabis company 1906, and Jacqueline Ferraro, VP of business development for Full Steam Staffing, have joined forces to launch the Cannabis Advisory Group, a newly formed professional organization that has already begun surveying municipalities on their concerns surrounding legalization.

8. New York Gov. Andrew Cuomokicked off 2021 by introducing a plan to legalize marijuana in his state this year. That could make New York the Garden State’s only nearby competitor in the new market, and could influence the size of New Jersey’s market.
9. Ed DeVeaux, lobbyist for Burton Trent Public Affairs, is the new president of the leading trade group, the New Jersey CannaBusiness Association. He replaced founder Scott Rudder late last year.

10. Sarah Fajardois the policy director of ACLU-NJ. She provided expert testimony in many legislative hearings in 2020. Her organization continues to advocate for racial and social justice provisions in the rollout of the enabling legislation and decriminalization.

11. Ed Forchion, known asNJ Weedman, remains a fearless trailblazer and rabble-rouser from his cannabis cafe, NJ Weedman’s Joint in Trenton. Openly selling personal-use cannabis across the street from Trenton City Hall, he will continue to push the boundaries of what the law allows.

12. Jessica Gonzalez is the general counsel for Minorities for Medical Marijuana and was a vocal advocate for equity in licensing and taxation during the passage of S21/A21.

13. Dianna Houenou, president of the yet-to-be-constituted Cannabis Regulatory Commission, worked for the ACLU of New Jersey and ran point on social justice issues involving marijuana before Gov. Phil Murphy hired her as a senior Policy Advisor in 2019. People are counting on her sensitivity and integrity to set an example for the nascent industry.

14. Janice Kovach, president of the N.J. League of Municipalities, along with Mike Cerra, the league’s executive director, will have a lot to say about what the local impact of the industry should be.

15. David Nathan, founder of Doctors for Cannabis Regulation, has rallied the members of the medical community around marijuana reform. He has proposed a system that would create uniform regulations for labeling cannabis products.

16. Tara “Misu” Sargente, owner of Blazin’ Bakery and podcaster traded her position as executive director for the NJ CannaBusiness Association for board member. She’ll remain a recognizable industry influencer.

17. Scotts Miracle-Growas the biggest financial booster of the legalization constitutional amendment. Look for this Ohio-based company to bring its hydroponic product line to the Garden State for cannabis growers.
18. Susanna P. Short,a cannabis industry consultant with iAnthus and member of New Jersey Cannabis Trade Association, emerged from behind the scenes in 2020. She’s been influential in getting the existing ATCs to work together on issues like online ordering and home delivery.

19. Beth Stavolaand iAnthus: The two are in a legal fight for control over MPX NJ, which was expected to open in Pleasantville and Atlantic City last year. A court last month issued an interim order that gave some control back to Stavola after iAnthus allegedly steamrolled the company.

20. State Sen. Troy Singleton, D-Burlington, has introduced a bill (S2875) that would allow ATCs to invest in licenses held by minorities, women and veterans. It could shape how minority licensees seek funding, and also increase the power of existing ATCs in the state. He also was instrumental in leading the behind-the-scenes conversations that led to a deal on the legalization bill in December (before it stalled again.)
21. The United Food and Commercial Workers already represents some cannabis employees in New Jersey, and represents thousands nationally. Expect the union’s relevance and interest to grow in New Jersey because the state expects operators to have “peace agreements” with unions, which say the company will agree not to oppose union activity.

— Susan K. Livio, Amanda Hoover and Enrique Lavin