Cannabis is Coming: Will NJ Be Ready?
MIDJersey Chamber hosts breakfast forum on this hot button issue
MONROE TOWNSHIP – Just one week after Governor Phil Murphy’s inauguration, a crowd of 350 individuals gathered at Forsgate Country Club to join the conversation and learn more about one of his campaign promises: legalizing cannabis for recreational use in the Garden State.
Headlined by former Philadelphia Flyer and Hemp Heals Foundation founder Riley Cote, the forum, hosted by the MIDJersey Chamber of Commerce, covered all aspects of the controversial topic – medical advantages, tax benefits for towns, long-term sustainability efforts, legal and financial responsibilities for those interested in retail licensing, and more. Cote focused on the overall benefits of the hemp plant for medicinal purposes and its use as a sustainable option for farmers, and its potential to positively impact numerous industries (think: automotive and construction).
The panel discussion, moderated by Scott Rudder, President of New Jersey CannaBusiness Association, led the audience through a timeline and legal process New Jersey will encounter if S3195 passes the Senate, a goal of Senate President Stephen Sweeney, D-Gloucester, within 100 days of the Murphy administration. But that’s just where the fun starts. Peter Kelly of Fox Rothschild LLP, the legal expert on the panel, said the current legislation is void of details in terms of regulations, but it will be a State department that will control the distribution of recreational licenses, not towns.
With the Cole Memo in 2011, and most recently the Sessions Memo, the federal government is in no rush to legalize this industry, leaving many in New Jersey and other states with their hands in the air. Businesses in states that have legalized cannabis face tough decisions in terms of banking, as banks are insured and protected by the FDIC, leaving cannabis owners high and dry. In 2016, Gov. John Hickenlooper of Colorado signed into law a bill that cut the red tape for state-chartered banks, a “better solution than having cash under your mattress”, according to Rudder. Other banks offer limited business options to cannabis owners, which include monthly charges to use their services, according to Stacey Udell of HbK CPAs and Consultants.
Much of the question and answer session centered around “when” S3195 passes, what happens next? Because of the Agricultural Act of 2014 (AKA 2014 Farm Bill), outdoor cannabis crops are not an option, which could push potential growers towards industrial space to grow product. “Property insurance for grow operations, liability insurance, and workers’ compensation, especially in New Jersey, as well as protecting your employees – these insurance areas are the last things on owners’ minds,” said Dave Berndt of Nottingham Insurance. “Growers deal with a lot of electricity, so fire insurance is big, followed closely by crime insurance from robberies.”
What’s clear is the huge potential for tax revenue from this budding industry – a reported $1 billion annually based on a recent estimate. How these taxes would be distributed remains unknown, but in other states, municipalities who allow cannabis sale reap a percentage of the taxes.
Attendees weren’t limited to those interested in opening their own retail business; some came for the sole purpose of understanding the plant better, others are tertiary business owners, such as real estate brokers and interior designers, looking to reach the future retail owners.
The MIDJersey Chamber of Commerce plans to host a follow-up event to continue the conversation. For future dates and locations, please contact the Chamber directly. For more Chamber events, click here. Today’s forum was presented by Fox Rothschild LLP and sponsored by HbK CPAs and Consultants.
PHOTO CREDIT: Distinctive Impressions