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The state Cannabis Regulatory Commission expanded the use of edible products to infused chocolates, baked goods, butters, jams and beverages Friday. The board also fined two of the state’s larger cannabis companies for running afoul of regulations, levying tens of thousands of dollars in fines.
TerrAscend was fined $100,000 and Columbia Care was fined $50,000 for not adhering to the state’s rules on serving medical patients and collective bargaining in good faith with labor unions. Before the final penalties were approved, CRC Vice Chair Sam Delgado had called for the equivalent of a slap on the wrist, suggesting fines as low as $1,000.
Prior to a testy debate, Jeff Brown, the commission’s executive director laid out the violations from TerrAscend, recommending a maximum $25,000 fine for not prioritizing medical patients at all three of its New Jersey locations, as required by state law.
The commission has latitude to go below or above Brown’s recommendation. Its chair, Dianna Houenou, however, increased the final amount to $100,000, saying it reflected the systemic nature of TerrAscend persistently ignoring the law.
“The investigator, in a very thorough report pointed out that there still seems to be a rampant issue with TerrAscend New Jersey and their staff — that they are simply not offering all advertised cannabis products to medicinal patients,” said Houenou, after explaining that the company was made aware of complaints dating as far back as January of this year.
“TerrAscend’s staff failed to accommodate patients as required at all three of their facilities,” the chairwoman continued. “To me this demonstrates that TerrAscend’s problem is not an isolated event, nor is it a simple mistake made by one employee.”
Delgado was the sole voice of dissent among the four commissioners in attendance, accusing Houenou’s suggestion of being “shortsighted” and calling the fine onerous. Commissioner Maria Del-Cid Kosso was absent.
“It’s going to send shockwaves throughout the marketplace,” Delgado said. “The people that will lose their jobs are not the higher ups, but rather the folks in the field, the workers, the managers — I think it would be a disinvestment,” he said.
Commissioner Charles Barker disagreed, saying large, multi-state cannabis companies know better.
“These are not new players,” he said. “These are players that have been in state after state. They know the rules. They’re also not your average small business … TerrAscend doesn’t have to fire anybody. I don’t know that this is an egregious fine compared to the business that they are.”
Columbia Care was looking at a $50,000 violation related to letting a labor peace agreement lapse. An LPA is when a company agrees to be neutral if their employee wants to join a union. Collectively bargaining in good faith is required by New Jersey legislation.
Krista Nash, a commissioner who was appointed to the board in large part for championing unions, voiced strong support for the fine against Columbia Care.
“They’ve been here a long time, and they’ve been operating in other states, we just happened to rightfully place a strong emphasis on labor, and I think people need to get that here if they want to do business in New Jersey,” she said.
New Jersey CannaBusiness Association President Scott Rudder supported the commission’s actions to expand edibles and the additional approved licenses.
“Today we saw another exciting leap forward in the progress of New Jersey’s cannabis industry. To date, the CRC has approved over 280 licenses for cultivation, manufacturing and retail in the state, creating exactly the kind of momentum we need,” he said. “These combination of events and today’s action shows that now is the perfect time to invest in New Jersey’s cannabis industry.”
The commission had more than 80 licenses up for consideration at this meeting, with more than 287 operating licenses out of nearly 1,500.
In other business:
- The much-anticipated rules for edibles should be a boon to manufacturers, who are legally the only licensed companies who can supply processed products to retail stores. Products, such as baked cookies or brownies, for instance cannot contain alcohol or nicotine, and must be ready to consume. Other rules include a limit to 5 mg of THC in single-serve beverages and manufacturing staff must be trained in food safety.
- The commission is seeking public comment on the proposed rules for clinical registrants, which are clinically focused alternative treatment centers. Clinical registrants must be partnered with an academic medical center in the region to conduct research on medicinal cannabis. Public comment period ends Oct. 6.
- Brown gave a brief synopsis of the price of weed flower going down since the beginning of the year, from $391 an ounce in January to $366 in July with prices in the medicinal market dropping even lower to $313 an ounce, or $11.18 per gram. “In new markets like New Jersey, this is good news,” he said, adding that by comparison in Massachusetts’ first two years of legalization the average price for an ounce was $400.
- In his report, Director of Diversity Equity and Inclusion Wesley McWhite III said the commission was exceeding its benchmarks when it came to inclusion of racial ownership of businesses. In some cases, he said, it exceeded the national business ownership rate for Black and Asian demographics. Hispanic ownership was consistent with census numbers for businesses, he said.
The commission also released additional info on the state’s wholesale, distribution and delivery licenses, which will become available to apply for social equity applicants on Sept. 27. Diversely-owned business can begin submitting applications on Dec. 27. All other applicants will be able to apply beginning March 27, 2024.
In a press release, the commission announced it would be doing a webinar Sept. 14 at 2 p.m. to help people through the application process.
Wholesale licenses allow the businesses to store, buy, and sell bulk cannabis and cannabis products.
A cannabis distribution license allows the transportation of bulk cannabis and cannabis products between cannabis cultivators, manufacturers, or retailers within New Jersey.
A delivery license enables transport from retail shops to consumers.
“The launch of these new cannabis business license classes represents a significant step in the continued growth and diversification of New Jersey’s cannabis industry,” Houenou said in the statement. “We now have more medicinal and recreational businesses open, so applicants for these additional license classes have a more robust industry to serve. We are committed to fostering inclusivity, empowering local communities, and providing opportunities for those typically underrepresented who want to enter the cannabis industry.”
Jelani Gibson is content lead for NJ Cannabis Insider. He may be reached at jgibson@njadvancemedia.com. Follow him on Twitter @jelanigibson1 and on LinkedIn.