After the High: New Jersey Cannabis’ Journey Post-Legalization

Journey through the highs and lows of New Jersey’s Cannabis industry, two years post-legalization, and its future prospects.

In 2019, New Jersey citizens strongly voiced their support for the legalization of recreational cannabis. A staggering two-thirds majority voted in favor of the initiative. This kind of consensus is a rarity in today’s complex political climate, signifying the importance and acceptance of this issue in New Jersey.

Progress, But Challenges Remain

Two years post-legalization, the cannabis industry in the state has seen substantial growth and changes. However, it is still grappling with key challenges and questions, especially at the municipal level and concerning employer-employee relationships related to cannabis use.

Municipal Considerations

Every municipality in New Jersey was mandated to “opt in” or “opt out” of cannabis by August 21, 2021. They had to consider, permit, or prohibit by ordinance the six cannabis license types:

• Cultivation
• Manufacturing
• Wholesaling
• Distribution
• Retail
• Delivery Services

The municipal council meetings that occurred during this period were a robust demonstration of democratic principles. Despite the ongoing pandemic, citizens actively participated via online platforms, expressing their views and concerns.

Economic Perspectives

For many, the legalization of cannabis was seen as an opportunity for economic growth. Municipalities were permitted to charge cannabis companies a local tax, a move seen by supporters as a way to alleviate their tax burdens. Additionally, farmers saw potential in diversifying their crops, and local advocates appreciated the convenience of having cannabis products more accessible.

Concerns and Considerations

However, the path to embracing cannabis was not without its detractors. Many feared that allowing cannabis within their towns would negatively impact community values and were concerned that the distinctive scent of cannabis would become an unwanted feature on Main Streets. The result was a mixed response; while some municipalities embraced the opportunity, most adopted a cautious wait-and-see approach, mainly due to the absence of state regulations controlling the industry.

The Regulatory Landscape

Since then, the Cannabis Regulatory Commission (CRC), responsible for supervising cannabis operations in New Jersey, has established some regulations, bringing clarity to the legal landscape. This has led to some municipalities that initially opted out to reconsider and opt in.

Navigating the Complexities

The introduction of cannabis into the commercial and agricultural landscape is a complex process. Legal and planning professionals must be involved to navigate the dozens of considerations that arise, including:

• Licensing and Permitting: How many establishments should be allowed? How should the municipality review and approve cannabis businesses?
• Local Oversight: Should the municipality create its own local cannabis committee?
• Taxation: How should the municipality tax cannabis?

Land Use Challenges

Beyond these logistical and regulatory challenges, there are also specific land use issues related to cannabis cultivation that must be addressed:

• Water Usage: Cannabis is a water-intensive crop, requiring careful consideration in water-sensitive communities.
• Cross-Contamination: Protections must be implemented to ensure that cannabis seeds and pollen do not infect neighboring crops.

Employment Considerations in the Cannabis Era

The legalization of cannabis in New Jersey has introduced new challenges and considerations in the employment arena, particularly regarding how to handle employees suspected of using cannabis. Below, we examine some key points that employers need to be aware of:

1. Adverse Employment Actions Prohibited

The cannabis statute explicitly states that an employer cannot refuse to hire or terminate someone simply because of a positive drug test. Discrimination based on cannabis use or non-use is strictly prohibited with respect to compensation, terms, conditions, or other employment privileges.

2. Addressing Impairment in the Workplace

However, the statute does allow for adverse employment action if an employee is found to be “high” on the job. This requires the use of a Workplace Impairment Recognition Expert (WIRE) for in-the-moment evaluations. Unfortunately, the Cannabis Regulatory Commission (CRC) has yet to develop full regulations on how WIREs should operate and the required training for this role.

3. Navigating Uncertain Ground

The Interim Guidance advises that if an employer suspects on-the-job cannabis use, they should administer a drug test and assign a sufficiently trained individual to conduct an evaluation and complete a “Reasonable Suspicion Observed Behavior Report.” However, there are no concrete regulations defining who may conduct such evaluations.

4. A Careful Approach

Given the fluctuating laws and the absence of concrete regulations, handling an employee suspected of using cannabis on the job requires meticulous care. Before taking any punitive action, such as firing or demotion, employers must weigh the situation carefully to minimize the risk of litigation.

Off-Duty Use and Special Considerations

It’s essential to note that, under current laws, employers cannot prohibit the off-duty use of cannabis. However, pending legislation may alter this stance for specific professions, such as first responders and those operating heavy machinery. As this legal landscape continues to evolve, it is crucial for employers to stay abreast of proposed changes and adjust their policies accordingly.

Disclaimer: The content of this post is intended for informational purposes only and should not be construed as legal advice. Consultation with a lawyer is strongly recommended for any specific legal concerns or questions.