Corruption in the New Jersey Cannabis Industry

New Jersey legalized recreational cannabis in 2020 with the promise of creating a fair and equitable industry that would benefit those most harmed by the war on drugs. However, the state’s current licensing process is marred by allegations of corruption and unfairness.

The Cannabis Regulatory Commission (CRC) has been vocal about its commitment to inclusion, but there is nothing in the existing legislation that requires municipalities to follow suit. This has led to a situation where some municipalities are using their power to license cannabis businesses to favor certain applicants over others.

One example is the case of Greelensky Charles, who was denied a license to open a cannabis business in Elizabeth. Charles alleges that he was asked to make financial contributions to the city in exchange for a license. His application was ultimately denied on the grounds that the proposed business would be too close to a church and that there was not enough parking.

Another example is the case of Scarlet Reserve, a company that applied to convert its already operational CBD store into an adult-use dispensary in Matawan and Aberdeen. However, their application was denied due to them being too close to a private playground located at a private daycare down the street.

Despite this, the municipality chose to go with another applicant who has a history of working with MSOs (Multi-State Opperators). This raises concerns that municipalities are favoring large corporations over small businesses, which is contrary to the spirit of New Jersey’s legalization law.

A third example is the case of Metuchen, where a lawsuit claims that the municipality scored cannabis applicants inconsistently and cherry-picked the one applicant they wanted.

These are just a few examples of the many allegations of corruption and unfairness that have been made against municipalities in New Jersey. Critics say that the state’s current licensing process is imperiling the health of the industry and undermining the promises of legalized cannabis legislation.

They are calling for immediate course correction and greater state oversight of the municipal licensing process. If the state fails to take action, they say, the cannabis industry in New Jersey will be doomed to repeat the mistakes of California, where local municipal control of the market has led to widespread charges of corruption.

Why is this happening?

There are a few reasons why this is happening. First, the state’s current licensing process gives municipalities a lot of power. Municipalities have the ability to set their own fees, licensing schemes, and preferences, which can lead to inconsistencies and unfairness.

Second, there is a lack of state oversight of the municipal licensing process. The CRC has limited power to address concerns of wrongdoing, which makes it difficult to hold municipalities accountable.

Finally, there is a lot of money at stake in the cannabis industry. Large corporations and MSOs are willing to spend a lot of money to secure licenses, which can give them an unfair advantage over small businesses.

What can be done?

There are a few things that can be done to address these problems. First, the state can provide more guidance and oversight to municipalities. The CRC could develop clear standards and guidelines for municipal licensing, and it could create a process for reviewing and approving municipal licensing schemes.

Second, the state can make it easier for small businesses to compete in the cannabis industry. The state could reduce licensing fees and provide financial assistance to small businesses. The state could also create a system of preferences for small businesses and minority-owned businesses.

Finally, the state can hold municipalities accountable for corruption and unfairness. The CRC could be given more power to investigate and prosecute wrongdoing. The state could also create a process for citizens to file complaints against municipalities.

Conclusion

The cannabis industry in New Jersey has the potential to be a major economic engine for the state. However, the state’s current licensing process is flawed and is leading to allegations of corruption and unfairness. If the state fails to take action, the cannabis industry will be doomed to fail.