Cost of growing
Happy Father’s Day weekend, and a peaceful Juneteenth, everyone.
Thanks to those of you who came out to celebrate at our 2023 Awards Show last week. It was truly a night to remember! Everyone looked like a million bucks — and that after party on the rooftop was smokin’.
I had a great time hosting the event, produced by our tireless Events Team, and got to know so many new folks in the space. Can’t thank our sponsors enough: Hance Construction, McLaughlin & Stern, Tenax Strategies and Genova Burns. Without you, we wouldn’t be able to put on this show.
We have a big edition this week, lots to chew on, especially the piece by our NJ.com colleague Jackie Roman, who took a deep dive into how our industry impacts the environment. We’re also monitoring the move by state lawmakers to remove Delta-8 products from store shelves.
And, we’ve included the complete list of award winners with their own gallery of pics. It was a great pleasure and honor to hand out so many Cannys.
It’s never too early to let me know you value this type of an event. I’m looking for pledges of financial support to put on the 2024 awards show. These are our most expensive events, as you can imagine, and it’s up to you to help make them happen. Let’s make it a Jersey tradition.
Our next networking event is July 20 at the gorgeous Waves Resort in Long Branch. Cannabis Regulatory Board Chairwoman Dianna Houenou is our featured speaker. Thank you to Ewing-based CannaRemedies, a women-owned company, for sponsoring. We’ll hear more from this soon-to-open dispensary at our meetup next month. Use NJCISUB at checkout for your discount. Hance Construction and the New Jersey Business Action Center are supporting sponsors.
Also, save the date for Oct. 12 to attend our fall conference at the Double Tree Hilton - Newark Airport. That’s going to be even better than the March conference, if you can believe it. We’ll be discussing the new license categories (Wholesale, Distribution, Delivery) as well as actionable discussions you can use to expand and grown your operations. And don’t forget, we’ll have another speed-networking session so you can meet many new partners. Use NJCISUB for your discounted ticket. We also set aside a number of tickets for social equity operators at a deeply discounted price.
I’ll leave you with this family recipe Gabby Warren shared for Juneteenth celebrations, an infused red velvet cake. As she wrote, “The bloodshed, lost lives and struggles are represented during Juneteenth celebrations by using the color red in decorations, clothing and food.”
From this daddy of two, until next time…
— Enrique Lavín, publisher and editor
Harry Carpenter of Citrin Cooperman rejoices after his firm won a Canny Award. (Steve Hockstein | For NJ Cannabis Insider)Steve Hockstein | For NJ Advance
Some 300 insiders celebrated achievements in the Garden State’s cannabis industry June 8 at the NJ Cannabis Insider 2023 Awards Show in Carteret.
This event was made possible through the generous support of our sponsors: Hance Construction, our Founding Sponsor, and category sponsors and friends at McLaughlin & Stern LLP, Tenax Strategies and Genova Burns. CannaSpyglass provided gift baskets for award finalists and and to ButACake provided non-infused strips and baked good.
Over a period of two weeks businesses and individuals were nominated for their achievements by the business community. Following this two-week period, the top nominees in each category were entered into the public voting round, which garnered 24,021 votes. NJ Cannabis Insider Publisher and Editor Enrique Lavín named the five Publisher’s Choice winners.
Winners in 17 categories were handed a Canny Award. About 70 finalists received plaques to commemorate their nominations. (Recap story on NJ.com.)
Thank you to everyone who nominated and voted. We had more than 24,000 votes come in. And another thank you to our sponsors because without your continued support we wouldn’t be able to provide memorable experiences such as this.
If you’re interested in learning more about the NJ Cannabis Insider Awards or would like to sponsor the 2024 event or a category, contact publisher Enrique Lavín.
— NJ Cannabis Insider staff
New NJSBA Cannabis Law Committee co-chairs Sarah Trent, an attorney and owner of cannabis dispensary Valley Wellness and Daniel McKillop, a parter new at Scarinci Hollenbeck, where he chairs the Cannabis and Psychedelics Law Practice Group. Mollie Hartman-Lustig, a partner at McLaughlin & Stern, where she chairs the Cannabis Practice, was named secretary.
The New Jersey State Bar Association recently installed its new co-chairs of the Cannabis Law Committee, Sarah Trent, an attorney and owner of cannabis dispensary Valley Wellness, Daniel McKillop, a partner at Scarinci Hollenbeck, where he chairs the Cannabis and Psychedelics Law Practice Group. Mollie Hartman-Lustig, a partner at McLaughlin & Stern, where she chairs the Cannabis Practice, was named secretary.
Here are some analysis points on things to keep in mind about expungements.
Expungement clinics have now become a staple of the cannabis industry, but where they go from here is going to be critical. Expungement clinics are no longer just about expungements — they’re also becoming about connecting community members with other vital resources. Those things can include food pantries, IDs and even job fairs.
This dynamic brings expungement clinics into a larger conversation about how they can be parts of the community in terms of rendering invaluable services that others would be hard pressed to find in a unified format. The War on Drugs created and contributed to its fair share of economic inequality, but economic inequality is a multi-pronged apparatus with multiple solutions.
For example, offering second language services and culturally competent forms of programming will also define what expungement clinics look like depending on the community they touch down in.
Beyond language and culture, not all communities have the same economic challenges. One community may be more interested in environmental issues and another may be providing a know your rights clinic. Some may want to do both. The options for customization run the gamut.
In the same way that the cannabis industry social equity goals claim to be the tip of the spear in a wider conversation about corporate social responsibility, expungement clinics can spur a larger conversation about what integrated community engagement looks like.
The cannabis industry is demanding data on social equity and diversely owned businesses on both the state and municipal level. There are also industry stakeholders that are interested in expungement data.
How many expungements are being done within each county and how far has the state gotten with any backlogs is going to be of interest.
It’s important to know that the reason why expungement clinics came about is because the average person may often find it hard to navigate the bureaucracy that’s necessary to get the expungements done.
The entire end game is to get to a point where there are no more expungements that need to be done.
How close everyone gets to that end game is going to require the collection of data, but when that data is collected, it’s also going to need to respect the privacy for whom those records are expunged for.
Doing education on what cannabis and intoxication looks like is going to be one of the more scientific developments within the cannabis space that comes at the intersection of civil rights and labor law.
On one end, the state Supreme Court is currently deciding how police officers are going to determine intoxication. On another end, employers are trying to find a way to determine whether or not employees are intoxicated with cannabis on the job.
What that looks like, especially when it comes to due process provisions that are put in place by powerful unions are going to be a legal development to follow.
Another factor that’s going to come into place here are the rights of medical patients and the overall concept of impairment.
We currently live in a society that doesn’t criminalize all impairments, but is particularly harsh on drug impairments when it comes to legal ramifications. That being said, there are medical patients that have debilitating medical conditions that without administering cannabis would render them unable to use fine motor skills to do a variety of tasks — in an of itself a form of impairment. This can put some in a legal spectrum of ‘impaired if you do, impaired if you don’t.’
How the rights of those patients are respected and whether an intoxication process can take into account the nuance of someone that needs cannabis to survive is also a healthcare debate.
There was supposed to be a task force on a better way to measure cannabis impairment when the New Jersey law was put into effect.
It hasn’t been formed or announced yet, but it will have to sooner or later.
The CRC has a lot on its plate, although it’s hard to see how a task force gets established without the Supreme Court having it say first.
All of that being said, there was also supposed to be a similar task force across the Hudson in New York.
New Jersey and New York are both home to robust public university systems and Ivy League universities.
Another high-profile legalized state is close by in Massachusetts with its fair share of research power, as well. There’s already one example in Boston that was used by researchers as a way to peer into someones’ brain using imaging.
Once all of these task forces get started, both state and multiple cannabis commissions could use those task forces to create a larger regional one to engage in a better way to research cannabis impairment.
These regional commissions could also have the potential to end up exercising a large amount of influence when it comes time for federal legalization.
Whether it’s the statehouse or the federal legislature, there’s going to be a lot of research thrown at legislators from competing parties with competing agendas.
One of the most influential pieces of research and data, could be data that comes from the government itself. It won’t be the only data in the room when fed legalization comes, but in the same way that drug impairment has been brought up as a state by state issue, it’s also going to be brought up in the federal legalization debate.
With all of the talk of expungements, that also brings up the continued call for pardons from the Governor’s office.
The Last Prisoner Project mounted a campaign calling for pardons because it considered the pardon process to be a lot quicker than a political one involving the Legislature coming up with a new bill.
It’s important to keep in mind that expungements tend to deal with low level offenses and not large scale ones. Rev. Charles Boyer also indicated his dissatisfaction with that in a previous interview.
Throughout the cannabis legalization effort, there’s going to be a continued call to expunge all non-violent cannabis offenses as well as small-scale ones.
The political will for that and whether it comes from the Legislature or the governor’s office is going to be something to monitor.
— Jelani Gibson
Smrita Choubey is hoping to get approval to grow cannabis out doors at Veda Farms in Frelinghuysen Township. They are in the process to get permitting from state and local authorities to become an outdoor cannabis cultivation site. May 25, 2023Amanda Brown| For NJ Advance Med
Smrita Choubey left her corporate job to follow in the footsteps of her family in India by bringing together farming and traditional healing. So, she jumped into New Jersey’s budding cannabis industry.
But, she didn’t want to be one of the big indoor growers who “use as much electricity as a whole town.” She wanted to grow her weed outside on a Warren County farm, using the sun and rain.
That was five years ago.
Choubey has been held up fighting for local and state permits to grow cannabis outdoors — a method of weed production that farmers and researchers say creates less environmental pollution and uses significantly less energy.
One year into the legal cannabis industry, there are still no outdoor cannabis farms in New Jersey. In an industry where barriers to entry are already notoriously high, Choubey said there are few people willing to spend the time and money to try to get permission to cultivate outdoors, despite its sustainability and benefits to the environment.
“We’re the only ones — because it’s so hard,” Choubey said.
For a product long associated with the social and environmental justice movement, cannabis actually creates a lot of environmental pollution, experts say. Studies have found the production and distribution of cannabis requires a substantial amount of energy, emits greenhouse gases and generates significant waste with plastic product packaging.
“Cannabis is really meant to be grown outdoors, to be the most sustainable,” said Robert Mejia, adjunct professor of cannabis studies at Stockton University.
There are places where cannabis grows wild — Northern California, Mexico, Jamaica, Panama — and that’s really where the plant is meant to grow outdoors, Mejia said.
“So, what happens in a lot of the different states that have similar weather to New Jersey, is that we grow it indoors, and as soon as you bring it indoors, you’re bringing in a lot of issues with sustainability,” Mejia said.
Indoor cannabis cultivation is energy-consuming, mainly due to heating, ventilation, air conditioning, and lighting needed to grow the plant indoors. A typical industrial grow facility can be the size of several football fields and have thousands of plants at various stages of growth in a warehouse-like building lined with fans, bright lights and irrigation equipment.
The average industrial facility is also likely to pump in thousands of gallons of water a day. All of the energy consumption leaves a sizable carbon footprint, researchers say.
Indoor cannabis cultivation in the U.S. results in greenhouse gas emissions of between 2,283 and 5,184 kilograms of carbon dioxide per kilogram of dried flower, a 2021 research study by University of Colorado researchers found.
It’s unclear how much power and water New Jersey’s legal cannabis industry has been using since it was legalized last year and expanded to 17 growers. The state Board of Public Utilities does not track energy utilization for the cannabis industry specifically, a spokesman said.
The Cannabis Regulatory Commission, which regulates the state’s medical and recreational marijuana industries, does not collect the data either. But, the governing body does attempt to minimize environmental impact through its regulations, a spokeswoman said.
License holders are required to “implement a plan to increase sustainability in its operations” that may include: a waste reduction plan, a water usage reduction plan, sustainable packaging or the use of renewable power.
Although there are no outdoor farms growing legal weed in the state, the Cannabis Regulatory Commission is not against it and welcomes the idea, officials said.
“We understand that outdoor cultivation is less expensive, more sustainable, and more environmentally friendly. Our regulations allow for outdoor grow, and we would look forward to seeing licensed cultivation businesses start growing outdoors,” said Christene Carr, the commission’s spokeswoman.
In other states, researchers say the cannabis industry is leaving a big environmental footprint.
Indoor cannabis cultivation facilities in Massachusetts, where recreational marijuana has been legal since 2016, are responsible for 10% of all the state’s industrial electricity use, according to the Northeast Sustainable Cannabis Project.
“So, this means that just as other industries are working hard to curtail their climate impact, energy-intensive indoor cannabis has come along to undermine the Massachusetts goal of reducing greenhouse gasses emitted,” said Sanford Lewis, general counsel for the Northeast Sustainable Cannabis Project, in a 2021 interview with Worcester Business Journal.
A study in the Journal of Cannabis Research also found that cannabis plants emit a significant amount of biogenic volatile organic compounds, which could cause indoor air quality issues.
But, growing outdoors presents its own set of problems. Odor is a major reason for community skepticism around marijuana cultivation facilities, both indoor and outdoor, industry officials say.
Earlier this year, the township council in Galloway in Atlantic County declined to provide a letter of support to a hopeful outdoor cultivator hoping to get a license from state marijuana regulators. The denial followed residents’ concerns about the odor that could come from a marijuana farm, the Press of Atlantic City reported.
Security, soil erosion, water diversion and chemical runoff are among the other concerns frequently cited by opponents to outdoor grow.
Choubey, the entrepreneur hoping to start a farm in Warren County, said she addressed many of the concerns about outdoor marijuana farming while appearing before the land use board in Frelinghuysen in December. She was asking for a land use variance to grow cannabis on a property in the township.
She is in the final stages of purchasing 254 acres of farmland in Frelinghuysen, a township with many farms and a population of roughly 2,000 people, according to the latest census. The farm will serve as headquarters for her holistic wellness company, Veda Farms, which aims to harness the medicinal uses of cannabis.
The barn at Veda Farms in Frelinghuysen Township was once used for dairy. If the state and local permits are allowed, it will be used to process and store cannabis. May 25, 2023Amanda Brown| For NJ Advance Med
Choubey was born and raised in suburban New Jersey, but her family has owned farmland in India since the 1800s. They taught her an appreciation for ancient medicinal practices, such as Ayurveda, which focuses on a natural and holistic approach to wellness, she said. Growing marijuana outdoors in a pesticide-free, organic environment is a central part of Choubey’s business philosophy.
“We want to revive the ancient medical uses of cannabis,” Choubey said.
Over the course of 12 hours and three public meetings, Choubey explained the mission of Veda Farms and provided public testimony on the biggest concerns with the outdoor growing of weed. Afterward, she was approved for a land use variance to grow cannabis on 3 acres of her farm.
But, Choubey still has obstacles to face before she can put plants in the ground. She needs to go back to the land use board for site approval and then get a resolution passed by the township committee explicitly allowing Veda Farms to grow cannabis outdoors. Frelinghuysen’s township ordinance currently only allows indoor and greenhouse cultivation.
Simultaneously, Choubey is still in the process of getting Veda Farms fully licensed by the state Cannabis Regulatory Commission.
It has been frustrating, she admits. While she’s spent years trying to get permission to grow cannabis on an environmentally-friendly outdoor site, Choubey has seen others get licensed to build one-acre farms indoors with hundreds of lights and water-intensive hydroponics.
“Can you imagine the electricity use?” Choubey asks. “Why are we doing that when the sunshine is free?”
Despite the lengthy process, Choubey said she remains hopeful.
“I do think that they want to work with me, but everyone is figuring this out from scratch,” Choubey said.
Growing marijuana in New Jersey is nothing new. Cannabis has long been grown illegally in gardens, window sills, basements and in remote areas.
But, it became legal to sell marijuana for medicinal purposes in 2010 and for recreational use to adults last year. The new industry came with a complex set of regulations.
Cannabis businesses must apply for a license with the Cannabis Regulatory Commission in order to engage in any commercial cannabis activity, including growing plants and selling products. New Jersey is one of the few states with legal weed that does not allow people to grow marijuana at home. It remains a felony to grow cannabis without a license.
New Jersey’s regulations include few rules about how sustainable commercial growers must be or how much electricity and water they can use.
Only a portion of Veda Farms in Frelinghuysen Township acreage will be used to grow cannabis. Some fields will be used to grow other crops. They are in the process to get permitting from state and local authorities to become an outdoor cannabis cultivation site. May 25, 2023Amanda Brown| For NJ Advance Med
In the same year New Jersey implemented what is widely considered the country’s strictest ban on plastic bags in an effort to cut down on single-use plastics, the state also launched a new industry that introduced a whole new waste stream of single-use plastics.
Practically every cannabis product comes in a plastic package, whether it’s a cartridge, edibles, or just a plain flower. This is largely due to the strict health and safety regulations around cannabis that require specific labeling and tamper-resistant packaging, industry officials say.
New Jersey cannabis law states all packaging for cannabis items must: be fully enclosed, opaque, of a single color, and light resistant; be child-resistant; protect the product from contamination; and be able to be resealed in a child-resistant manner unless the package contains a single serving cannabis item.
Dispensaries must also place all purchases inside a separate bag before a customer can leave the store with their cannabis products.
A report from the Canadian Broadcast Corporation, Canada’s major public broadcasting company, found that for each gram of cannabis sold in that country, as much as 70 grams of plastic waste was generated.
In 2018, Canada’s first year of legalization, it’s estimated that between 12.7 million and 14.1 million pounds of plastic from cannabis packaging ended up in landfills, according to a study from environmental services company [Re] Waste.
Users who want to limit their waste by buying in bulk will find it impossible, given regulations only allow dispensaries to sell someone the equivalent of one ounce of cannabis. And recycling is complicated by the added cost of decontaminating containers before re-use.
In New Jersey, the Cannabis Regulatory Commission “attempts to address environmental impacts through its regulations,” a spokeswoman said.
Prospective cannabis businesses are required to submit an “environmental impact plan.” Additionally, the Cannabis Regulatory Commission requires a license holder to properly dispose of cannabis waste and hazardous waste.
The requirement for an environmental impact plan is important, but it’s not the same as industry-wide requirements and environmental standards, said cannabis consultant Spencer Belz.
“As we have seen with other things that these companies are doing, there’s easy ways to make it seem like they’re moving forward but not actually doing anything. Or they’ve done the research and there’s just no viable options for them,” said Belz, owner of Last Mile Cannabis Consulting.
Some of the biggest sellers of legal cannabis in New Jersey — Curaleaf, Ascend Wellness Holdings, and RISE parent company Green Thumb Industries — either did not respond to inquiries about their sustainability efforts or declined to comment. But all three companies have information about sustainability efforts on their websites.
Curaleaf, the largest grower and seller of legal cannabis in New Jersey and one of the biggest in the nation, is auditing its practices to identify new areas for improvement and “partnering with consultants to find eco-driven solutions to lighten our footprint,” according to the company’s website.
Ascend Wellness Holdings is using biodegradable packaging for the second phase of its new product line—Simply Herb, according to a press release. And Green Thumb Industries has environmental stewardship initiatives focused on creating new sustainable packaging and using less energy.
But in order to harvest true sustainability in the cannabis industry, Belz said, “the CRC or the state government itself should absolutely impose some regulations on these operations.”
When asked if the Cannabis Regulatory Commission plans to add tougher environmental requirements on the cannabis industry, a spokeswoman said the governing body addresses environmental impacts through its regulations.
Though companies must present a sustainability plan, the commission does not currently offer any incentives for the cannabis industry to save energy, reduce waste or minimize pollution, a spokeswoman confirmed.
Through New Jersey’s Clean Energy Program, new indoor horticulture facilities can receive incentives for installing energy efficient measures. But, there are no programs specifically and solely for cannabis facilities, a spokesman said.
State laws require that at least 70% of all tax revenue from recreational cannabis sales be earmarked for investment in “impact zones,” defined as cities with high crime indexes and unemployment rates for their population. But, none of that money goes toward sustainability programs or environmental research, officials said.
“There’s plenty of waste in all corners of capitalism in the world. And the cannabis industry is supposed to be different than the rest,” Belz said.
This story was produced in collaboration with CivicStory as part of the New Jersey Sustainability Reporting project. It will publish on NJ.com and The Star-Ledger in the coming days.
— Jackie Roman | NJ.com
Back row from left: Julio Casado, Claudia Granados, Stella Binkevich, Jordan Bruselof, Ashley Robins, Matt Swulinski, and Kirill Satanovsky. Front row from left: Migna Guzman, David Kang, Padmaja Malladi, and Stephanie Kim Chohan, Councilmember at Highland Park Boro.
Several cannabis retail stores have been approved by New Jersey to open this year. NJ Cannabis Insider is putting a spotlight on these licensed cannabis businesses.
ANJA is a Highland Park-based adult-use dispensary located at 225 Woodbridge Ave. in Highland Park. The minority-owned recreational dispensary plans to open sometime midsummer this year after receiving local approval in February.
Chief Executive Officer Julio Casado heads up a team that aims to emphasize plant education and local cannabis culture. Leadership brings a range of plant advocates and professionals together, with previous careers in management consulting, real estate investment, e -commerce, government affairs and several others.
Alongside Casado, who provided answers for this interview, ANJA’s leadership includes Chief Financial Officer Migna Guzman, Chief Operating Officer Kirill Satanovsky, and Chief Wellness Officer Padmaja Malladi, all of whom are partners. Rounding out the group of partners are: David Kang and Claudia Granados.
This Q&A has been slightly edited.
Q: How do you separate your company from the competition?
A: ANJA is local, homegrown and draws from a diverse expertise from all the founders from their previous walks of life. The team is a differentiator and so is our commitment to honest education on cannabis.
Finally, Highland Park is the best home for cannabis in New Jersey due to its culture and embrace of cannabis.
Q: How are you funding your startup costs?
A: ANJA is self funded by its founders, friends and family. To date we have invested nearly $2 million in real estate, legal, marketing and staffing.
Q: What are your company’s biggest challenges since winning your annual?
A: The biggest challenges facing independent dispensaries include funding. There are high barriers to entry to cannabis and a lack of availability in funding. Traditional lenders and investors, especially in the financial sector, are not able to invest in cannabis because of the regulations.
The lack of clarity from the Cannabis Regulator Commission on timelines, and lack of consistency in meetings by the CRC makes it difficult to manage cash flow and the overall timeline to open. At a minimum, dispensaries will need to sit for over two years before opening. This is an untenable situation for the vast majority of operators.
Since this is a new industry, there is a high level of uncertainty in execution. Managing this requires careful planning and support. The lack of available industry benchmark data makes it even more difficult to succeed.
And the entire supply chain is dependent on MSOs (national corporations) and their willingness to sell to us at reasonable wholesale prices. They have an incentive to not work with us since they also all many dispensaries.
Q: What can the market do better to help a business like yours?
A: The most helpful thing for businesses like ours is to provide more clarity around timelines, decrease the timeline significantly through increased output by the CRC, and provide relevant industry benchmark data so companies can better plan and project success.
Q: Where do you want to see the market in 5 years?
A: In the next five years I expect federal legalization and massive consolidation of businesses nationwide, as MSOs look for scale and efficiency. Ideally, I would like to see the market be more restrictive in where any one company can operate from a vertical perspective, i.e. eliminate vertical integration. This will protect smaller operators and give them an opportunity to succeed and scale.
Lastly, I would like to see bigger brands from the Northeast US, and see the impact of those brands reach the national stage.
Q: Why did you choose to get into the cannabis industry?
A: I’ve been around cannabis my entire life, both culturally and in my community. I was a casual user for most of my life and shifted to being a more consistent consumer in my late 20s as I transitioned away from alcohol. Ultimately, cannabis and therapy helped me completely eliminate alcohol from my life, which propelled me to find more success in both my personal and work life. This experience really helped me earnestly believe in the power of the plant to help people struggling with substance abuse and addiction.
Cannabis is truly a wonderful and incredible plant that provides fun and healing. ANJA is an opportunity for me to share this knowledge with our customers.
Q: What is your community impact plan?
A: ANJA has already started working with the community, even before opening. We are looking to provide the community with: Fun and educational events for community gathering, proper and honest education on the benefits and risk of using cannabis, support for social justice activities including expungement clinics, and employment for community members–cannabis is local.
— Andrew Ward | For NJ Cannabis Insider
Kate Sherlock is a partner at Archer & Greiner, in Haddonfield, where she regularly counsels cannabis clients on the ability to use and register trademarks and prepares licensing agreements. Find her on LinkedIn or at [email protected].
Most U.S. companies protect their brand, or trademark, with a federal trademark registration. In the United States, in order to obtain a federal trademark registration, an applicant must first demonstrate lawful use of the trademark in commerce.
In other words, if a product or service marketed and sold under a trademark cannot be legally sold in the United States, the trademark cannot be federally registered.
While medical cannabis is legal in 40 states and recreational cannabis is legal in 23 states and the District of Columbia, possession of cannabis is still illegal at the federal level–it is classified as a Schedule I drug under the Controlled Substances Act.
Accordingly, owners of trademarks used in connection with cannabis-related products and services cannot establish lawful use of those trademarks in interstate commerce, which precludes them from obtaining a federal trademark registration.
Despite the inability to register cannabis trademarks at the federal level, cannabis entrepreneurs have several alternative options for growing and protecting their cannabis trademarks.
First, as with all trademarks, cannabis entrepreneurs should choose a distinctive mark that is not currently being used in connection with cannabis related goods or services. Cannabis business owners should conduct a search of United States Patent and Trademark Office (USPTO) records, in addition to common law uses, to aid in selecting a mark with a low infringement risk.
Because U.S. trademark rights are based upon use, not registration, it is important that a trademark clearance search extends beyond USPTO searches to include broader internet and social media searches. Entrepreneurs should also be mindful of any state restrictions on branding before selecting a mark. For example, in New Jersey, a cannabis business cannot use branding or trademarks that may be attractive to children.
Second, cannabis entrepreneurs should consider seeking federal trademark registration for federally-lawful peripheral goods and services, such as blog or consulting services on the topic of cannabis, vaporizers, glassware, or certain lawful CBD products under the 2018 Farm Bill.
Because trademark rights prohibit others from using confusingly similar marks in connection with similar goods and services, obtaining a registration for your mark in connection with related goods and services may provide trademark owners with some brand protection.
Additionally, a federal registration serves to put third-parties on notice that you are using a certain mark in connection with cannabis-related goods and services and may serve to dissuade third parties from adopting your mark, or a similar mark, in connection with their cannabis-related goods and services.
Third, cannabis entrepreneurs should consider seeking state trademark protection. While cannabis is illegal at the federal level, it is legal in numerous states, including NJ, and therefore eligible for state trademark protection.
While a state trademark applicant seeking to register a mark for use in connection with cannabis does not face the same “lawful use” hurdles facing a federal applicant, a state registration has other limitations. State trademark rights do not extend beyond the state’s borders, so the protection afforded under a state registration is far narrower than that under a federal registration.
Additionally, each state has its own filing requirements, which can be quite complicated or onerous. A trademark must be in use in the applicable state prior to filing an application, whereas at the federal level, an applicant can file an application based upon its intent to use a mark within the next three years.
Finally, cannabis entrepreneurs should ensure their contractual agreements adequately protect their intellectual property, including their trademarks.
With more states legalizing recreational marijuana, new business opportunities are popping up for cannabis businesses through distribution and licensing deals.
To prevent third-parties from claiming ownership rights to your trademark, you should have agreements in place that assert ownership rights in the subject trademark(s) and prohibit licensees from challenging such rights or using the licensed mark(s) or other IP outside the permitted use set forth in the agreement.
In addition to minding the guidance above, cannabis entrepreneurs should consult with a licensed attorney in their state to assist them in selecting, protecting, and maintaining trademark rights, and mitigating risks of infringement.
Interested in sharing your insights? Submit a 600-word Guest Column to [email protected] for consideration.
By Rob Mejia, a regular contributor to NJ Cannabis Insider, is a teaching specialist at Stockton University where he teaches the cannabis courses. He is also the author of “The Essential Cannabis Book” and “The Essential Cannabis Journal.” His cannabis education company is called Our Community Harvest.
Last week’s NJ Cannabis Insider 2023 Awards show attracted license applicants, operators, consultants, service providers and educators. This meant the level of conversation was focused and serious.
Here is what New Jersey cannabis insiders are talking about:
Based on conversations, research and reviewing other state’s cannabis markets, here’s my take on those issues:
The New Jersey Legislature is moving quickly to ban Delta-8. This action is welcomed by some and opposed by others.
On one side, those who want to ban Delta-8 (and other unregulated cannabinoids), such as New Jersey CannaBusiness Assn.’s chair of its Hemp Committee, Brett Goldman, points out that Delta-8 “raises a significant public health concern” because product is not tested.
Brett also maintains that the lack of federal and state enforcement encourages companies to brand “vapes…loose flower and pre-rolled joints as well as edibles with packaging that mimics mainstream brands.”
But the flipside is that Delta-8 has helped keep some CBD shops and hemp farmers in business. The CannaBoss Lady Jill Cohen, who won a Canny Award last week, said: “If they ban Delta-8, it’s really going to hurt our business.”
For her, it is a simple equation of supply and demand — and Delta-8 is one of their most popular products. Delta-8 represents sales opportunities for hemp farmers who have been challenged at every turn.
We’ll have to see if the Legislature during the hearing process finds a middle ground, or these operators have to pivot to stay afloat.
The number of management and investment deals that are not making it to the finish line has emerged as another big concern.
The main problem is that deals were made months ago, and company valuations have decreased, which opens up further negotiation. In some cases, desperate would-be operators take a lesser deal or walk away hoping for financing from another source.
Look for this issue to slow the opening of many potential cannabis businesses.
Chatter was intense about the three new classes of cannabis licenses opening in September: Wholesale (aka Warehousing), Distribution and Delivery.
While this news was welcome, there is debate about whether Commissioner Charles Barker’s proposal to leave these categories open for social equity applicants for a year is good policy.
The opposition points out that this proposal neglects women-owned businesses, minority-owned businesses, and veteran-owned businesses, many of whom were also harmed by the War on Drugs.
There is also concern that Barker is missing the main issue: acquiring the license is not the step that stops social equity candidates. It is the next steps which involve securing real estate, working with municipalities, getting financing and having the skills to operate a successful business which are the primary issues that need to be addressed.
The call for the establishment of a cannabis edibles market — including such popular items in other states like chocolates, baked goods, savory snacks, and fast-acting infused beverages — is getting intense.
Medical patients who do not want to smoke, cooks, bakers and dispensary operators are some of the most impassioned proponents for edibles.
Edibles represent a healthy consumption option, business opportunities and a new category of products that will undoubtedly be in demand. Our New Jersey cannabis market needs to catch up with other states.
There were other issues raised that I will cover in future columns.
Prof. Mejia’s Weed Corner is a regular column for NJ Cannabis Insider, focusing on news, trends and innovation in the local cannabis market. Reach out to him at [email protected]
A sign outside a gas station in New Jersey advertises Delta-8 tetrahydrocannabinol products for sale.Paul Mulshine file photo | For NJ Advance Media
After compelling testimony from a Washington Township father whose underage son got intoxicated and fell ill from eating candies containing Delta-8, state lawmakers want New Jersey to ban unregulated products that sell concentrates of the cannabis chemical.
“I was shocked these products were in our local stores,” said Michael Gillespie, father of the 14-year-old who purchased a packet of candy containing 600 milligrams of the chemical — an amount considered high dosage even for adults. Gillespie, a volunteer firefighter, went on to describe how he and first responders searched for his son for nearly 11 hours before finding him suffering from hyperthermia in the woods.
Gillespie testified his son had felt paranoid, dizzy and disoriented soon after eating the Sour Gummy Sharks he bought at a local convenience store. Products like these tend to have the same colorful packaging as non-infused candies, and they’re seemingly available at just about every convenience store or gas station in the state.
“My wife and I hugged him and cried in between the doctors and nurses treating him,” he said. “The bloodwork fully tested positive for THC.”
A state Assembly committee unanimously voted to move the bill (A4550) forward last week and the state Senate introduced a companion bill last Friday. The companion bill received a unanimous vote in the Senate Law and Public Safety Committee yesterday.
Assemblyman Paul Moriarty, D-Gloucester, one of the bill’s sponsors, said he wants an executive order to ban the product while the legislation make its way through the state Legislature.
“I actually am also working with the governor’s office because I believe that this is such an imminent threat that these should be removed through an executive order through the Health Department or the Lottery Commission that sells lottery tickets and almost all of these convenience stores should step in here,” Moriarty said at last week’s hearing.
The companion bill was advanced by state Senate Majority Leader Teresa Ruiz, D-Essex, one of the senators who helped mold New Jersey’s current cannabis legislation alongside Senate President Nicholas Scutari.
“Delta-8 products are being sold all over the state, in gas stations and corner stores, with absolutely no oversight,” said Ruiz in a statement.
“This legislation will make it clear that Delta-8 has not been tested or endorsed as safe for public consumption,” she said.
Legal cannabis traditionally contains Delta-9 THC as the primary ingredient customers engage with, which is still illegal at the federal level, but due to legal loopholes, products that contain only Delta-8 THC can still be sold unless there’s state legislation that specifically bans it.
The unmanufactured form of Delta-8 has milder effects than what is found in its counterpart, so in order to get an intoxicating effect, products often require an intense amount of manufacturing. That process can still create a milder product, but can also increase potency and introduce additional chemicals that are not fit for human consumption.
“It’s the bathtub gin of the cannabis space and it’s being sold to kids without any of the restrictions or product safety regulations required under New Jersey’s recreational adult-use cannabis law,” said state Sen. Declan O’Scanlon, R-Monmouth, a co-sponsor of the Senate bill.
“Delta-8 tetrahydrocannabinol, also known as Delta-8 THC, is a psychoactive substance found in the cannabis sativa plant, of which marijuana and hemp are two varieties,” says a summary from the Food and Drug Administration official website. “Delta-8 THC is one of over 100 cannabinoids produced naturally by the cannabis plant but is not found in significant amounts in the cannabis plant. As a result, concentrated amounts of Delta-8 THC are typically manufactured from hemp-derived cannabidiol (CBD).”
Industry insiders have criticized the products because some manufacturers have used the chemical to infuse products as a way get around cannabis licensing.
One of the state’s largest cannabis trade groups, the New Jersey CannaBusiness Association, supported the measures.
“It is shocking to see Delta-8 and other unregulated, untested cannabis products being sold at convenience stores and gas stations all across the state,” said NJCBA interim-President Scott Rudder. “What’s even more disturbing is the ease with which children are purchasing these unregulated products.
Rudder compared the scenario to adverse effects associated with vaping, where the products came under national scrutiny for underage sales and the chemicals that that were being used to make the product.
“We spent years in New Jersey trying to end stigmas and debunk false narratives around cannabis and cannabis culture,” said Bill Caruso, NJCBA’s general counsel and a cannabis lobbyist. “This was all done with the goal of establishing a safe, regulated market in New Jersey. Allowing access to Delta-8, particularly among children, completely undercuts that effort. As a father of young children and as a passionate advocate for the cause, I hope every legislator will support this bill.”
— Jelani Gibson
This story first appeared on NJ.com for subscribers only.
Screenshot of the CRC dispensary listings page.
New Jersey now has 31 dispensaries selling recreational cannabis, many after starting as medicinal cannabis businesses.
“It is a milestone for the agency and for the market,” said Jeff Brown, executive director at the New Jersey Cannabis Regulatory Commission. “Over the last two years we have grown the number of ATCs open to patients and overseen several of them through to expansion into recreational cannabis. Now retailers are opening exclusively to serve adult-use customers.”
To help medicinal and recreational customers find dispensaries across the state to suit their needs, the CRC has redesigned its online Find a Dispensary directory and added a link from its website main page to make it easier to find.
The directory page includes maps and lists for recreational-only dispensaries, medicinal cannabis dispensaries (ATCs), and medicinal dispensaries offering home delivery.
— NJ Cannabis Insider staff
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Jelani Gibson is the lead reporter for Cannabis Insider. He previously covered gun violence for the Kansas City Star.
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