Tag Archives: NJ

Tahir Johnson is the founder and CEO of Simply Pure Trenton, the first black-owned social equity dispensary to receive a license in New Jersey. He’s a well-known cannabis advocate who’s held leadership roles at the Marijuana Policy Project, the National Cannabis Industry Association (NCIA) and the United States Cannabis Council. Tahir was born and raised in Trenton, New Jersey, so coming full circle and starting a dispensary in his hometown is something truly special.

From growing up in New Jersey to graduating from Howard University, working in finance and wealth management at companies like Morgan Stanley, to finally launching a business back in his hometown, he embodies the Trenton success story.

Tahir is speaking at the upcoming Cannabis Quality Conference in Parsippany, New Jersey on October 18. Ahead of his presentation there, we caught up with Tahir to learn a little more about his background, his thoughts on social equity and some advice he could offer to other minority cannabis entrepreneurs.

Cannabis Industry Journal: Tell us a little about yourself – what’s your story?

Tahir Johnson, Founder & CEO of Simply Pure Trenton

Tahir Johnson: My name’s Tahir Johnson and I am the founder and CEO of simply pure Trenton. I was born and raised here in Trenton. I am a Howard University alumnus. I’ve spent most of the past few years of my life in the DC Maryland area. I came home to apply for the licenses and thankfully won them. I am one of the first 11 dispensary licenses to be issued last year. I licensed the brand from my good friend, Wanda James, who is the founder of the original Simply Pure back in Denver, Colorado. She started the very first black-owned dispensary in the country. I am excited to be carrying this legacy.

Before cannabis, I spent most of my career working in finance. I came into the industry in 2019 and started out as a budtender after quitting my job in finance, starting to work at a dispensary. I began working in advocacy, joining the NCIA in 2019 then went on to the Marijuana Policy Project and the US Cannabis council in 2021, where I was up until I started this dispensary. It’s been amazing being back home and close to the family after being away for 22 years. I am just really excited that I am on track to open the first black-owned social equity dispensary in the state of New Jersey.

CIJ: Tell us about Simply Pure. How did you start this dispensary and how did you meet Wanda?

Tahir: So, I met Wanda back in 2019, back when I was with NCIA. Initially, it was never about opening a dispensary or anything back then. I was just building a network and finding like-minded minority folks in the business for possible future collaboration. You know, Wanda, I think of her as an OG. She’s been a friend and mentor from Day 1. So, when I initially wanted to apply for a license in New Jersey, I knew that Wanda wanted to grow and take her business outside of Denver. I went to her and asked possibly about partnering, seeing if she wanted to do this with me. She thankfully agreed to it and the rest is history.

Tahir Johnson (left), Wanda James (center) and John Dockery (right)

CIJ: Could you give us a timeline of how Simply Pure Trenton got started? Where are y’all at right now and what sort of roadblocks have you had to overcome?

Tahir: Sure, So I got the conditional license in May of last year, then I got the annual license in April of this year. Early on, hurdles were definitely access to capital. Thankfully, me being one of the first licensees and I think my background and network helped me get access to the money. The biggest barrier, when you look at getting a license, there are so many moving parts. Getting the license is just one small piece of it. Then getting local approval is another obstacle. But man, getting the building permits has been one of the biggest roadblocks I’ve ever faced. If somebody asks me what my biggest roadblock was, it’s building permits. Because in New Jersey, you have to get approval from multiple different outside agencies that really have nothing to do with building or cannabis ore anything. The latest approval we’re waiting on is from the Raritan and Delaware Canal Commission and I’m wondering what the hell does that have to do with building out the interior of my space? You know what I mean, it’s just a lot of red tape and diplomacy that I have to go through. A lot of it is very unexpected!

CIJ: Alright switching gears a little bit here. How would you define social equity in the cannabis industry’s current climate and where we’re at today? What does economic empowerment mean to you?

Tahir: I would say first that social equity in cannabis specifically is the idea that people who have been the most impacted by the war on drugs should have the opportunity be a part of the industry. And that’s super important because we’re building a completely new industry and one that’s doing billions of dollars in sales. In my opinion, when we say people who have been most impacted by the war on drugs, those are by and large the black, indigenous and Latino populations. So, it’s been black and brown folks that have been largely affected by the war on drugs. If we’re going to have a new legal system, those same people who were 4x more likely to be arrested for cannabis should at least get the opportunity in ownership of this new industry.

A rendering of the Simply Pure dispensary storefront

Economic empowerment is one of the biggest parts of social equity. It’s actually what drew me to cannabis in the first place. When you look at the opportunities in cannabis, it’s a business that’s hard to get into, but It’s a lot harder to do if you have a lack of access to capital. Drawing from my career in finance, when you look at black communities, we have 1/10 of the wealth of our white counterparts. Looking at such a cash-oriented business where you can’t just get a normal business loan from a bank, you have to have personal wealth and access to venture capital or private equity. Well, our communities have less access to that because of our background, our networks and upbringings. So social equity is the idea that there should be some support systems in place, some help in bringing opportunities of the cannabis industry to us.

One part of that is licensing and giving us access to the licensing process. Another part of this issue that is being administered more recently is actually making sure that wealth is distributed through programs and policies. Not everyone may want to start a dispensary like me, but they were still severely impacted by the war on drugs. Seeing money from the tax dollars generated by the cannabis industry now going back to the communities to fund rebuilding and revitalizing projects is great. It really comes down to leveling the playing field to create those opportunities for people that should have them.Tahir Johnson will be presenting at the upcoming Cannabis Quality Conference in Parsippany, New Jersey, October 16-18. Click here to learn more.

CIJ: What does community mean to you? How does your business fit into and support the Trenton and larger NJ cannabis community?

Tahir: For me, one of the biggest things I’m proud of growing up in Trenton is that sign on the bridge, “Trenton Makes, The World Takes.” Growing up, this area was an industrial town. Both of my grandparents had good factory jobs and were able to support a family, but a lot of that has left the city over the years, leaving it economically depressed. I’ve been pulled over, arrested, we’ve had family members locked up all just because of cannabis. So the idea that now, through cannabis, to be able to have an opportunity to build something positive in our community, to create jobs and wealth in our community, giving back in this same place is wonderful. I think of this as the economy and opportunity of the future. In New Jersey specifically, the state has one of the biggest racial disparities on arrests. A lot of that is due to cannabis. I remember growing up, every time we get pulled over, you know we’re getting searched. There’s been real life situations, where there was a seed or a roach in the car and we’d have to decide who’s going to jail today just because of a roach. You know, how many people’s lives have been impacted and changed just because of a cannabis arrest? Now, looking at New Jersey and this ability to right those wrongs, it’s really a beautiful opportunity.

When I talk about my community, the way that I’ve been able to inspire people and make our community proud has been the biggest thing for me. For us, we haven’t seen a lot of people make it and get to achieve success. So, to be able to have this opportunity and to be from here actually doing this is one of my biggest motivators, showing people from my community and from across the state that we can be successful in business. We often hear how difficult it can be and how making it in business seems like mission impossible to so many, being able to achieve that mission and give some hope and inspiration to people where I come from is truly special.

CIJ: If you could give yourself advice ten years ago, what would it be? What advice would you offer to other BIPOC entrepreneurs trying to make it in the cannabis industry?

Tahir: Let’s see where I was ten years ago. I would say just always continue to keep the hope and keep the faith. Stuff gets tough, but as long as you keep the vision and the path, it’s going to be okay. What I would say to other cannabis entrepreneurs is largely the same thing. This is hard as fuck. It is very hard. No matter how many times you get knocked down, you have to get back up. Don’t believe the hype. Don’t let anybody make you believe that you can’t do it because you can. It takes believing in yourself, even if people don’t believe.

This would be something that if you are a minority entrepreneur, this is really true. You really do have to be better and stronger. Educate yourself. Take the time to network with people that look like you and don’t. First you want to build a team and a support system. You also want to be able to build. Some of your allies that can help support you, they might not come from your same community or background. I wouldn’t be here if it wasn’t for a lot of very diverse people that believed in me. Work hard, network, believe in yourself because nobody else is going to believe in you. Put in the work and that’ll bring success to anything you want to do.

Tahir Johnson (left) with John Dockery (right)

CIJ: Any final thoughts you want to share with our readers?

Tahir: Yea, so in addition to me winning my licenses, my close childhood friend, John Dockery, will be opening another Simply Pure location in downtown Trenton too, which is really exciting. I am really looking forward to getting to the finish line with all of this and being able to open. I think one of the biggest things I’d like to add is that there are so many people depending on us for this, so many jobs on the line, the community I am waiting to serve, all of these things and we’re encountering delays that are typical of this industry with the long road from getting licensed to opening and operating. A lot of people are expecting us to be open and we’ve encountered some slight delays, but we’re excited to be opening soon and expect that to happen no later than October.

May 10, 2023

New Jersey Market Grows, Regulators Make Licensing Progress

By Cannabis Industry Journal Staff

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2023 has so far been a productive year for the New Jersey Cannabis Regulatory Commission (CRC), the government body tasked with overseeing the state’s medical and adult use cannabis markets. The licensing process since New Jersey first launched its adult use cannabis market has been slow, but intentional and systematic.

When the state first launched adult use sales in April of last year, only thirteen dispensaries in the Garden State had their doors open for customers. A little more than a year has passed and now 27 dispensaries at this time have opened their doors for adult use customers.

Holistic Solutions, a dispensary based in southern NJ

The CRC has been a busy body this year, issuing hundreds of conditional licenses to microbusinesses and standard licensees (temporary licenses awarded to applicants giving them the green light to obtain local approval, find real estate and apply for a conversion to an annual license). Of the annual licenses they have awarded in 2023 so far, 18 have gone to cultivators, 12 to manufacturers, 35 to retailers and one laboratory. That’s an additional 65 cannabis businesses given approval to start operations.

Just last week, Holistic Solutions, based in Waterford, New Jersey, announced that they started serving adult use customers. Holistic is New Jersey’s first Black woman-owned cannabis licensee, with Suzan Nickelson at the helm. “We are thrilled to have the opportunity to serve adult-use customers at Holistic Solutions,” says Nickelson. “Our mission has always been to provide education and access to natural healing solutions, and we are excited to continue that mission for all of our customers.”

The Cannabis Quality Conference takes place in New Jersey this year, October 16-18, 2023. Click here to learn more.Valley Wellness, the first independently owned dispensary to open in the state, also opened its doors to adult use customers last week in Somerset County. “While the market is expanding, it takes cannabis companies months, if not years, to open,” Sarah Trent, owner of Valley Wellness, told reporters. “So we expect our product selection will remain stable and similar over the next year or so. That said we are anxious to add new products made from local New Jersey growers and manufacturers.”

With all these new licensees and a larger marketplace comes tax revenue the state is eager to see. Back in March, legislators in the state approved a bill that would allow cannabis businesses to deduct ordinary business expenses on their state tax return that they are prohibited from deducting on their federal tax return, the dreaded 280E tax code that cannabis stakeholders know as a painful thorn in their side. Governor Murphy signed that bill into law yesterday, which should lessen the massive tax bills that cannabis businesses in the state are accustomed to seeing.

As the state’s cannabis market continues to blossom, a large number of those new licensees are expected to come online before the end of the year.

May 4, 2023

Registration Opens for 2023 Cannabis Quality Conference

By Cannabis Industry Journal Staff

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May 4, 2022 – Registration for the Cannabis Quality Conference & Expo (CQC), taking place October 16-18 at the Hilton Parsippany in New Jersey, is now open.

The agenda will feature breakout sessions, keynotes and panel discussions that will help attendees better understand the cannabis markets in the region and provide insights on best practices and business strategies. The conference will begin with a number of pre-conference workshops on Monday, October 16:

The Seed to Sale Safety Workshop
Food Safety Auditor Training
CP-FS Credential Review Course
The Food Safety Culture Design Workshop

The conferences will run all day Tuesday, October 17 and throughout Wednesday, October 18. The full agenda is expected to be announced in the coming weeks. Notable speakers include:

Tahir Johnson, Founder, Simply Pure
Steven M. Schain, Esquire, Attorney at Smart-Counsel, LLC
Jay Czarkowski, Founding Partner, Canna Advisors
Michael Kramer, Quality Assurance Director, Wana Brands
Casey Leaver, Director of Regulatory Compliance, Vicente LLP
Sumer Thomas, Director of Regulatory Affairs
Rachel Wright, Managing Partner, ABFinWright
Ernest Toney, Founder, BIPOCann
Victor Guadagnio Jr., Co-Founder, Canna Remedies NJ

The Cannabis Quality Conference and the Food Safety Consortium are co-located this year, taking place in the same venue and at the same time. Registered attendees get full access to both conferences.

Registration options are available for full conference passes for both the Cannabis Quality Conference and the Food Safety Consortium as well as all pre-conference workshops.

Event Hours

Monday, October 16: Pre-conference workshops, 8 am – 6:30 pm (ET)
Tuesday, October 17: 8 am – 6:30 pm (ET)
Wednesday, October 18: 8 am – 3 pm (ET)

Tabletop exhibits and custom sponsorship packages are available. For sponsorship and exhibit inquiries, contact RJ Palermo, Director of Sales, and Chelsea Patterson, Account Executive.

About Cannabis Industry Journal

Cannabis Industry Journal is a digital media community for cannabis industry professionals. We inform, educate and connect cannabis growers, extractors, processors, infused products manufacturers, dispensaries, laboratories, suppliers, vendors and regulators with original, in-depth features and reports, curated industry news and user-contributed content, and live and virtual events that offer knowledge, perspectives, strategies and resources to facilitate an informed, legalized and safe cannabis marketplace.

About the Cannabis Quality Conference & Expo

The Cannabis Quality Conference & Expo is an educational and networking event for the cannabis industry that has cannabis safety, quality and regulatory compliance as the foundation of the educational content of the program. With a unique focus on science, technology, safety and compliance, the “CQC” enables attendees to engage in conversations that are critical for advancing careers and organizations alike. Delegates visit with exhibitors to learn about cutting-edge solutions, explore three high-level educational tracks for learning valuable industry trends, and network with industry executives to find solutions to improve quality, efficiency and cost effectiveness in the evolving cannabis industry.

April 19, 2023

New Jersey Gives Curaleaf A Second Chance

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On April 13, 2023, The New Jersey Cannabis Regulatory Commission (CRC) announced that Curaleaf would not be able to renew their cultivation and retail licenses for adult use cannabis for violating labor rules under the state’s cannabis regulations. In a surprise reversal, the NJ CRC voted to approve the license renewals with some caveats during an emergency meeting on April 17.

According to Commissioner Krista Nash with the NJ CRC, Curaleaf did not abide by the law when it failed to recognize workers’ vote to unionize in a timely manner. She says evidence includes testimony from workers and the union. “In my opinion, Curaleaf, in several of its locations, have not complied with the mandatory labor provisions set forth in the law,” says Nash. “And that alone was reason to deny their application for renewal.”

In a press release published by Curaleaf following the reversal, the company say they will be complying with the demands set by the NJ CRC to provide documentation of its labor practices, confirm ongoing compliance and provide evidence of good faith efforts to negotiate collective bargaining agreements. “Today’s decision by the CRC Board to vacate their unprecedented action last week is an incredible victory for our 500 NJ team members and vindication for what we knew all along: Curaleaf is in good standing with the CRC and has fulfilled every requirement necessary for the renewal of our licenses,” says Matt Darin, CEO of Curaleaf in the same statement.

While the second chance comes with a number of caveats, the decision reversal is definitely unprecedented. The Board at the NJ CRC said that if Curaleaf does not comply with those demands, they have the ability to take further action at the next meeting. “Either we hold true to the law and protect the hard-working men and women of New Jersey who want fair wages and working conditions, or we can reward bad behavior and ignore these mandates for the sake of money and profits,” says Nash. “The conditions contained in these resolutions presented today offer Curaleaf a second chance to course correct.”

March 28, 2023

New Jersey Moves to Remove State’s 280E Tax Code

By Jason K. Gross, Esq.

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The New Jersey legislature recently approved legislation that would allow licensed cannabis businesses to deduct ordinary business expenses on their state tax return that they are prohibited from deducting on their federal tax return, and such legislation has been sent to Governor Phil Murphy to potentially sign into law. This relates to the universally dreaded (among those in the cannabis industry, at least) Section 280E prohibition. This legislation is important because it would change current law to allow legal cannabis businesses in New Jersey to operate on more of a level playing field with other businesses in the state.

Cannabis operators and applicants are penalized by their inability to deduct certain expenses on their state and federal tax returns. The cause for this frustration is twofold. First, under federal law, cannabis is considered a Schedule I controlled substance under the Controlled Substances Act, 21 U.S.C. § 801 (CSA). Second, under IRS Tax Code Section 280E, cannabis businesses that are legal under state law are still considered drug traffickers for the purposes of federal tax law. While a related issue that is often considered along with Section 280E is whether or not it is sound public policy to continue to classify cannabis as a Schedule 1 drug, that is beyond the scope of this article.

It is important to understand the history and purpose behind Section 280E. The history is unusual in that Section 280E was enacted in 1982 as a reaction to a court case in which a convicted cocaine trafficker asserted his rights under federal tax law to deduct certain business expenses, including a portion of his rent, the cost of a scale and packaging expenses. The court agreed that the cocaine trafficker should be legally able to deduct his ordinary business expenses as part of his criminal enterprise. The federal government then created Section 280E to punish drug traffickers by removing the profit out of drug deals. Section 280E provides, generally, that no deduction or credit will be allowed in running any business that consists of trafficking any controlled substances (within the meaning of schedule I and II of the Controlled Substances Act).¹

Fast forward several decades and New Jersey has legalized medical and adult-use commercial cannabis activities. Still, because cannabis remains a Schedule 1 controlled substance, federal law prohibits legal cannabis companies from deducting ordinary business expenses and New Jersey has similarly applied the Section 280E prohibitions. New Jersey’s legislators understand the inequity in having legalized, State-compliant cannabis cultivation, processing and retail businesses, where those same businesses cannot take advantage of standard expense deductions applicable to other legal businesses.

If enacted, this New Jersey legislation would decouple New Jersey’s business tax provisions from the Section 280E rule barring deductions for cannabis businesses. Under the proposed New Jersey tax code revisions, a licensed cannabis business’s gross income would be determined without regard to Section 280E of the Internal Revenue Code.² The legislation was approved overwhelmingly in both chambers: by the New Jersey Senate in a vote of 32-3; and by the New Jersey assembly in a vote of 69-8. It would apply to tax years beginning on January 1 of the year following the date the Governor enacts the legislation.

The State Capitol in Trenton, New Jersey

Under Section 280E, a business may not deduct expenses unrelated to its costs of goods sold (COGS), which are, generally, the costs to a cannabis business of producing cannabis products and inventory, including transportation costs to purchase the wholesale cannabis. Virtually everything else is subject to the Section 280E prohibition and non-deductible. So, all other typical costs, such as wages and salary, overhead, advertising, insurance, travel expenses and depreciation do not reduce taxable income. These ordinary expenses are still necessary for the operation of all businesses (to varying degrees). If businesses cannot legally deduct such expenses on their tax returns, their tax liabilities will increase and they will have less money to invest in their facilities and equipment, pay higher salaries and expand their operations.

The impacts of Section 280E are dramatic. An example helps to illustrate this. Consider a hypothetical C Corp. with gross sales of $1 million, COGS of $600,000 and other expenses of $300,000. Such business has a gross profit of $400,000 and net income of $100,000. If the business is normally taxed as a C Corp. at the 21% Federal tax rate, it would pay $21,000, or 21% of $100,000 net income and also $9,000 in State taxes (applying 9% State tax rate on $100,000 net income), for a total tax liability of $30,000. However, that same business in the cannabis industry would pay $120,000 in combined Federal and State taxes, with 21% Federal tax on $400,000 gross profit plus 9% State tax on $400,000 gross profit. As this demonstrates, a cannabis business may be taxed on 100% of the expenses a non-cannabis business could write off. Instead of a 30% effective income tax rate, the cannabis business in this example would have a 120% effective income tax rate. Such business that would otherwise have a profit instead would have a deficit.

Section 280E places a significant tax burden on legal cannabis operators that does not exist for other businesses. While New Jersey’s legislators cannot change the Federal tax code, they are taking action to revise New Jersey’s tax code to level the playing field. Let’s hope the Governor signs into law the pending New Jersey legislation to decouple its tax law from Section 280E.

The views and opinions expressed in this article are those of the author and do not necessarily reflect those of Sills Cummis & Gross P.C.

References

1. The relevant text of Section 280E provides: No deduction or credit shall be allowed for any amount paid or incurred during the taxable year in carrying on any trade or business if such trade or business (or the activities which comprise such trade or business) consists of trafficking in controlled substances (within the meaning of schedule I and II of the Controlled Substances Act) which is prohibited by Federal law or the law of any State in which such trade or business is conducted.

2. The full text of the legislation provides: In the case of a taxpayer that is a cannabis licensee, there shall be allowed as a deduction an amount equal to any expenditure that is eligible to be claimed as a federal income tax deduction but is disallowed because cannabis is a controlled substance under federal law, and income shall be determined without regard to section 280E of the Internal Revenue Code (26 U.S.C. s.280E) for cannabis licensees.

March 28, 2023

Looking for Quality in Security: A Q&A with Superior Protection

By Cannabis Industry Journal Staff

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In New Jersey’s legal cannabis market and other states with newly legalized cannabis, a new market for security agencies has emerged. The increased demand, much like other aspects of the industry, has created a gold rush mentality with plenty of new and old security agencies looking to earn the industry’s business.

Kelly Conklin, founder and president of Superior Protection Professionals (SPP), wants to show people in the industry the difference between quality security agencies and those that simply hire guards and adjust their marketing for a new industry. Along with his son, Kelly Jr. vice president of SPP, they have developed a team of professionals that pride themselves in quality, integrity and trust.

Here, we sit down with Kelly Conklin for a brief chat to get his thoughts on New Jersey’s legalization and the need for heightened security in cannabis facilities.

Cannabis Industry Journal: How did you get into this business and how are you helping cannabis businesses stay safe?

Kelly Conklin (left) and Kelly Jr. (right)

Kelly Conklin: Thanks for speaking with us. We started SPP primarily because of the horrible uptick in mass shootings happening in all sorts of public spaces, like churches, synagogues, schools, and we wanted to do something that would make a positive and meaningful impact on people’s lives, to help people. We had a clear objective when we started. We wanted to build a premium brand and deliver a quality product.

CIJ: From licensing and planning to running a cannabis business, security is a big part of being in this market. What’s required and what do you suggest cannabis companies do to get ahead of the curve?

Kelly: The state requires security for all cannabis facilities. Theft at every step of the way, from the cultivation to manufacturing, to transportation and the dispensary, is a big potential problem. The presence of our agents helps to prevent these crimes. We also help to provide electronic security such as cameras, alarms, key FOB entry doors, monitoring and much more. Things like these are also mandatory for the facilities. You should take a good, hard look at the state’s requirements for security when developing your standard operating procedures and make sure you have every area of security covered.

CIJ: We’ve seen reports of armed robberies at dispensaries in various parts of the country. How do you staff a dispensary to help prevent those?

Kelly: Each dispensary has different needs based on their locations and foot traffic. We tailor our services to each and every client and give them exactly what they need specific to their facility. For example, at one of our dispensaries we have 2 armed guards inside and one unarmed guard at the door scanning IDs. Whatever’s needed, we provide. We like to provide an assessment done at each facility so the client knows exactly what to do to be compliant with all local and state regulations. We insist that if we work with someone, we want them to know us, and feel comfortable with us, knowing they are in good hands. We’re a quality security agency and we want our clients to understand exactly how to operate safely.

CIJ: You mentioned “quality security agency,” what do you mean by that?

Kelly: We work hard to deliver quality. To us, that means trained professionals, be it veterans of the military or federal, state and local law enforcement. Our staff are highly trained, skilled and capable, but most importantly, they care. We’re fully insured, licensed and bonded. Quality also means good customer service. Again, we tailor services to each individual client, we want people to feel comfortable, safe and happy around us. The state conducts audits with us as required by law and we pride ourselves in our ‘above and beyond’ approach. We’re looking forward to the industry’s growth and feel that we can lend a helping hand where it’s needed. Security isn’t just a state requirement that you have to comply with, it’s unfortunately necessary in the cannabis market to keep employees, customers and products safe. We welcome folks in the industry to reach out to us, by phone (908-783-1939) or email as well and we can answer any questions whatsoever.

February 21, 2023

Cannabis Quality Conference Dates, Location Announced

By Cannabis Industry Journal Staff

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Innovative Publishing Company, Inc., the publisher of Cannabis Industry Journal has announced the return of the Cannabis Quality Conference (CQC), taking place October 16-18, 2023 at the Hilton in Parsippany, New Jersey. Presented by Cannabis Industry Journal, the CQC is a business-to-business conference and expo where cannabis industry leaders and stakeholders meet to build the future of the cannabis marketplace.

“New Jersey and the surrounding cannabis markets welcomed the CQC with open arms in 2022 and we’re excited to come back to North Jersey and expand on what we have built,” says Aaron Biros, editor of Cannabis Industry Journal and director of the Cannabis Quality Conference. “In addition to the sessions on cannabis quality, lab testing and infused products manufacturing, we will host sessions on the quality of business, strategic operational considerations and more.” The CQC is seeking abstracts for presentations and posters to be considered for the event. Click here to see the call for abstracts.

In addition to the two full days of cannabis education and programming, pre-conference workshops designed to address safety and compliance in cannabis edibles will take place on October 16. Also new to this year’s event is a strategic co-location with the Food Safety Consortium (FSC) running at the same time and in the same space as the CQC, allowing for food safety and cannabis professionals to meet and share best practices.

“We are bringing two great conferences together under one roof,” says Rick Biros, president of Innovative Publishing and director of the Food Safety Consortium. “The Food Safety Consortium will continue its strategic meeting of the minds format, but we are complementing that with the practical, boots-on-the-ground Food Safety Hazards track. Co-location with the CQC allows attendees to take advantage of additional education on product testing and quality assurance in the burgeoning cannabis market, as well as preconference workshops delving into infused product safety and compliance that will appeal to both food safety and cannabis professionals.”

Click here to stay up to date on lodging, early bird pricing, keynote announcements and more. All of these events will take place October 16-18, 2023 at the Hilton in Parsippany, New Jersey. For sponsorship and exhibit inquiries, contact RJ Palermo, Director of Sales, and Chelsea Patterson, Account Executive. Stay tuned for more information and when registration opens.

About Cannabis Industry Journal

About the Cannabis Quality Conference

The Cannabis Quality Conference is an educational and networking event for the cannabis industry that has cannabis safety, quality and regulatory compliance as the foundation of the educational content of the program. With a unique focus on science, technology, safety and compliance, the “CQC” enables attendees to engage in conversations that are critical for advancing careers and organizations alike. Delegates visit with exhibitors to learn about cutting-edge solutions, explore three high-level educational tracks for learning valuable industry trends, and network with industry executives to find solutions to improve quality, efficiency and cost effectiveness in the evolving cannabis industry.

February 20, 2023

New Jersey’s Careful Approach to Cannabis: Part Two

By Abraham Finberg, Simon Menkes, Rachel Wright

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Click here to read Part One where we examined the state of the market, licensing, approvals and sales. Part Two delves into all things taxes.

A “Raft” of Taxes

Like New York, New Jersey cannabis companies will be dealing with a raft of taxes:

Federal Section 280E: Will It Apply in New Jersey? Well … Sometimes

Section 280E disallows deductions on federal returns for expenditures connected with the illegal sale of drugs, requiring retail cannabis businesses to add back such significant expenses as rent and wages for sales staff.

Unlike New York, New Jersey’s recent cannabis legislation did not state that cannabis businesses were exempt from 280E. However, the state’s individual tax laws do not conform to the internal revenue code, and accountants are inferring that 280E won’t apply to sole proprietorships. Conversely, the state’s corporations must start their tax calculations using Federal taxable income, meaning 280E would apply.

Sales Tax

Retail sales of adult use cannabis are subject to a 7% sales tax. Beginning July 1, 2022, medical cannabis sales are exempt from sales tax.

Purchases by cultivators of farming equipment and related property, such as plants, fertilizer and drip irrigation, are exempt from sales tax. Purchases by all cannabis businesses of materials used to contain, protect, wrap and deliver adult use cannabis are exempt from sales tax.

Excise Tax

The CRC has been empowered to collect a “Social Equity Excise Fee”, to be adjusted annually. The fee is currently $1.10 per ounce, but the CRC is able, but not mandated, to amend the fees to between $10 and $60 an ounce after nine months of adult use sales. At least 70 percent of all cannabis tax revenue is earmarked for investing into impact zones.

The fee is imposed on any sale or transfer of cannabis from a cultivator (or alternative treatment center that also cultivates) to any other cannabis business. The fee is not imposed on transfers from one cultivator to another, or from a cultivator to an alternative treatment center. The facility that purchases the cannabis is responsible for collecting the fee and remitting it to the NJ Division of Taxation.

Local Cannabis Transfer and User Taxes

Each municipality is authorized to impose a Local Cannabis Transfer Tax on sales from one cannabis establishment to another (including from one cultivator to another), and on the sale of cannabis to retail consumers. The allowed rate is capped at 2% of receipts, with the exception of cannabis wholesaler sales, which are capped at 1%.

Atlantic City, which considers itself friendly toward cannabis, passed an ordinance in September 2021 authorizing the collection of a 2% tax on retail adult use cannabis sales and a 1% tax on wholesale sales. Many cities with alternative treatment centers already have a 2% tax on medical cannabis. It is assumed they’ll be enacting the 2% transfer tax on adult use sales if approved to operate.

Other Unique Points About New Jersey Cannabis

Adult use sales are limited: adults may possess up to one ounce total of cannabis products and can only purchase one ounce at a time.
New Jersey is the only state that has legalized cannabis, but kept it illegal for a cannabis consumer to grow their own weed. Growing even one cannabis plant can land the offender in prison for up to five years and incur a $25,000 fine.
About 400 municipalities have opted not to have retail cannabis shops; 98 have said yes. The new law has caused battles between mayors and their city councils, including the city of Paramus. 60% of Paramus residents voted in favor of adult use sales, and the mayor has stressed the benefit of the 2% transfer tax. Paramus city council unanimously rejected adult use cannabis, however. Some council members are against any sales, while others want to wait and see how other towns fare. Says Council Member Maria Elena Bellinger, “Ultimately … I feel that getting more data will only help us come to the right solution.”

Time Will Tell

New Jersey believes its careful approach will create the best adult use cannabis environment for its citizens. Only time will tell if the Garden State ends up avoiding some or all of the problems faced by states like California and New York.

February 14, 2023

New Jersey’s Careful Approach to Cannabis: Part One

By Abraham Finberg, Simon Menkes, Rachel Wright

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This is Part One where we examine the state of the market, licensing, approvals and sales. Part Two will delve into all things taxes. Stay tuned for Part Two, coming next week!

On the surface, New Jersey’s new adult use cannabis program is similar to the program of its larger neighbor across the Hudson. Like New York, New Jersey is attempting to right generations of social wrongs by providing support for disadvantaged applicants and expunging people’s records for prior cannabis-related offenses.

However, the Garden State is in many ways a more cautious state. It is, after all, one of only two states where it’s still illegal to pump your own gas. Although the Cannabis Regulatory Enforcement Assistance and Marketplace Modernization Act (the CREAMM Act) became effective August 19, 2021, New Jersey has gotten off to a slow start. April 22, 2022 marked the first day of legal adult use cannabis sales, and only thirteen dispensaries participated, all of them Alternative Treatment Centers (medical cannabis dispensaries) who’d received a coveted “Authorization to Operate” from the state’s Cannabis Regulatory Commission (CRC).

Types of Licenses

In addition to the standard types of cannabis licenses: retailer, cultivator, manufacturer, wholesales, distributor and delivery, New Jersey has also approved a microbusiness license, which will be limited to 10 employees or less and 2,500 square feet or less of operation space. A cannabis business may apply for more than one type of license.

The CREAMM Act limits the issuance of cultivator licenses to 37 (not including cultivation licenses issued to microbusinesses). However, the state has decided to abolish that cap in order to boost the sagging cannabis market, and the cap will expire February 22, 2023.

The CREAMM Act also describes three special sub-types of licensees:

Certified diversely-owned business – the state wants to issue 15% of licenses to minority-owned businesses and 15% of licenses to woman-owned and disabled veteran-owned businesses.
Social Equity business – owned by people who have lived in an Economically Disadvantaged Area. Will receive special priority.
Impact Zone business – located in an Impact Zone (towns with higher-than-average unemployment, crime and cannabis arrests), owned by people from an Impact Zone, or employing residents of Impact Zones. Will also receive special priority.

License Fees

Licensing fees vary widely, from $1,000 for a microbusiness, to $10,000 for a retailer and from $5,000 for a small cultivator to $50,000 for the largest cultivation operation. Alternative Treatment Centers applying for adult use licenses will pay $100,000 for a single dispensary, $400,000 for a single cultivation license and up to $1,000,000 if they’re a vertically integrated business with 3 adult use dispensaries.

“FINAL AGENCY DECISION: APPROVAL” Doesn’t Mean Approval To Operate

As of February 9, 2023, approximately 950 cultivators, dispensaries, and manufacturers had received CRC letters marked “FINAL AGENCY DECISION: APPROVAL OF CONDITIONAL LICENSE APPLICATION.” However, the letter stated recipients “shall not engage in purchasing, possessing, selling…cannabis or cannabis products.” Instead, it gave permission to 1) rent/purchase a site, 2) gain municipal approval and 3) apply to the CRC to for conversion to an annual license, which will allow them to actually operate. The conditional license phase is 120 days with an automatic 45-day extension.

On October 27, 2022, the first 18 annual adult-use licenses, which do allow the holder to open an adult use cannabis business, were issued, and as of January 13, 2023, only 46 annual adult-use licenses had been awarded.

Notoriety doesn’t seem to be moving the time table much faster. Famous rapper and actor Ice T and his ex-playboy bunny partner, Charris B, have been given conditional approval by the CRC and have obtained location approval from Jersey City. They are now waiting for conversion to an annual license, which as of mid-February 2023, they had still not been granted.

Current Sales

From April 22 to the end of June, New Jersey had collected $4,649,202 in tax revenue from sales of adult use cannabis. That amount included $219,482 in Social Equity Excise Fees and was based on $79,698,831 in total sales of adult use cannabis. The 3^rd quarter of 2022, July through September, saw a jump in sales of adult use cannabis in New Jersey to $116,572,533. With medicinal cannabis sales included, the total went up to $177,710,764.

Stay tuned for Part 2, covering taxes in the Garden State, coming next week!

October 24, 2022

Scenes From The 2022 Cannabis Quality Conference & Expo

By Cannabis Industry Journal Staff

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PARSIPPANY, NJ, October 17-19, 2022 – The Cannabis Quality Conference & Expo (CQC) took place in New Jersey last week. The agenda featured three tracks of educational talks, panel discussions, keynotes and breakout sessions.

Highlights from the 2022 CQC

At this year’s event, the conference featured three different keynote presentations, each on different days as well as Lunch & Learn sessions, led by Matthew Anderson, CEO of Vanguard Scientific. He sat down with two experts in cannabis law for interviews during the lunch hour on Tuesday, October 18.

Investigations & Enforcement: A Former Federal Prosecutor’s Perspective

Matthew Anderson spoke with Barak Cohen, Chair of the Cannabis Industry Group at Perkins Coie, to discuss federal investigations, Justice Department prosecutions and white-collar offenses.

Compliance is Key: Best Practices for Your New Jersey Cannabis Business

Anderson interviewed Casey Leaver, Director of Regulatory Compliance at Vicente Sederberg, to discuss compliance culture, quality controls, New Jersey regulations and more.

Commissioner Maria Del-Cid Kosso takes the stage on Monday

The conference began on October 17 with a keynote presentation led by Commissioner Maria Del Cid-Kosso of the New Jersey Cannabis Regulatory Commission. Commissioner Del Cid-Kosso highlighted the progress the state has made so far with respect to cannabis legalization as well as their goals for the future of the state’s new market.

On the second day of the CQC, Toi Hutchinson, President & CEO of The Marijuana Policy Project, kicked things off with an inspiring keynote discussion where she discussed racial disparities in the industry, social equity, progress and reform efforts.

What People Are Saying About The 2022 CQC

Below are some testimonials we found from this year’s event:

Toi Hutchinson delivers her keynote presentation on Tuesday

“What set the Cannabis Quality Conference apart from many others was the intentionality and focus on high value substance from the presentations.”

“Once again, excellent panels today at the CQC here in Jersey! Have I mentioned how much I love to learn? This industry is forever evolving and being able to observe and watch it roll out from infancy in New Jersey has been tremendous.”

“What an informative and motivating event!”

“I feel fortunate to have been in attendance for such inspiring, informative and REAL discussions being had by industry experts from all across the country.”

“It was so great to listen, meet and speak with so many industry influencers!”

Coming Soon For 2023

After a successful event in New Jersey, the conference begins its planning for next year. The Cannabis Quality Conference & Expo will be returning to New Jersey in 2023. Stay tuned for important announcements, like the dates and location, coming soon.

Scenes From The 2022 CQC

Below are some snapshots of what this year’s CQC had to offer.