As New Jersey approaches the two-year anniversary of its recreational cannabis market launch this April and adult-use revenue continues to rise, regulators recently announced a new incentive for residents to secure their medical cards.

The New Jersey Cannabis Regulatory Commission (NJ-CRC) announced last week that signup and renewal for its new digital medical cards will be free. According to the commission, the new digital cards will begin rolling out in a few weeks and were introduced to prioritize patient accessibility and convenience.

The digital cards can be presented on a mobile device, eliminating the risk of losing or damaging a physical card while also enhancing accessibility, the commission says.

Changes to New Jersey’s Medical Cannabis Program

Those who would still like a physical medical card are still in for a bargain, as the NJ-CRC also recently reduced its physical registration fees to $10 — they will not be required to pay again until renewal two years later, which is also a $10 fee.

The entire announcement touches on a number of other topics related to New Jersey medical cannabis, with the last header hitting on “Satisfaction Among Program Participants.” It notes a recent survey, conducted by the commission, that found less than 9% of 1,000 surveyed patients said they were unsatisfied with the service they received after contacting Patient Services at the NJ-CRC.

“While many respondents shared concerns about the health care provider fees, product prices, and product availability, more than half said they participate in the program to enjoy the lower price they get from regular patient discounts and not having to pay state taxes, and to have access to the strains and products available only to patients,” the commission states in the announcement.

It also encourages readers to look out for dates for medical cannabis program registration clinics, which are set to be held across New Jersey in the coming months.

New Jersey’s Declining Medical Cannabis Market

Looking at New Jersey cannabis sales trends, the reduction in registration and renewal fees may not come as a shock. New York similarly waived its $50 medical cannabis fee in 2022, the year after it legalized recreational cannabis.

And as New Jersey’s recreational cannabis market has continued to blossom, boosting overall sales numbers, its medical sales are gradually declining.

In April 2022, when recreational sales launched in New Jersey, there were 128,548 total patients in the state. That number in January 2024 was only 88,670, approximately a 31% decrease in less than two years.

While medical sales numbers for 2023 Q4 are not yet available, looking at year-over-year comparisons of Q3 also provides some context for just how stark this change is. Medical sales for 2022 Q3 came to about $61.1 million, while 2023 Q3 was less than half that amount at approximately $29.2 million. 

Conversely, recreational sales year-over-year for the same periods increased from approximately $177.7 million to $206.1 million, for 2022 and 2023’s third quarters respectively.

Potential Incentive for Patient Enrollment

While the NJ-CRC did not make any explicit mentions of sales trends and the decline of medical cannabis sales numbers, it’s likely that these moves were made in part to encourage more residents to take advantage of the state’s medical cannabis program.

As regions introduce their own legal recreational cannabis markets, allowing access for anyone over 21 years old with a valid ID, consumers in legal cannabis states often wonder about the need for a medical card. 

One of the main perks for many is avoiding the taxes levied on recreational products, as mentioned by the commission in their announcement. 

In New Jersey, recreational cannabis products are subject to the standard 6.625% sales tax, along with the Social Equity Excise Fee which changes based on the average price of cannabis — as of Jan. 1, 2024, the fee was updated to $1.24 per ounce. Municipalities can also charge a 2% transfer fee on cannabis sales that occur within their borders.

These taxes may not seem extreme given the additional taxes in some other states — Washington State has the highest cannabis taxes in the continental U.S. with its 37% excise tax, for example.

While the tax rates may not be the highest, New Jersey infamously has some of the most expensive recreational cannabis in the country. Aside from the tax relief, medical programs tend to have cheaper pricing along with specialized products, higher dosage options and more. 

Whether these efforts will actually reverse New Jersey’s medical cannabis market trends remains to be seen; the decline in medical sales and program enrollment numbers tends to be a recurring theme in medical-only states that legalize recreational cannabis.

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Florida medical cannabis companies have to pay over 22 times the amount to renew their licenses this year—over $1 million dollars—but one company is challenging the unrealistic price hike before it topples the state’s medical cannabis system as we know it.

Sanctuary Cannabis, a medical cannabis company that’s due for a license renewal in January, is arguing that their new $1.33 million price tag for a license is unjustified. The company filed  a petition Oct. 26 against the license renewal fee hike at the state Division of Administrative Hearings.

The company provides unit-dosed products that are independently tested for purity, and the company’s mission is being tested. “We’ve created a space driven by knowledge and compassion, filled with premium, pharmaceutical-grade products, and a professional staff that prioritizes your well-being,” the company website reads.

Gov. Ron DeSantis (R – Florida) said he’d raise the license fees last year, High Times reported, and the “exponential increase” of the amount took effect last December. Florida officials “should charge these people more,” DeSantis said in August 2022. “I mean, these are very valuable licenses. I would charge them an arm and a leg. I mean, everybody wants these licenses.” The exorbitant hike went into effect last December.

Tampa Bay Times reports that Florida’s Department of Health adopted a rule last December that instituted a formula that set the license-renewal fee for medical cannabis operators sky high, $1.33 million every two years, which is more than 22 times the $60,000 biennial fee operators were paying when the program started six years ago.

The formula is based on the number of licensed operators and the estimated cost to regulate the medical cannabis program. Forget the tens of millions of dollars that the agency already collects from patients and caregivers who pay $75 per year for medical cannabis cards.

Follow the Money

The lawsuit followed a budget request that revealed the Department of Health collected a total of about $84 million during the 2022-2023 fiscal year—$14.9 million in application and renewal fees for licenses and nearly $65 million from medical cannabis patients and caregivers. The Department also anticipates collecting about the same amount this year and projects receiving $114 million in 2024-2025.

“The petitioners (Sanctuary) take no issue with the department running a surplus or otherwise receiving any fee, fine, or cost that is necessary to support its operation. However, in light of the department’s own income and projections, the department cannot reasonably assert that this exponential renewal fee increase is necessary to keep its operations afloat,” attorneys Will Hall and Daniel Russell of the Dean Mead firm wrote in the Oct. 26 petition.

The biennial $1,332,124.42 fee, the petition argues, “imposes inappropriately high regulatory costs” on operators, “rendering the challenged rules invalid.” 

Do they really need the money? The Department of Health also reported a $16.3 million surplus during the 2022-2023 fiscal year and projected more surpluses of nearly $4 million this year and $61 million in 2024-2025.

Raising the renewal-fee amount “without accounting for significant and undisputed streams of fee revenue is wholly without logic or reason,” Sanctuary’s lawyers argued.

Cannabis operators in nearly all states already struggle daily, as cannabis remains illegal under federal law. The current conundrum creates banking hurdles, forcing most companies to pay higher income taxes.

Ron DeSantis and Cannabis in Florida

Voters in Florida passed a constitutional amendment legalizing medical cannabis in 2016, but regulations that ban smokable cannabis were passed by the legislature and signed into law by former Gov. Rick Scott.

If it’s adult-use cannabis you want, it’s not on the Ron DeSantis campaign agenda.

Ron DeSantis said he would not legalize adult-use cannabis if elected president, confirming what he said in June, and warned about the danger of fentanyl-laced pot at the Never Back Down Super PAC in Iowa. 

“Yeah, I would not legalize,” DeSantis said at Never Back Down. “I think what’s happened is this stuff is very potent now. I think it’s a real, real problem and I think it’s a lot different than stuff that people were using 30 or 40 years ago. And I think when kids get on that, I think it causes a lot of problems. And then, of course, you know, they can throw fentanyl in any of this stuff now.”

It would take an act of Congress to decriminalize cannabis at the federal level, yet the president would wield a lot of power in that process, i.e. have the ability to veto legislation to do so.

Florida Politics reports that the presidential hopeful is gearing up for the 2024 presidential election, and taking a harder stance against adult-use cannabis.

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The Eastern Band of Cherokee Indians (EBCI) is continuing its path toward cannabis accessibility, and as of last week the tribe officially issued its first medical cannabis cards.

According to EBCI Cannabis Control Board (CCB) executive director, Neil Denman, a Cherokee Police Commission monthly meeting was held on Oct. 12. In a presentation featuring Denman and his colleague, Kym Parker, they stated that the first medical cannabis card was issued on that day, and many more will follow in the coming weeks. A total of 1,005 medical cannabis card applications were submitted, and so far 817 were approved. Only 129 are labeled as incomplete, due to missing assets such as a photo ID, and 59 were denied because of “lack of a qualifying ailment.”

The EBCI live on a 57,000-acre reservation called the Qualla Boundary. The tribe’s website states that they have 14,000 registered tribe members, but the U.S. Census Bureau reports that the reservation is home to 9,600 people, 77% of whom are of Indian descent, and 23% non-Indian. The boundary is also home to two casinos that the tribe manages.

The topic of transporting cannabis to its dispensary was called into question by Vice Chairman Joseph Buddy Johnson. For this to happen, the cannabis products must be moved on a state highway through Swain County. According to Denman, they are coordinating with Swain County to put together a transportation plan.

The EBCI dispensary hasn’t opened yet, so the medical cannabis cards can’t be used. When the program becomes fully operational, the cards will limit how much daily and/or weekly cannabis that patients can purchase. Should a patient violate those rules, their card will be either suspended or revoked. The cards can also be used by off-boundary members who seek to grow their own cannabis plants at home.

Currently there are plans for only one cultivation site at the moment, which is still under construction. In total, the grow will feature 42 hoop houses that will hold 2,040 plants. Eventually, they hope to expand their hoop house number to 69-70. Johnson inquired about plans for a second cultivation site, but Denman explained that the first site is the focus for now.

Originally, the EBCI Tribal Council voted to decriminalize cannabis, as well as legalize medical cannabis back in 2021—a historic event considering that this was accomplished prior to the state of North Carolina making significant progress to legalize medical cannabis.

By November 2022, EBCI had harvested its first cannabis crop. “It’s a vertical market. We have to plant it. We have to cultivate it. We have to harvest it. We have to process it. We have to package it and move through all of that network of product and get it there. It’s a lot of people,” said Qualla Enterprises LLC general manager, Forrest Parker. One month later, the EBCI Tribal Council agreed to provide Qualla Enterprises with $63 million to properly regulate medical cannabis. “This tribe, I’m so proud of us for putting us in a position to learn from other people’s mistakes so that when we do this right, that number is precise,” Parker said. “It’s not $150 million because we’re trying to cover all these things that we don’t know. We actually feel like we actually know.”

In January 2023, the tribe announced that it would be moving forward with its plans to regulate medical cannabis on the reservation. The council voted to introduce their prepared regulations to the North Carolina General Assembly. Principal Chief Richard Sneed spoke at the meeting where the 12-person council approved the regulations, stating that it is of the utmost importance to keep the state legislature in the know. “All this is, is it as a matter of tribal law, before anybody does any work engaging with the state or federal legislature, we have to have permission of the governing legislative body to do so,” Sneed said.

In another record decision on Sept. 7, the EBCI tribe members voted in favor of a proposal to permit the sale of recreational cannabis on tribal land as well. “The Council’s approval of a medical marijuana ordinance is a testament to the changing attitudes toward legal marijuana and a recognition of the growing body of evidence that supports cannabis as medicine, particularly for those with debilitating conditions like cancer and chronic pain,” said Sneed. Now the council will move forward with developing legislation to regulate legal cannabis.

The Qualla Boundary is currently the only area of North Carolina where medical or recreational cannabis is legal. In July, Senate Bill 3 was introduced, which would have legalized medical cannabis for patients with life-ending illness. While the bill was initially passed in the Senate earlier this year, it didn’t receive support in the House.

However, House Speaker Tim Moore announced that the bill was likely dead for 2023. In order for it to pass, it “would require a number of House members who’ve taken a position of ‘no’ to literally switch their position to want to vote for it, and I just don’t see that happening,” Moore explained.

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The South Dakota Department of Health has issued roughly 11,500 cards since the medical marijuana program launched in 2021––shattering the department’s projections of 6,000 cards issued by 2024. 

“We’ve doubled the amount that we were projecting to see in three years within two years,” said Jennifer Seale, the administrator of South Dakota’s medical cannabis program, as quoted by the local news outlet South Dakota Searchlight.

Seale made the comments in testimony on Monday before the Medical Marijuana Oversight Committee in the state legislature. 

Members of the committee expressed concern at the ease with which patients have gained access to medical marijuana cards. 

One member of the committee, Republican state House Rep. Fred Deutsch, has been outspoken in his opposition to recreational marijuana legalization, while also criticizing what he believes is a lack of safeguards in the state’s medical cannabis program. 

“Doctors can make a hell of a lot of money just opening up their ‘Doc in a Box Shop,’ and that concerns me. That should concern everybody. I mean, come on. If we’re talking about medical marijuana, we should allow people that really need it to have access to it, and we should prevent people that don’t need it from getting access to it as well,” Deutsch said in June.

Earlier this year, Deutsch obtained a medical cannabis card himself to demonstrate the ease of access.

“I support easy access to medical marijuana when doctors and patients follow the law. I now have a medical card because my doctor didn’t follow the law,” Deutsch said on Twitter in June.

At Monday’s hearing, Deutsch recounted the visit to the clinic that resulted in the medical cannabis prescription. Local TV station KELO provided details on Deutsch’s comments:

“[Deutsch] said he could clearly hear the conversations between the nurse practitioner and the people seeking cards. ‘There was no privacy whatsoever. HIPAA was out the door.’ According to Deutsch, the nurse practitioner looked at his medical records, noted that he had been in a traffic accident, asked whether he still felt pain, and certified him for a patient card for a year. Deutsch said he then asked her whether using marijuana could conflict with any of his current medicines, but she said he needed to talk to his primary doctor. She told him he needed to ask other questions of the shops that sell marijuana. After seven or eight minutes, the meeting was done: ‘I left feeling, ‘A hundred seventy bucks – there was no examination.’’”

In the state’s legislative session earlier this year, lawmakers considered a pair of proposals that would have imposed restrictions on so-called “pop-up” medical marijuana clinics, where patients can obtain a card with ease.

The two bills would have “made myriad changes to cannabis law in the state: banning certain advertisements for prescription services; requiring certain actions by doctors and other providers to establish a ‘bona fide’ relationship and allowing prescription to occur only in certain facilities, most of them related to medical care in some manner,” the Forum News Service reported at the time.

But both pieces of legislature were soundly rejected by the state Senate Health and Human Services Committee.

In January, South Dakota lawmakers approved a bill to widen the list of qualifying conditions for medical cannabis treatment in the state. The legislation also shifted the authority to set those qualifying conditions from the South Dakota Department of Health to the state legislature.

Voters in South Dakota approved a measure at the ballot to legalize medical cannabis for eligible patients in 2020.

While the law officially took effect in 2021, the first state-licensed dispensaries opened for business last year. 

The state’s 2020 ballot also included a proposed constitutional amendment that would have legalized recreational cannabis in the state.

Although a majority of voters approved the amendment, it was later overturned by the South Dakota Supreme Court––a ruling that delighted the state’s Republican Gov. Kristi Noem, who spearheaded the lawsuit to get the law struck down.

But after the court’s ruling in 2021, Noem made a point to draw a distinction between the overturned recreational pot measure and the medical cannabis program.

“South Dakota is a place where the rule of law and our Constitution matter, and that’s what today’s decision is about,” Noem said at the time. “We do things right—and how we do things matters just as much as what we are doing. We are still governed by the rule of law. This decision does not affect my Administration’s implementation of the medical cannabis program voters approved in 2020. That program was launched earlier this month, and the first cards have already gone out to eligible South Dakotans.”

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City lawmakers in Washington, D.C. adopted an emergency ordinance on Tuesday designed to ease access to the medical cannabis program in the nation’s capital by allowing all adults to “self-certify” their eligibility to use medicinal pot. Under the proposal, adults 21 and older would no longer be required to submit a recommendation to use medicinal pot from a health care provider when they apply for a medical cannabis identification card.

Supporters of the measure maintain that the bill will make it simpler for patients to gain access to medical cannabis, particularly for those who have difficulty seeing a doctor. Out of thousands of physicians practicing medicine in Washington, D.C., only 620 are registered to issue medical pot recommendations. In January, the city council passed a similar measure that allowed adults 65 and older to self-certify for medical cannabis card eligibility, but that ordinance expired on May 1.

“This self-certification is urgently needed for consumers and dispensaries alike,” said Councilmember Janeese Lewis George, as quoted by the DCist. “Expanding our patient base is a necessary first step to putting them on an equal playing field.”

Washington, D.C. Dispensaries Face Competition From Illicit Businesses

The emergency ordinance passed on Tuesday was introduced by Councilmembers Kenyan McDuffie and Mary Cheh. Proponents of the bill also hope that it will help regulated medical dispensaries compete with the illicit cannabis economy.

“Due to the lower barriers to access in the gray market, a significant number of medical marijuana patients have shifted from purchasing their medical marijuana from legal medical dispensaries to the illicit gray market, creating a significant risk to the long-term viability of the District’s legal medical marijuana industry,” McDuffie and Cheh said in a statement accompanying the emergency bill. “If this trend continues, it is possible that gray market sales could wipe out the District’s legal marijuana dispensaries.

Cheh and McDuffie went on to state that given the “benefits that regulated and safe legal dispensaries provide to medical marijuana users in the District, it is vital that the industry survive until the District can stand up a regulated recreational market and transition toward full regulation of recreational marijuana products.”

The council members noted that Washington, D.C.’s permitted medical marijuana dispensaries face stiff competition from the city’s gray market for cannabis, which takes advantage of recreational cannabis decriminalization loopholes to operate with virtual impunity. One popular scheme features businesses who sell cheap merchandise at hyper-inflated prices and include what is ostensibly a gift of cannabis with the purchase.

“Savvy business owners have pushed the legal limits on the gifting industry,” McDuffie said ahead of the vote. “I’ve had medical dispensaries that have reached out to me and my staff and say that if we don’t pass this measure, it could put their businesses into jeopardy.”

Although possession of cannabis has been legalized since the passage of a 2014 ballot measure, the federal government has blocked implementation of the law that would allow for the opening of recreational pot retailers. At Tuesday’s meeting, Council Chairman Phil Mendelson said that he would still like to see additional legislation that targets Washington D.C.’s cannabis gifting shops, noting that the business will be vital infrastructure for a potential legalized adult-use cannabis market.

“It’s not an equal playing field and will never be as long as there are illegal cannabis gifting shops,” he said. “As long as there are these businesses, the legal industry won’t be there to step in [when legalization happens].”

The city council passed the ordinance by a unanimous vote at its meeting on Tuesday. The bill is now headed to the office of Mayor Muriel Bowser for her consideration. In a letter sent to the council on Tuesday, Bowser said that she is in favor of the legislation, according to media reports.

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A week from today, medical cannabis patients in Virginia will no longer need to present a card at a dispensary in order to obtain their prescribed products.

That is thanks to a bill that was signed into law in April that lifted the requirement “for patients to register with the state’s Board of Pharmacy for a license,” according to local news outlet WRIC.

But, per the text of the legislation, the new law still maintains “the requirement that patients obtain written certification from a health care provider for medical cannabis,” while also directing the Board of Pharmacy to “promulgate numerous regulations related to pharmaceutical processors.”

The new law, which officially takes effect on July 1, is aimed at improving the efficiency of the process for patients to obtain medical cannabis in Virginia.

Once it takes effect next week, those patients will be able to obtain their cannabis products from stores as soon as they get a written certificate from a health care provider.

Along with “letting them avoid waiting for a license from the board, a process that can take months, the law will also allow patients to not have to pay a $50 application fee,” WRIC reported.

The measure was signed into law more than two months ago by Virginia Gov. Glenn Youngkin, a Republican serving in his first term.

In addition to removing the registration requirement, the law also “amends the definition of ‘cannabis oil’ by removing the requirement that only oil from industrial hemp be used in the formulation of cannabis oil.”

Cannabis advocates celebrate the bill becoming law in April, saying it will provide a needed remedy for thousands of Virginia medical weed patients. According to WRIC, data from “Virginia’s Board of Pharmacy shows nearly 47,000 total registered patients and thousands of pending applications, a backlog that has forced the board to hire new workers.”

“These legislative improvements will bring great relief to the thousands of Virginians waiting to access the medical cannabis program,” said JM Pedini, NORML’s Development Director and the Executive Director of Virginia NORML. “We hear from dozens of Virginians each week who are struggling with the registration process and frustrated by the 60-day wait to receive their approval from the Board of Pharmacy.”

Virginia’s medical cannabis law began in 2017, although it initially only permitted “patients suffering from intractable epilepsy to use some types of cannabis oil with a doctor’s certification,” according to the Marijuana Policy Project.

The program has since expanded to include other cannabis products such as edibles and bud.

Last year, Virginia went a step further when it legalized recreational cannabis use for adults, becoming the first state in the southern U.S. to do so.

But that law took effect under a Democratic governor and a Democratic-controlled legislature, and it also launched without a regulated market for cannabis sales in place.

As WRIC put it, that meant that “the commonwealth’s medical cannabis program became the only legal market for people.”

Youngkin took office earlier this year, saying that he had no intention of overturning the law that allowed personal possession, but the outlook for retail sales still appears uncertain.

“When it comes to commercialization, I think there is a lot of work to be done. I’m not against it, but there’s a lot of work to be done,” Youngkin said in an interview not long before he took office. “There are some nonstarters, including the forced unionization that’s in the current bill. There have been concerns expressed by law enforcement in how the gap in the laws can actually be enforced. Finally, there’s a real need to make sure that we aren’t promoting an anti-competitive industry. I do understand that there are preferences to make sure that all participants in the industry are qualified to do the industry well.”

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