Establishes maximum THC potency of cannabis items and imposes excise tax of moderate and high potency cannabis items.

S4148

SENATE, No. 4148

STATE OF NEW JERSEY

222nd LEGISLATURE

�

INTRODUCED MAY 11, 2026

Sponsored by:

Senator� JOSEPH P. CRYAN

District 20 (Union)

SYNOPSIS

���� Establishes maximum THC potency of cannabis items and
imposes excise tax on moderate and high potency cannabis items.

CURRENT VERSION OF TEXT

���� As introduced.

��

An Act

concerning labeling and taxation of cannabis
items, amending P.L.2021, c.16, and supplementing Title 54 of the Revised
Statutes.

����
Be It
Enacted
by the Senate and General Assembly of
the State of New Jersey:

���� 1. Section 18 of P.L.2021,
c.16 (C.24:6I-35) is amended to read as follows:

���� 18.� Regulation of Cannabis.

���� a.���� The commission shall
adopt rules and regulations, pursuant to subsection d. of section 6 of
P.L.2021, c.16 (C.24:6I-34), which shall be consistent with the intent of
P.L.2021, c.16 (C.24:6I-31 et al.).� The commission may create an expert task
force to make recommendations to the commission about the content of such
regulations.� Such regulations shall include:

���� (1)�� Procedures for the
application, issuance, denial, renewal, suspension, and revocation of a license
or conditional license to operate as a cannabis establishment, distributor, or
delivery service.� Such procedures shall include a periodic evaluation of whether
the number of each class of cannabis establishment, or cannabis distributors or
cannabis delivery services, is sufficient to meet the market demands of the
State, a result of which is the commission's authority to accept new
applications and issue additional licenses as it deems necessary to meet those
demands, except as otherwise provided in section 33 of P.L.2021, c.16
(C.24:6I-46) regarding an initial period during which the number of Class 1
Cannabis Cultivator licenses is capped, which limit shall not apply to cannabis
cultivator licenses issued to microbusinesses as set forth in that section;

���� (2)�� Application, licensure,
and renewal of licensure fees;

���� (3)�� Incorporation of the
licensing goals for applicants for licensure who are New Jersey residents
established in P.L.2021, c.16 (C.24:6I-31 et al.).� The commission shall make
good faith efforts to meet these goals.� Qualifications for licensure shall be
directly and demonstrably related to the operation of a cannabis establishment,
distributor, or delivery service, provided that the commission shall make
licenses available to as diverse a group as reasonably practicable, however no
license of any kind shall be issued to a person under the legal age to purchase
cannabis items;

���� (4) (a) Incorporation of the
licensing measures established by the Office of Minority, Disabled Veterans,
and Women Cannabis Business Development pursuant to subparagraph (b) of
paragraph (1) of subsection c. of section 32 of P.L.2019, c.153 (C.24:6I-25) to
promote the licensing of persons from socially and economically disadvantaged
communities, and minority businesses and women's businesses, as these terms are
defined in section 2 of P.L.1986, c.195 (C.52:27H-21.18), and disabled
veterans' businesses as defined in section 2 of P.L.2015, c.116
(C.52:32-31.2).� The commission shall coordinate with the office with respect
to the incorporation of these licensing measures;

���� (b)�� Procedures, to monitor
the incorporated licensing measures established by the Office of Minority,
Disabled Veterans, and Women Cannabis Business Development, which shall include
a verification, as part of the application process for licensure or license renewal,
of a minority, women's, or disabled veterans' business certification provided
to that business by the office pursuant to paragraph (1) of subsection b. of
section 32 of P.L.2019, c.153 (C.24:6I-25), or verification of an application
for certification under review by the office pursuant to that paragraph, which
review is occurring simultaneous to the application for licensure or license
renewal;

���� (5)�� Security requirements
for cannabis establishments and transportation of cannabis and cannabis items;

���� (6)�� Requirements to prevent
the sale or diversion of cannabis items to persons under the legal age to
purchase cannabis items, including, but not limited to, requirements that:

���� (a)�� All licensees and
licensee representatives, before permitting entrance to a cannabis
establishment and selling or serving cannabis items to any person, shall
require such person to produce one of the following pieces of identification:

���� (i)��� The person's United
States passport, or other country's passport or proper government-issued
documentation for international travel if a citizen or other lawfully
recognized resident of that country, who is lawfully permitted to possess and
use that country's passport or government-issued documentation for purposes of
identification in the United States;

���� (ii)�� The person's motor
vehicle driver's license, whether issued by New Jersey or by any other state,
territory, or possession of the United States, or the District of Columbia,
provided the license displays a picture of the person;

���� (iii)� A New Jersey
identification card issued by the New Jersey Motor Vehicle Commission; or

���� (iv)� Any other identification
card issued by a state, territory, or possession of the United States, the
District of Columbia, or the United States that bears a picture of the person,
the name of the person, the person's date of birth, and a physical description
of the person;

���� (b)�� No cannabis
establishment, distributor, or delivery service shall employ persons under 18
years of age nor shall any cannabis retailer allow persons under the legal age
to purchase cannabis items, other than a person employed by the retailer, to
enter or remain on the premises of a cannabis retailer unless accompanied by a
parent or legal guardian;

���� (c)�� Packaging and branding
regulations to prevent the marketing of cannabis items and cannabis
paraphernalia to people under the legal age to purchase cannabis items;

���� (d) No edible cannabis
products shall be manufactured, marketed, or sold that are in the shape of, or
a shape bearing the likeness or containing characteristics of, a realistic or
fictional human, animal, or fruit, or part thereof, including artistic, caricature,
or cartoon renderings;

���� (7)�� Labeling and packaging
requirements for cannabis items sold or distributed by a cannabis
establishment, including, but not limited to, the affixing of a tracking stamp
to containers or packaging as set forth in section 29 of P.L.2019, c.153
(C.24:6I-22) and requirements that:

���� (a)�� Cannabis items and
cannabis paraphernalia are not packaged, branded, or marketed using any
statement, illustration, or image that:

���� (i)��� Includes false,
deceptive, or misleading statements;

���� (ii)�� Promotes
over-consumption;

���� (iii)� Depicts a child or
other person under legal age consuming cannabis items; or

���� (iv)� Includes objects, such
as toys, characters, or cartoon characters suggesting the presence of a person
under the legal age to purchase cannabis items, or any other depiction designed
in any manner to be especially appealing to persons under the legal age to
purchase cannabis items;

���� (b)�� Ensure cannabis items
are packaged in opaque, child-resistant special packaging, or if applicable to
a particular cannabis item, child resistant special packaging for liquid
nicotine containers, in accordance with the "Poison Prevention Packaging
Act of 1970," 15 U.S.C. s.1471 et seq., and the associated regulations
promulgated thereunder, except that these child-resistant packaging
requirements shall not apply to any cannabis item obtained from a cannabis
retailer or alternative treatment center for immediate, on-premises consumption
at that retailer's or center's cannabis consumption area as permitted pursuant
to section 28 of P.L.2019, c.153 (C.24:6I-21);

���� (c)�� Cannabis items warning
labels adequately inform consumers about safe cannabis use and warn of the
consequences of misuse or overuse;

���� (d)�� Labeling rules that
mandate clear identification of health and safety information, including, but
not limited to:

���� (i)��� Net weight;

���� (ii)�� Production date and
expiration date;

���� (iii)� For a cannabis product,
cannabis extract, or other cannabis resin, an ingredient list that includes,
but is not limited to, all ingredients used to manufacture the cannabis
product, any other inactive or excipient ingredients besides cannabis, and a
list of all potential allergens contained within the product;

���� (iv)� Strain or type of
cannabis, listed by scientific terms, if available, and generic or
"slang" names;

���� (v)�� Whether the product
requires refrigeration;

���� (vi)� Growth method, whether
dirt grown, hydroponic, or otherwise, and an indication whether the cannabis
was grown using all-organic materials, and a complete list of any nonorganic
pesticides, fungicides and herbicides used during the cultivation of the cannabis;

���� (vii) For a cannabis product,
the

serving size, the total number of servings, and a statement regarding the
potency
and
percentage of THC contained in the cannabis product and in each
serving.� For example: "The serving size of active THC in this product is
X mg.�
This product has X percent THC potency.
� This product contains X
servings of cannabis, and the total amount of active THC in this product is X
mg.";

���� (viii) Warning labels that
include the nationwide toll-free telephone number used to access poison control
centers that is maintained in accordance with 42 U.S.C. s.300d-71, as well as
include, but are not limited to, one or more of the following statements, if
applicable to a particular cannabis item:

���� -- "This product contains
cannabis";

���� -- "This product is
infused with cannabis";

���� -- "This product is
intended for use by adults 21 years of age or older. Keep out of the reach of
children";

���� -- "The intoxicating
effects of this product may be delayed by two or more hours";

���� -- "There may be health
risks associated with the consumption of this product, including for women who
are pregnant, breastfeeding, or planning on becoming pregnant";

���� -- "Do not drive a motor
vehicle or operate heavy machinery while using this product ";

���� (e)�� Labeling rules that
mandate the source of a cannabis item, including, but not limited to, the
license number of the cannabis cultivator where the usable cannabis used for
the cannabis item was grown, the license number of the cannabis manufacturer
that manufactured the cannabis item, and the license number of the cannabis
retailer that sold the cannabis item and the production batch and lot number of
the cannabis item;

���� (8)�� Health and safety
regulations and standards for the cultivation of cannabis, and the manufacture
and sale of cannabis items, including, but not limited to, requirements that:

���� (a)�� Establish accreditation
and licensure criteria for cannabis testing facilities, which shall include, as
a condition for licensure, the maintenance of a labor peace agreement and
entrance into, or good faith effort to enter into, a collective bargaining agreement
in

accordance with subsection c. of section 19 of P.L.2021, c.16 (C.24:6I-36).�
The commission shall also incorporate the licensing measures established by the
Office of Minority, Disabled Veterans, and Women Cannabis Business Development,
and the assessment of their effectiveness, pursuant to subparagraph (b) of
paragraph (1) of subsection c. of section 32 of P.L.2019, c.153 (C.24:6I-25),
and apply them to the licensing of cannabis testing facilities in order to
promote the licensing of persons from socially and economically disadvantaged
communities, and minority businesses and women's businesses, as these terms are
defined in section 2 of P.L.1986, c.195 (C.52:27H-21.18), and disabled
veterans' businesses as defined in section 2 of P.L.2015, c.116 (C.52:32-31.2).�
The license shall permit a cannabis testing facility to test cannabis items in
accordance with the provisions set forth in P.L.2021, c.16 (C.24:6I-31 et al.),
as well as test medical cannabis and medical cannabis products in accordance
with the provisions of the "Jake Honig Compassionate Use Medical Cannabis
Act," P.L.2009, c.307 (C.24:6I-1 et al.);

���� (b)�� The commission issue
licenses for a sufficient number of cannabis testing facilities, if those
facilities:

���� (i)��� Meet the requirements
for licensure, in order to ensure that the testing of representative samples of
cannabis items in accordance with the procedures set forth in paragraph (13) of
this subsection can be completed in not more than 14 days following their
submission to any facility.� Other factors that may be considered by the
commission in determining whether a sufficient number of cannabis testing
facilities are currently licensed include the current licensees' experience or
expertise in testing highly regulated products, demonstrated testing efficiency
and effectiveness, existing research partnerships or capability to form and
maintain research partnerships focusing on cannabis or cannabis items, and any
other factors established in regulation by the commission; and

���� (ii)�� Permit the commission
to inspect any licensed cannabis testing facility to determine the condition
and calibration of any equipment used for testing, and to ensure that a
facility's testing procedures are performed in accordance with the commission's
accreditation requirements for licensure;

���� (c)�� Every licensed cannabis
cultivator and cannabis manufacturer shall permit representatives of cannabis
testing facilities to make scheduled and unscheduled visits to their premises
in order to obtain random samples of cannabis items, in a quantity established
by the commission, to be transported to cannabis testing facilities for
inspection and testing to certify compliance with health, safety, and potency
standards adopted by the commission;

���� (d)�� Prescribe methods of
producing cannabis, and manufacturing and packaging cannabis items; conditions
of sanitation; safe handling requirements; approved pesticides and pesticide
testing requirements, to the extent not inconsistent with approved pesticides
and requirements otherwise established under federal and State law; and
standards of ingredients, quality, and identity of cannabis items manufactured,
packaged, or sold by cannabis establishments;

���� (e)�� Establish accreditation
criteria for responsible cannabis server and seller training and certification
programs for cannabis retailer employees;

���� (f)�� Provide that no licensed
cannabis establishment, distributor, or delivery service, or employee of a
cannabis establishment, distributor, or delivery service, shall consume, or
allow to be consumed, any cannabis items on the establishment's, distributor's,
or delivery service's premises, except as permitted in a cannabis consumption
area or premises' private area for employees as set forth in section 28 of
P.L.2019, c.153 (C.24:6I-21);

���� (g) (i) Set appropriate
dosage, potency, and serving size limits for cannabis items, provided that
no
cannabis item shall have a THC potency of greater than 60 percent, and
a
standardized serving of a cannabis product shall be no more than 10 milligrams
of active THC and no individual edible cannabis product for sale shall contain
more than 100 milligrams of active THC;

���� (ii)�� Require that each
single standardized serving of a cannabis product in a multiple-serving edible
product is physically demarked in a way that enables a reasonable person to
determine how much of the product constitutes a single serving of active THC,
and that each standardized serving of the cannabis product shall be easily
separable to allow an average person 21 years of age or older to physically
separate, with minimal effort, individual servings of the product;

���� (iii)� Require that, if it is
impracticable to clearly demark every standardized serving of cannabis product
or to make each standardized serving easily separable in an edible cannabis
product, the product shall contain no more than 10 milligrams of active THC per
unit of sale;

���� (h) Establish a universal
symbol to indicate that a cannabis item contains cannabis, which shall be
marked, stamped, or imprinted directly on an edible retail cannabis product, or
on each single standardized serving in a multiple-serving edible cannabis product,
unless the item is a loose bulk good such as granola or cereal, a powder, a
liquid-infused item, or another form too impractical to be marked, stamped, or
imprinted;

���� (i)��� Prohibit the use of a
commercially manufactured or trademarked food product as an edible retail
cannabis product, provided that a commercially manufactured or trademarked food
product may be used as a component of an edible retail cannabis product or part
of a product's recipe so long as the commercially manufactured or trademarked
food product is used in a way that renders it unrecognizable in the final
edible cannabis product and the product is not advertised as containing the
commercially manufactured or trademarked food product;

���� (j)��� Establish screening,
hiring, training, and supervising requirements for cannabis retailer employees
and others who manufacture or handle cannabis items;

���� (k)�� Promote general sanitary
requirements for the handling, storage, and disposal of cannabis items, and the
maintenance of cannabis establishments, and cannabis distribution and cannabis
delivery service premises;

���� (l)��� Provide for rigorous
auditing, inspection, and monitoring of cannabis establishments, distributors,
and delivery services for compliance with health and safety rules and
regulations;

���� (m)� Require the
implementation of security requirements for cannabis retailers and premises
where cannabis items are manufactured, and safety protocols for cannabis
establishments, distributors, and delivery services, and their employees;

���� (n)�� Prescribe reasonable
restrictions on the manner, methods, and means by which cannabis cultivators
and cannabis distributors shall transport cannabis within the State, and all
licensees shall transport cannabis items within the State; and

���� (o)�� Establish procedures for
identification, seizure, confiscation, destruction, or donation to law
enforcement for training purposes of cannabis or cannabis items produced,
manufactured, sold, or offered for sale within this State which do not conform
in all respects to the standards prescribed by P.L.2021, c.16 (C.24:6I-31 et
al.);

���� (9)�� Procedures governing the
advertising and display of cannabis items and cannabis paraphernalia,
including, but not limited to, requirements that:

���� (a)�� Restrict advertising of
cannabis items and cannabis paraphernalia in ways that target or are designed
to appeal to individuals under the legal age to purchase cannabis items,
including, but not limited to depictions of a person under 21 years of age consuming
cannabis items, or, includes objects, such as toys, characters, or cartoon
characters suggesting the presence of a person under 21 years of age, or any
other depiction designed in any manner to be especially appealing to a person
under 21 years of age;

���� (b)�� Permit advertising of
any cannabis items or cannabis paraphernalia on television, or on radio under
limited circumstances established by the commission;

���� (c)�� Prohibit engaging in
advertising unless the advertiser has reliable evidence that at least 50
percent of the audience for the advertisement is reasonably expected to be 21
years of age or older;

���� (d)�� Prohibit engaging in
advertising or marketing directed towards location-based devices, including but
not limited to cellular phones, unless the marketing is a mobile device
application installed on the device by the owner of the device who is 21 years
of age or older and includes a permanent and easy opt-out feature and warnings
that the use of cannabis items is restricted to persons 21 years of age or
older;

���� (e)�� Prohibit the sponsoring
of a charitable, sports, musical, artistic, cultural, social, or other similar
event or advertising at or in connection with such an event unless the sponsor
or advertiser has reliable evidence that no more than 20 percent of the audience
at the event is reasonably expected to be under the legal age to purchase
cannabis items;

���� (f)�� Require all
advertisements to contain the following warning: "This product contains
cannabis.� For use only by adults 21 years of age or older.� Keep out of the
reach of children."; provided however, this subparagraph shall not apply
to advertisements which are limited to alerting the public as to the name,
contact information, and location of a licensed cannabis business establishment
licensed in accordance with P.L.2021, c.16 (C.24:6I-31 et seq.) to sell
cannabis items; and

���� (g)�� Prohibit the advertising
of cannabis items or cannabis paraphernalia in any form or through any medium
whatsoever within 200 feet of any elementary or secondary school grounds.� This
subparagraph shall not apply to advertisements within the premises of a
cannabis retailer.

���� For the purposes of this
section, a noncommercial message shall not be considered an advertisement.�

���� (10) A requirement that only
cannabis items and cannabis paraphernalia are available for sale at a cannabis
establishment;

���� (11) Procedures for the
commission to conduct announced and unannounced visits to cannabis
establishments, distributors, and delivery services, to make, or cause to be
made, such investigations as it shall deem proper in the administration of
P.L.2021, c.16 (C.24:6I-31 et al.) and any other laws which may hereafter be
enacted concerning cannabis, or the production, manufacture, distribution,
sale, or delivery thereof, including the inspection and search of any premises
for which the license is sought or has been issued, of any building containing
the same, of licensed buildings, examination of the books, records, accounts,
documents and papers of the licensees or on the licensed premises;

���� (a)�� The commission shall be
authorized and may at any time make an examination of the premises of any
person or entity licensed under P.L.2021, c.16 (C.24:6I-31 et al.) for the
purpose of determining compliance with P.L.2021, c.16 (C.24:6I-31 et al.) and
the rules of the commission;

���� (b)�� The commission may
require licensee compliance with P.L.2021, c.16 (C.24:6I-31 et al.), and may
appoint auditors, investigators and other employees that the commission
considers necessary to enforce its powers and perform its duties;

���� (c)�� During any inspection of
a licensed premises, the commission may require proof that a person performing
work at the premises is 18 years of age or older. If the person does not
provide the commission with acceptable proof of age upon request, the commission
may require the person to immediately cease any activity and leave the premises
until the commission receives acceptable proof of age; and

���� (d)�� The commission shall not
be required to obtain a search warrant to conduct an investigation or search of
licensed premises;

���� (12) Record keeping
requirements, including, but not limited to, the following:

���� (a)�� The obligation of every
cannabis cultivator to keep a complete and accurate record of all sales of
cannabis flowers, cannabis leaves, and immature cannabis plants, and a complete
and accurate record of the number of cannabis flowers produced, the number of
ounces of cannabis leaves produced, the number of immature cannabis plants
produced, and the dates of production; the obligation of every cannabis
establishment to keep a complete and accurate record of all sales of cannabis
items, and a complete and accurate record of the number of ounces of usable
cannabis sold; the obligation of every cannabis distributor to keep a complete
and accurate record of all cannabis and cannabis items transported in bulk, and
the sending and receiving cannabis establishments involved in each
transportation of the cannabis or cannabis items; and the obligation of every
cannabis delivery service to keep a complete and accurate record of all
cannabis item deliveries made to consumers based on orders fulfilled by of
cannabis retailers;

���� (b)�� Such records shall be
kept and maintained for four years, however there shall not be a requirement
that the records be maintained on the premises of a licensee, and the records
shall be in such form and contain such other information as the commission may
require; and

���� (c)�� The commission may, at
any time, with adequate notice, examine the books and records of any cannabis
establishment, distributor, or delivery service, and may appoint auditors,
investigators, and other employees that the commission considers necessary to enforce
its powers and its duties;

���� (13) Procedures for inspecting
samples of cannabis items, including:

���� (a)�� On a schedule determined
by the commission, every licensed cannabis cultivator and manufacturer shall
submit representative samples of cannabis items produced or manufactured by the
licensee to an independent, third-party licensed testing facility meeting the
accreditation requirements established by the commission, or random samples may
be obtained by representatives of the facility making a scheduled or
unscheduled visit to the licensee's premises, for inspection and testing to
certify compliance with standards adopted by the commission.� Any sample
remaining after testing shall be destroyed by the facility or returned to the
licensee, unless that sample does not meet the applicable standards adopted by
the commission, in which case it may be retained for purposes of retesting upon
request of a licensee in accordance with subparagraph (c) of this paragraph;

���� (b)�� Licensees shall submit
the results of this cannabis item inspection and testing to the commission on a
form developed by the commission; and

���� (c)�� If a sample inspected
and tested under this section does not meet the applicable standards adopted by
the commission, the sample may, upon notice to the commission, be retested at
the request of a licensee in a manner prescribed by the commission, and in
addition to a retest, or as an alternative thereto, the licensee may also be
permitted an opportunity to remediate, upon notice to the commission, the batch
or lot from which the failed sample was taken, which batch or lot shall be
subject to a subsequent test of a new representative sample in a manner
prescribed by the commission.� Any request for a retest of a sample, and any
retest and reporting of results, as well as any batch or lot remediation
process undertaken and subsequent testing of that batch or lot, shall be
completed within a time period established by the commission.� The commission
shall also provide a process by which samples, batches, and lots that failed
retesting or remediation, as applicable, shall be destroyed;

���� (14) Establishing the number
of cannabis retailers, and permissible business arrangements with respect to
other types of retailing businesses:

���� (a) (i) Assuming there are
sufficient qualified applicants for licensure, the commission shall, subject to
periodic evaluation as described in paragraph (1) of this subsection, issue a
sufficient number of Class 5 Retailer licenses to meet the market demands of
the State, giving regard to geographical and population distribution throughout
the State; and

���� (ii)�� the provision of
adequate access to licensed sources of cannabis items to discourage purchases
from the illegal market; and

���� (b) A cannabis retailer's
premises shall not be located in or upon any premises in which operates a
grocery store, delicatessen, indoor food market, or other store engaging in
retail sales of food, or in or upon any premises in which operates a store that
engages in licensed retail sales of alcoholic beverages, as defined by
subsection b. of R.S.33:1-1; and

���� (15) Civil penalties for the
failure to comply with regulations adopted pursuant to this section.

���� b.��� In order to ensure that
individual privacy is protected, the commission shall not require a consumer to
provide a cannabis retailer with personal information other than
government-issued identification as set forth in subparagraph (a) of paragraph
(6) of subsection a. of this section in order to determine the consumer's
identity and age, and a cannabis retailer shall not collect and retain any
personal information about consumers other than information typically acquired
in a financial transaction conducted by the holder of a Class C retail license
concerning alcoholic beverages as set forth in R.S.33:1-12.

���� c.���� Once regulations are
adopted by the commission pursuant to subsection a. of this section, but prior
to the commencement of the application process, the commission shall conduct a
series of information sessions in every county in New Jersey to educate residents
of New Jersey about the responsibilities, opportunities, requirements,
obligations, and processes for application for a license to operate a cannabis
establishment, distributor, or delivery service. �The commission shall conduct
an appropriate number of information sessions in each county considering the
population of each county, but no fewer than one information session in each
county. �The commission shall publicize the day, time, location, and agenda of
each information session broadly through television, radio, Internet, print,
and local agencies.

���� d.��� The commission shall:

���� (1)�� Examine available
research, and may conduct or commission new research or convene an expert task
force, to investigate the influence of cannabis and marijuana on the ability of
a person to drive a vehicle, on methods for determining whether a person is under
the influence of cannabis or marijuana, and on the concentration of active THC,
as defined in section 3 of P.L.2021, c.16 (C.24:6I-33), in a person's blood, in
each case taking into account all relevant factors; and

���� (2)�� Report the results of
the research to the Governor and, pursuant to section 2 of P.L.1991, c.164
(C.52:14-19.1), the Legislature and make recommendations regarding both
administrative and legislative action as the commission deems necessary.

(cf: P.L.2025, c.215, s.3)

���� 2. Section 41 of P.L.2021,
c.16 (C.24:6I-50) is amended to read as follows:

���� 41.� Cannabis Regulatory,
Enforcement Assistance, and Marketplace Modernization Fund.�

���� a. Except for amounts credited
to the Property Tax Reform Account in the Property Tax Relief Fund pursuant to
paragraph 7 of Section I of Article VIII of the New Jersey Constitution, all
fees and penalties collected by the commission, all tax revenues on retail
sales of cannabis items,
all tax revenues collected pursuant to section 3 of
P.L.��� , c.���� (C.������� ) (pending before the Legislature as this bill),

all tax revenues collected pursuant to the provisions of the �Jake Honig
Compassionate Use Medical Cannabis Act,� P.L.2009, c.307 (C.24:6I-1 et al.);
and all revenues, if any, collected for the Social Equity Excise Fee pursuant
to section 39 of P.L.2021, c.16 (C.54:47F-1); and all tax revenues on the
retail sale of intoxicating hemp beverages by any plenary retail distribution
license holder or Class 5 Cannabis Retailer licensee, as well as any fees
associated with the approval provided to any plenary wholesale license holder
to sell intoxicating hemp beverages, as defined pursuant to section 3 of
P.L.2021, c.16 (C.24:6I-33), shall be deposited in a special nonlapsing fund,
which shall be known as the �Cannabis Regulatory, Enforcement Assistance, and
Marketplace Modernization Fund,� with 15 percent of the monies deposited being
placed into an account within the fund to be known as the �Underage Deterrence
and Prevention Account.�

���� b.��� Except for any monies
derived from the Social Equity Excise Fee which shall be appropriated annually
in accordance with subsection d. of this section and the monies placed into the
�Underage Deterrence and Prevention Account� within the fund for the commission
to fund programs and services in accordance with subsection e. of this section,
monies in the fund shall be appropriated annually as follows:

���� (1)�� at least 70 percent of
all tax revenues on retail sales of cannabis items shall be appropriated for
investments, including through grants, loans, reimbursements of expenses, and
other financial assistance, in municipalities defined as an �impact zone� pursuant
to section 3 of P.L.2021, c.16 (C.24:6I-33), as well as provide direct
financial assistance to qualifying persons residing therein as recommended by
the commission; and (2) the remainder of the monies in the fund shall be
appropriated by the Legislature to include the following:

���� (a) to oversee the
development, regulation, and enforcement of activities associated with the
personal use of cannabis pursuant to P.L.2021, c.16 (C.24:6I-31 et al.), and
assist with assuming responsibility from the Department of Health for the
further development and expansion, regulation, and enforcement of activities
associated with the medical use of cannabis pursuant to the �Jake Honig
Compassionate Use Medical Cannabis Act,� P.L.2009, c.307 (C.24:6I-1 et al.) and
P.L.2015, c.158 (C.18A:40-12.22 et al.);

���� �(b)� to reimburse the
expenses incurred by any county or municipality for the training costs
associated with the attendance and participation of a law enforcement officer
from its law enforcement unit in a police training course by an approved
school, as those terms are defined in section 2 of P.L.1961, c.56
(C.52:17B-67), which trains and certifies the law enforcement officer,
including a law enforcement officer with a working dog, as that term is defined
in section 1 of P.L.2006, c.88 (C.10:5-29.7), as a Drug Recognition Expert for
detecting, identifying, and apprehending drug-impaired motor vehicle operators;
and to pay for the same training costs incurred by the Division of State Police
in the Department of Law and Public Safety for the training of a State police
officer or trooper, including an officer or trooper with a working dog, as a
Drug Recognition Expert, as well as the Division of State Police costs in
furnishing additional program instructors to provide Drug Recognition Expert
training to police officers, troopers, and working dogs.� A municipality or
county seeking reimbursement shall apply to the commission, itemizing the
costs, with appropriate proofs, for which reimbursement is requested and
provide a copy of the certificate issued to the police officer to indicate the
successful completion of the program by the police officer, and that officer�s
working dog, if applicable; and

���� (c)�� for further investments,
including through grants, loans, reimbursements of expenses, and other
financial assistance, in municipalities defined as an �impact zone� pursuant to
section 3 of P.L.2021, c.16 (C.24:6I-33), as well as provide direct financial assistance
to qualifying persons residing therein as recommended by the commission.

���� The monies appropriated
pursuant to paragraph (1) of this subsection shall be offset by any revenue
constitutionally dedicated to municipalities defined as an �impact zone�
pursuant to section 3 of P.L.2021, c.16 (C.24:6I-33).

���� c.���� After the appropriation
of those monies in the fund in accordance with subsection b. of this section,
any remaining monies shall be deposited in the State�s General Fund.

���� d. (1) (a) Not less than 60
days prior to the first day of each State fiscal year, the commission shall
make recommendations to the Governor and Legislature for social equity
appropriations based upon the amount of any revenues collected during the current
fiscal year for the Social Equity Excise Fee pursuant to section 39 of
P.L.2021, c.16 (C.54:47F-1), or, if the commission has not imposed or adjusted
the Social Equity Excise Fee in the current fiscal year pursuant to that
section, then appropriations from the General Fund in an amount equal to the
revenues that would have been collected had the commission imposed or adjusted
the Social Equity Excise Fee. The recommendations to the Governor and the
Legislature shall consist of social equity appropriations that invest, through
grants, loans, reimbursements of expenses, and other financial assistance, in
private for-profit and non-profit organizations, and public entities, including
any municipality defined as an �impact zone� pursuant to section 3 of P.L.2021,
c.16 (C.24:6I-33) as well as provide direct financial assistance to qualifying
persons as determined by the commission, in order to create, expand, or promote
educational and economic opportunities and activities, and the health and
well-being of both communities and individuals.

���� (b)�� Not less than 30 days
prior to submitting its recommendations to the Governor and Legislature
pursuant to subparagraph (a) of this paragraph, the commission shall hold at
least three regional public hearings throughout the State, with at least one
hearing in the northern, central, and southern regions of the State, to solicit
the public input on the social equity investments to be made as described in
this section.

���� (2)�� The commission�s
recommendations to the Governor and Legislature may include, but are not
limited to, recommending investments in the following categories of social
equity programs:

���� (a)�� educational support,
including literacy programs, extended learning time programs that endeavor to
close the achievement gap and provide services for enrolled students after the
traditional school day, GED application and preparedness assistance, tutoring
programs, vocational programming, and financial literacy;

���� (b)�� economic development,
including the encouragement and support of community activities so as to
stimulate economic activity or increase or preserve residential amenities, and
business marketing, and job skills and readiness training, specific employment
training, and apprenticeships;

���� (c)�� social support services,
including food assistance, mental health services, substance use disorders
treatment and recovery, youth recreation and mentoring services, life skills
support services, and reentry and other rehabilitative services for adults and
juveniles being released from incarceration; and

���� (d)�� legal aid for civil and
criminal cases, regardless of a party�s citizenship or immigration status.

���� (3)�� The commission may also,
subject to the annual appropriations act, recommend that it retain a portion of
the Social Equity Excise Fee to administer startup grants, low-interest loans,
application fee assistance, and job training programs through the commission�s
Office of Minority, Disabled Veterans and Women Cannabis Business Development
established by section 32 of P.L.2019, c.153 (24:6I-25).

���� (4)�� After receiving the
recommendations, as set forth in paragraphs (1) through (3) of this subsection
and prior to the first day of each fiscal year, the Legislature shall provide
to the commission a statement which lists the investments to be made by appropriations,
including the investment recipients, investment amounts, and how the investment
is intended to support and advance social equity as described in this
subsection.

���� e.���� The monies deposited in
the �Underage Deterrence and Prevention Account� within the fund shall be used
by the commission, based on the acceptance of applications submitted on a form
and through an approval or denial process promulgated by the commission, to
fund private for-profit and non-profit organizations, and county and municipal
programs and services that offer social services, educational, recreational,
and employment opportunities, and local economic development designed to
encourage, improve, and support youthful community activities to divert and
prevent persons under 18 years of age from activities associated with the
consumption of cannabis items, or marijuana or hashish.����

(cf: P.L.2025, c.215, s.5)

���� 3. (New section) a. There are
hereby levied and imposed upon any sale by a Class 2 Cannabis Manufacturer of
cannabis items made within this State the following excise taxes:

���� (1) for a moderate THC
cannabis item, which has a total THC potency of 15 to 40 percent, at the rate
of $1 per serving or fraction thereof.

���� (2) for a high THC cannabis
item, which has a total THC potency of greater than 40 percent, at the rate of
$5 per serving or fraction thereof.

���� b. In determining the applicable
tax rate pursuant to subsection a. of this section, the Class 2 licensee shall
ensure the accuracy of the THC potency information printed on the cannabis
item�s label and packaging, in accordance with the regulations of the Cannabis
Regulatory Commission.

���� c. (1) The excise tax imposed
pursuant to this section shall be collected from the cannabis establishment
purchasing or acquiring the cannabis item, and remitted to the Director of the
Division of Taxation.� The excise tax shall be stated, charged, and shown
separately on any sales slip, invoice, receipt, or other statement or
memorandum of the price paid or payable, or equivalent value of the transfer,
for the cannabis item.�

���� (2)�� Every cannabis
establishment required to collect or pay the excise tax imposed by this section
shall be personally liable for the tax imposed, collected, or required to be
collected or paid under this section.� Any cannabis manufacturer shall have the
same right with respect to collecting the fee from the cannabis establishment
purchasing or acquiring the cannabis item, or with respect to non-payment of
the tax by the cannabis establishment, as if the tax were a part of the
purchase price or value of the transfer of the cannabis item, and payable at
the same time; provided, however, that the director shall be joined as a party
in any action or proceeding brought to collect the tax.

���� d.��� The excise tax imposed
shall be reported and paid to the Director of the Division of Taxation on a
monthly basis, in a manner prescribed by the director.�

���� e.���� The excise tax imposed
under this section shall not apply to sales or transfers of cannabis items by a
cannabis manufacturer to a licensed medical cannabis alternative treatment
center for use in medical cannabis dispensing pursuant to the �Jake Honig Compassionate
Use Medical Cannabis Act,� P.L.2009, c.307 (C.24:6I-1 et al.) or P.L.2015,
c.158 (C.18A:40-12.22 et al.).

���� f. Any amounts collected
pursuant to this section shall be deposited in the �Cannabis Regulatory,
Enforcement Assistance, and Marketplace Modernization Fund� created pursuant to
section 41 of P.L.2021, c.16 (C.24:6I-50).

���� g. The Cannabis Regulatory
Commission in conjunction with the Director of the Division of Taxation shall,
in accordance with the �Administrative Procedure Act,� P.L.1968, c.410
(C.52:14B-1 et seq.), adopt rules and regulations as necessary to implement
this section.

���� 4. This act shall take effect
on the first day of the third month next following enactment, except that the Cannabis
Regulatory Commission and the Division of Taxation in the Department of the
Treasury may take such anticipatory action as may be necessary for the timely
implementation of this act.

STATEMENT

���� This bill establishes a
maximum THC potency of 60 percent for adult personal use cannabis items, and
imposes an excise tax on moderate and high potency cannabis items.

���� Under existing law,
N.J.S.A.24:6I-35, the Cannabis Regulatory Commission (CRC) is required to
establish regulations concerning the labeling and packaging of cannabis items,
as well as setting dosage, potency, and serving size limits of cannabis items,
within the parameters allowed by statute.� The CRC�s regulations are
promulgated at N.J.A.C.17:30-1.1 et seq.

���� Under the bill, the CRC will
be required to revise its regulations to require cannabis item labels to list
the product�s percentage of THC potency, and also to set a maximum THC potency
of 60 percent.

���� The bill further imposes an
excise tax on Class 2 cannabis manufacturers for the wholesale distribution and
sale of moderate and high potency cannabis items.� For a moderate THC cannabis
item, which has a total THC potency of 15 to 40 percent, there is imposed an
excise tax of $1 per serving or fraction thereof.� For a high THC cannabis
item, which has a total THC potency of greater than 40 percent, there is
imposed an excise tax of $5 per serving or fraction thereof.� The tax revenue
will be paid, collected, and accounted for in a manner set by the CRC and the
Division of Taxation, with revenue being deposited into the �Cannabis
Regulatory, Enforcement Assistance, and Marketplace Modernization Fund.�