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Suggested Reforms to S-2703

“New Jersey Marijuana Legalization Act”

Monday, November 26, 2018

Dear Chairmen and Members of the Committees:

Thank you for the opportunity to speak today. My name is Frayda Levin, the National Board Chair of
Americans for Prosperity, the nation’s largest grassroots organization dedicated to a free society. On
behalf of the tens of thousands of AFP activists in New Jersey, I applaud the opportunity S-2703
represents for our state and wish to highlight needed areas for reform in the legislation.

By legalizing the cultivation, sale, and possession of cannabis in regulated amounts statewide, S-2703
will create thousands of jobs and generate hundreds of millions in revenue for New Jersey.

S-2703 ends needless arrests for a substance less dangerous than alcohol, creating expedited
expungement opportunities for several cannabis-related offenses, helping redress past wrongs,
particularly against New Jersey’s most vulnerable. As experience elsewhere shows, refocusing limited
law enforcement resources towards more serious crimes improves public safety. Since legalizing
cannabis, states like Colorado and Washington have already solved a higher proportion of their violent
crime, burglary, and motor vehicle theft cases.

The economic and criminal justice benefits of legalization are clear, but lawmakers should keep New
Jersey’s legal cannabis market as viable as possible to ensure the black market does not re-emerge,
defeating the original purpose of the bill. New Jersey does not want to have the same experience as
Massachusetts. It has been over two years since the voters approved marijuana legalization. Yet just this
month, the first store was allowed to open. The two-year delay was due to the overly complex
regulatory process. If New Jersey wants to get a legal, viable marijuana industry operating as quickly as
possible, we believe S-2703 needs comprehensive fixes to its regulatory approach. Among the most
urgent needed changes are the following:

1) End the Labor Peace mandate: S-2703 requires all cannabis business owners to sign a labor
peace agreement within 200 days of licensure. This unfair, cronyist carveout for special interests
has nothing to do with an applicant’s ability to run their businesses, nor does S-2703’s codified
priority for applicants that use union labor. The labor peace mandate also directly violates the
National Labor Relations Act and could expose our state to needless and costly litigation as a
result. This burdensome regulation will delay the expansion of the legal market, particularly for
smaller, less well-capitalized licensees the bill seeks to promote.

2) Scrap excessive employee regulations: S-2703’s stated intent is to regulate cannabis like
alcohol, but it regularly imposes far harsher requirements on cannabis employees than exist in
the alcohol industry. The bill requires all cannabis industry employees to undergo criminal
background checks and complete a certification course—a de facto occupational license—none
of which is imposed on liquor store employees. As an organization supportive of former
prisoners’ re-entry into society, AFP strongly to the background check requirements potential to
disproportionately exclude disadvantaged New Jerseyans who could benefit most from
participation in the industry. Instead of a laborious certification course, the bill should merely
require licensees to train their employees to comply with the clear requirements the Bill already
lists.

3) End restrictive dosage/advertising limits: S-2703 too often micromanages processes instead of
setting goals. The bill limits cannabis serving at 10mg of THC and edible products at 100mg.
These amounts should be rooted in evidence and set by Commission experts overtime, not by
legislators. Similarly, the bill contains arbitrary advertising restrictions that are restrictive
enough to be the very “unreasonably impracticable” regulation the bill prohibits. S-2703 should
merely direct the Commission to restrict advertising designed to appeal to underage audiences.

4) Stop arbitrary limits on growth and investment: S-2703 bars investors in cannabis businesses
with individual or joint incomes of $200,000 and $400,000 respectively. This has nothing to do
with an applicant’s qualifications and attacks a select income group for no justifiable reason—
limiting opportunities for legal market growth in the process. Similarly, provisions prohibiting
licensees from holding more than one of any class of cannabis license only punish success and
limit the economic benefits legalization can bring to New Jersey. If the Committee fears market
concentration, it should foster competition from below, rather than limiting it from the top.

S-2703 represents an excellent opportunity for New Jersey to improve its economy, reform its criminal
justice system, and protect public safety. I hope you will consider these needed reforms to the
legislation to ensure it can best achieve its goals. Thank you.

Sincerely,

Frayda Levin
National Board Chair | Americans for Prosperity
Co-Founder | Americans for Prosperity New Jersey