Cannabis is legal in N.J. Lawmakers are targeting stores that sell it without licenses

More than five years after New Jersey voters approved cannabis legalization, the state’s top Democratic and Republican Senate leaders are backing a new effort aimed at shutting down unlicensed cannabis retailers and smoke shops.

The bill, S4287, sponsored by Senate President Nicholas Scutari, D-Union, and Senate Minority Leader Anthony Bucco, R-Morris, would create specific criminal penalties for unlicensed cannabis and vape sales.

Under the bill, a person who owns or operates an unlicensed cannabis retail business would face a third-degree crime punishable by fines ranging from $10,000 to $50,000.

Businesses could face fines of up to $250,000. Similar penalties would apply to businesses that sell vape products without the licenses required under state law.

The bill would also authorize the seizure of products, allow towns to seek the closure of repeat offenders and make certain violations eligible for racketeering prosecutions in the state.

The legislation represents the latest attempt by lawmakers to address the proliferation of unlicensed smoke shops and cannabis retailers since recreational cannabis sales began in New Jersey. 

Supporters, many of whom are legal cannabis business owners, argue those businesses undermine licensed dispensaries that comply with state testing, taxation and regulatory requirements.

During the bill’s proposal and unanimous passage in the Senate Judiciary Committee, no opponents testified. 

Todd Johnson, New Jersey Cannabis Trade Association president, said stores often had to compete with smoke shops that sold unlicensed cannabis near their stores, in zones where cannabis is not allowed, and in towns that had banned legal stores altogether. 

“Oftentimes they’re near dispensaries, sometimes near schools — they don’t abide by the same setbacks that the local ordinances in New Jersey have set,” Johnson said in an interview after the bill’s committee hearing. 

The proposal follows an earlier Scutari- and Bucco-backed bill that sparked significant opposition by creating criminal penalties for consumers who purchased cannabis from unlicensed sellers. 

Critics of that measure, S4154, argued it unfairly targeted consumers who went into stores that passed themselves off as legitimate, would reverse key elements of New Jersey’s cannabis decriminalization efforts and could disproportionately affect residents living in municipalities that prohibit dispensaries.

In contrast, the new proposal focuses almost exclusively on sellers rather than purchasers, sidestepping one of the most controversial aspects of the earlier legislation.