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Nancy Solomon: It's the Brian Lehrer Show on WNYC. I'm Nancy Solomon from the WNYC and Gothamist newsroom filling in for Brian. Now, we turn to New Jersey. We're nearly a year after voters approved recreational cannabis. The state's Cannabis Regulatory Commission released the guidelines for what will likely become the tri-state area's first legal weed marketplace. I'm in Maplewood, just west of Newark and there's a fairly large cannabis store already opened in my neighborhood.

It's restricted to medical marijuana for the time being, but I'm very curious how this is going to affect life here, especially as a parent of teenagers. The guidelines which came out on Thursday are mostly focused on who will be eligible to sell legal cannabis and the commission's priority review of license applications. Joining me now to discuss what the cannabis regulatory commission is looking for and what its role will be in this new market is Dianna Houenou, chairperson of the New Jersey Cannabis Regulatory Commission. Welcome to WNYC Diana.

Dianna Houenou: Thanks for having me, Nancy. Pleasure to be with you.

Nancy Solomon: The top question I get in New Jersey is when, when will the stores be up and running? When can people go buy recreational marijuana?

Dianna Houenou: We at the Cannabis Regulatory Commission are very excited that now that we have our rules in place, we can really get started in preparing for businesses to get up and running. Right now, we don't have a concrete deadline in place for when people can expect legal recreational sales to begin. However, what will come next is our notice of application acceptance, which will spell out all of the details for applying for a cannabis business license, and from there we can begin the work of reviewing applications and getting these businesses in a position where they can set up their businesses.

Nancy Solomon: Why is it taking so long?

Dianna Houenou: Well, I think it's important to remember a few things. First and foremost, the rules that the commission established on August 19th, they were done so within the parameters of the law and the law actually provided some really fast turnaround times for these regulations. We got rules in place in a mere four months which I genuinely have not seen anywhere else in New Jersey state government.

When it comes to getting businesses online, there's a time that it takes for individuals to get their application materials together, be reviewed by the regulatory agency, and then be awarded. That does take inherently a little while. After applicants are awarded a license, they then have to go out and start building their brick and mortar facilities, getting zoning approvals and things, and getting their facilities fitted with equipment or whatever their needs are. It does typically take several months for businesses to get up and running, but I think New Jersey is really on track to providing legal recreational sales in a good time.

Nancy Solomon: Was that a diplomatic way of saying that the delays occurred in the state legislature getting the bill written and passed?

Dianna Houenou: No, I think it's more of just the nature of setting up a cannabis industry. When we look across the country, many states have taken upwards of a year between the enactment of adult-use legislation and when they first started accepting applications for these businesses. Just with this kind of highly regulated industry, they're going to be a lot of checks in place and that can inherently slow things down a little bit, but we will be doing our part as quickly as possible so that businesses can get what they need to move at their own pace.

Nancy Solomon: The second question I get a lot is what exactly is legal right now? Is it legal to possess marijuana? Can you use it at home legally? What if you walk off your property and you're in a park or on a sidewalk in town, what's legal?

Dianna Houenou: What's legal right now in regulated space is medical cannabis. These are the medicine and the products that are available to our registered qualifying patients at medical dispensaries. With respect to adult use, while the commission has finally put into place its rules for governing the recreational industry, we haven't yet made available of recreational cannabis for sale, that will be coming in the future. Right now, the only legal cannabis-regulated items that are available for purchase are in the medical market.

The law in New Jersey does allow for individuals to possess up to six ounces of unregulated marijuana, and that is a clear distinction because our law actually differentiates marijuana and cannabis such that cannabis is the term used to refer to products that are regulated by the commission and bought and sold in licensed stores. Marijuana is used to refer to unregulated forms of the plant, which is what's bought and sold on the street.

Nancy Solomon: It's hard to get used to using those terms properly, but I didn't quite understand. If let's say right now, obviously, you can't buy recreational cannabis in New Jersey, but if you were to have unregulated marijuana, has it been fully decriminalized? Is there no consequence for having marijuana in your possession?

Dianna Houenou: That's right. It has been decriminalized through the laws that were and signed back in February.

Nancy Solomon: Does that mean you could light up a joint in front of a pub in your town, on the sidewalk and there'd be no consequences?

Dianna Houenou: Not exactly. Consuming cannabis or marijuana in public is still not permitted under the law. The same goes for any indoor public space that falls under the Smoke-Free Air Act. As we move forward, people will have access to regulated products that have undergone strict quality testing controls, are packaged and labeled in a way that protects public health and public safety, and allows consumers to make informed choices about the products they use.

Nancy Solomon: New Jersey listeners, have any of you been in the process of getting involved in the newly legal recreational cannabis industry? What's your experience been like? Are you running into any particular issues or anything you'd like to ask our guest, Dianna Houenou, chairperson of the New Jersey Cannabis Regulatory Commission? You can tweet at Brian Lehrer or give us a call now at 646-435-7280, that's 646-435-7280.

Listeners of this show will likely know that communities of color have been disproportionately impacted by the war on drugs. It's not a new statistic, but it bears repeating that according to the ACLU, despite roughly equal usage rates, Blacks are 3.73 times more likely than whites to be arrested for marijuana. What our listeners might not know is that you're not just some random bureaucrat, you came out of drug policy and racial justice. Tell us a little bit about who you are and your background.

Dianna Houenou: That's right, Nancy. I first got started in the cannabis space as an advocate pushing for legalization of cannabis for adults but making sure that the legalization was done with racial justice and social justice at its core. From there, I did that for a number of years driving up and down the state of New Jersey, convincing people why they should care about this issue and how we can set up a system of regulations at the state level that prioritizes equity and safety. Now, fast forward five, six years, and I am fortunate enough to have the opportunity to actually be on the implementation side of this.

I'm very proud of the work that we have been able to do at the commission to set up rules in record time, making sure that our rules have community input and stay true to our values of equity and safety so that we can prioritize those individuals who have been targeted in the past by prohibition and making access to the cannabis industry, a reality for our communities.

Nancy Solomon: Give us a few specific examples about what you've been able to do to ensure that the communities that you just mentioned that have borne the brunt of the war on drugs, that they have a fair chance at profiting from the business and for their neighborhoods not to be negatively impacted in any way.

Dianna Houenou: Sure. Our rules advance our equity values in a number of ways. First and foremost is through-

Nancy Solomon: It looks like we are experiencing some technical difficulties. We'll get Dianna Houenou, the chairperson of the New Jersey Cannabis Regulatory Commission back on the line momentarily. Stick with us. If you have a question about recreational marijuana in New Jersey, tweet at Brian Lehrer, or give us a call now at 646-435-7280, and we will get her back on the line. Are you there, Diana?

Dianna Houenou: Yes, I am. Sorry about that, Nancy.

Nancy Solomon: We are ready for these eventualities. You were talking about the things you've been able to get in place at the regulatory commission to help communities that bore the brunt of the war on drugs.

Dianna Houenou: Yes, first and foremost is prioritizing applications from businesses. We have not one but three types of equity-driven cannabis businesses that will receive priority application review and approval under New Jersey's rule. Those categories include people who have had prior marijuana-related convictions themselves, individuals who live in economically disadvantaged areas, and businesses that are owned by minorities, women, or disabled veterans.

Second item for equity is really our application fees. New Jersey has some of the lowest application fees in the country under these new rules. We did that intentionally so that our entry points into the industry are affordable and provide some assurance that individuals can feel empowered, that they have an opportunity to put forth their own business applications and be judged on the merits of their ideas and not in comparison to other operators, particularly large multi-state operators that may be coming in.

Lastly, we set up guardrails to combat exploitative business contracts. We wanted to make sure that our local New Jersey business operators felt that they had control and the power to really run their businesses and not cave to the whim of others.

Nancy Solomon: Okay. Let's take a question. We've got a call from Esther in Red Bank, New Jersey.

Esther: Hi, thank you for taking my call. Can you guys hear me? I can't-

Nancy Solomon: Yes. Hi, Esther. We hear you.

Esther: Wonderful. I'm so glad you guys are bringing up racial equity and some of the things the state is doing to try to make this balance, but even with lowering an application fee and lowering that part of the entry, it does seem like this industry requires quite a bit of investment, really heavy investment to get in and be competitive, but I'm wondering what kind of funding sources the state is going to put in place to make equity a real reality, as opposed to just making it easy to apply.

Dianna Houenou: Good morning, Esther and thank you for your question. Yes, you're right, historically having a cannabis business, particularly one that deals and handles cannabis plants directly, do require a lot of startup capital. In New Jersey, not only are we looking to decrease the application fees, we are also actively trying to work with partners, both in the private and public spaces, to find ways to make access to capital a reality for those individuals.

Now, as much as the commission members want to provide access to capital on our end, I also implore individuals in the private sector to step in as well. It is incumbent upon our lending institutions, our landlords, service vendors, and suppliers to make sure that they do their part to make sure people have opportunities to get in this space, and that we don't repeat practices of the past that have kept people locked out of economic opportunities.

Nancy Solomon: Has there been any kind of analysis done at your office about just exactly what is the cost of a startup to get into the cannabis business?

Dianna Houenou: We don't have cost projections just yet. Now that we have our regulations in place that we hope to make that information available in the future. However, when we look to other states, we've seen particularly on the cultivation side, multimillion-dollar needs really, and these are multimillion-dollar industries that get stood up. As we move towards the later ends of the supply chain at the retail end, you see those costs really start to come down. Dispensaries are much more accessible historically than cultivation facilities are but we also are looking at an industry that involves a whole host of ancillary businesses.

These are businesses that are not handling cannabis plants directly but provide some service or support for those cannabis businesses. Accounting services, marketing, photography, cyber security, physical security for protecting the facilities here. These are opportunities that are traditionally much, much lower startup costs, but they will be critical in bolstering our cannabis industry.

Nancy Solomon: It's interesting that you say that because there's been a fight going on in New Jersey. Maybe a fight is not the right word, but many towns have passed ordinances saying that they won't allow a cannabis store to open in their town. As I mentioned at the beginning of the segment, we have one that's gone in right around the corner from me, and it's in a neighborhood that could use a little economic boost.

I actually think that regardless of what you think about marijuana, it's going to do good things for that neighborhood in terms of just bringing a lot of foot traffic to the site and that anything else that opens near it that have-- these kinds of businesses have opened and closed and struggled like cafes or restaurants and whatever stores, that this could be an economic driver for neighborhoods that all across the suburbs have struggled. Is that a reasonable expectation?

Dianna Houenou: Absolutely. The truth is that many towns in New Jersey opted out of allowing cannabis businesses for a variety of reasons. For some, they knew definitively that they simply did not want cannabis businesses in their towns, but for others, they really wanted to see what the state's regulations were going to look like so that they could then make informed decisions about how things should look at the municipal level.

I do hope that now the rules are out, towns will be able to digest the information that's in it and see what role they can play in helping and shaping what the legalized industry looks like in their communities and really take and seize the opportunity here for economic benefits because the towns can levy an additional tax up to 2% on the cannabis that is sold from businesses in their towns. That has a potential to be a source of revenue that can really be invested in some of the community programs that our communities need.

Nancy Solomon: Oh, now you got me really excited. Tell me that it's going to lower our property taxes and I'll be out there standing with a sign telling people to come by.

Dianna Houenou: [laughs] You and me both.

Nancy Solomon: In terms of prioritizing, permitting, and licenses for women and minority-owned businesses, what exactly defines those businesses because I could imagine a scenario where you say, let's say you have a person of color upfront making the application with one of the national corporations that are in the cannabis industry funding that person from behind. What are the assurances that these permits are really going to go to the little guy?

Dianna Houenou: Good question, Nancy. Our statute does refer to some explicit definitions for minority-owned, women-owned, and disabled veteran-owned businesses. At present, the commission is planning to prioritize applicants who can show that they are certified by the state as minority-owned, women-owned, or disabled veteran-owned. That may change or broaden in the future, but right now, we think that having individuals provide that certification is going to be our best bet for ensuring that the businesses stay in the hands of those who it is meant to be in.

In addition to requiring certification, the regulations do restrict transfers of the cannabis license. Those restrictions are meant to avoid deceptive ownership transfers that come in at the last minute. I'm really excited to see how all of these mechanisms come together to make sure that those who are meant to be prioritized, those who have historically been economically excluded, can really have a meaningful opportunity to participate in this marketplace and build a successful business for themselves and their families and their communities.

Nancy Solomon: Do we know yet how many permits we're going to see across the state for stores?

Dianna Houenou: We don't know yet, but by looking at other states, we can bet that it's going to be quite voluminous. Now our state does cap the number of cultivators at 37 for the first two years, so that would be until February 2023. However, micro-businesses, smaller operations are exempt from that cap so we could have theoretically 100 micro-businesses that are cultivating cannabis, and not even touch the cap of 37 cultivators.

When we look at other states, they have received thousands of applications for businesses. I think New Jersey's strong regulations, strong emphasis on equity and inclusion, and safety, and honestly, our position in the geographical region make us a very good opportunity for individuals to get involved in this space.

Nancy Solomon: Speaking of our position in the geographic region, so what's your expectation about how far ahead New Jersey will be of New York and what that's going to do for cannabis tourism in the state or the economy?

Dianna Houenou: I'll say first and foremost, that for anyone in the region who is looking to participate in New Jersey or purchase in New Jersey's cannabis market, should remember that transportation of any cannabis products across state lines is and will remain unlawful. As I stated, about four months ago, New Jersey is the Garden State and we fully intend to live up to that reputation as more and more states adopt, legalize and regulate approach to cannabis, I think we will see a lot more innovation across the region, and a lot more opportunities for there to be strong collaboration and coordination to make sure that together we are setting systems in place that are meant to protect public health, prioritize safety and equitable access to business ownership and workforce opportunities.

Nancy Solomon: Speaking of the Garden State, we got a question on Twitter VforGreen asks, "Why is it so difficult or controversial to include home growth for cannabis? Will it ever happen in the Garden State?"

Dianna Houenou: Thanks so much, V. I know that is something that has been on a lot of people's minds. Now, the law does not allow the commission to permit home cultivation of cannabis, that it strictly only allows the commission to regulate cannabis spaces and licensed businesses to grow, manufacture, and sell cannabis. Right now, the law does not permit home cultivation for individuals so that would require a change in the law.

Nancy Solomon: What about the concerns that some people of color have expressed, most notably, State Senator Ron Rice, that communities of color in New Jersey will be hurt by cannabis stores in their neighborhoods. That it'll be a blight on the neighborhood like too many liquor stores can be a blight on a neighborhood.

Dianna Houenou: I'd say that local governments really have the reins here. The Cannabis Regulatory Commission, through these regulations, we set up the framework for what it takes to operate a business in this new space, but the local level is really where you're going to see the rubber meet the road and the municipalities have a critical role here to shape what the legalized industry actually looks like on the ground.

I know that some communities are preferring to take a more conservative approach and only allow a few businesses to operate. Others are throwing their arms wide open and saying, "Come one come all." I do think that we'll see various approaches across the state, but truly, we should be looking for a statewide industry that is reflective of our diversity in terms of race and ethnic ownership, in terms of business size, and in terms of geographic location. While I recognize that there are some concerns around what legalized cannabis will mean for particularly Black and brown neighborhoods, I say that those communities have a voice, and they should be making their voices heard, so that their vision for their communities is reflected through their municipals actions.

Nancy Solomon: Let's try to squeeze in one last question we have Brian on the line. Brian, I understand you're an attorney who represents clients in the business?

Brian: Yes, thank you very much for having me, Nancy. I appreciate it and congratulations to Dianna, and to the state of New Jersey on 160 pages of goodness that we get to go through. Just a real quick question. A lot of my clients are concerned with banking, payment services, access to financial resources, business banking, due to the nature of cannabis being a Schedule 1 narcotic under federal law and the way that has been interpreted and allowing the states to run these little, I guess, laboratories in democracy.

Banking payment, it's still a big issue when you're forcing a lot of businesses to operate cash-only, have very limited options with respect to debit. A lot of these dispensaries now have on-site ATMs, which, are just incredible security risks. I'm wondering if the state has anything, in particular, anything specific with respect to cannabis banking, payment services, just to bring that marketplace in line with the rest. Talking about ancillary services and the economics of cannabis generally, I think that would go a long way to giving some boost to business.

Dianna Houenou: Sure thing. Thanks, Brian for your question. I'll say off the bat that there are a few businesses-- I'm sorry, a few banks in New Jersey, that are engaging in the cannabis space. While it is largely a cash-based industry, more banks are finding that they are comfortable getting involved in the space. There are institutions in New Jersey that have opened accounts with and lent money to cannabis businesses.

More broadly as more states come on board with legalization, we hope to see some changes at the federal level that will make banking a lot easier. I think our federal officials recognize some of the inherent challenges with keeping some of these banking limitations in place. For the New Jersey-based cannabis businesses, we don't prescribe how they bank or what forms of payment they accept. We think that gives our businesses some flexibility in catering to their patients and customers. Now as we get the recreational industry up and running, again, I think we're going to see a lot more innovation come on board because people recognize that access to flexible and various payment methods is really going to be needed if we want to see the industry as a whole continue to succeed.

Nancy Solomon: Thanks for your call, Brian. One last quick question, Dianna. Where can folks go for more information on how to get started with this application process if they want to start a cannabis business?

Dianna Houenou: Folks should go to our website, nj.gov/cannabis. There you'll find some comprehensive information that is always evolving as we have more updates. There on our website, people can read our regulations that we released last week. There's also a summary for those who are less keen on reading 160 pages as well as a concise fee schedule for those who are more interested in getting right to the costs here.

We also have FAQs on our website and a whole host of resources that are available and more resources that will be made available as we move forward towards accepting applications and when those details become available.

Nancy Solomon: My guest has been Dianna Houenou, chairperson of the New Jersey Cannabis Regulatory Commission. Dianna, thanks so much for coming on the show.

Dianna Houenou: Thank you, Nancy.

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