New Jersey's top prosecutor is taking steps to prevent a cannabis gifting economy from springing up before the state's adult-use dispensaries open for business.
State Attorney General Gurbir Grewal and the Division of Consumer Affairs just fired off cease-and-desist letters to four businesses that have been offering “free” weed to customers who buy snacks or other food items. Each of these businesses was informed that they are potentially violating the state Consumer Fraud Act, which prohibits misrepresentation and deception in the marketplace.
Under the Garden State's new adult-use law, it is now legal for Jersey residents over 21-years-old to possess up to six ounces of weed. But until the state gets around to finalizing its retail regulations and licensing legal dispensaries, sales of non-medical cannabis remain strictly prohibited. To skirt these laws, crafty entrepreneurs have started offering “free” weed along with the purchase of trivial items.
Slumped Kitchen LLC, one of the businesses that is currently under investigation, has allegedly been delivering “snack” and “munchie” packs containing brownies, cookies, and other treats for $150 and up. Of course, the snacks in these packs aren't really worth hundreds of dollars, but each one does contain a “free” gift of either 14 or 28 grams of weed.
The Attorney General's office also sent letters to Sky High Munchies, NJGreenDirect.com, and West Winds Wellness accusing them of running similar gifting schemes. All four businesses have been informed that every individual misrepresentation in the sale or advertising of merchandise represents a separate violation of the Consumer Fraud Act. Each violator can be fined $10,000 for the first violation and $20,000 for each subsequent violation, and each business could be hit with multiple violations.
“In legalizing adult-use cannabis in New Jersey, the Legislature made it clear they were creating a regulated market with restrictions on how that market operates,” said AG Grewal in a statement. “Instead of waiting for those regulations to be established, some vendors have decided to move forward on their own, in ways that the law does not allow. Today we’re making it clear that we will not permit these entities to undermine the regulated cannabis marketplace the Legislature created or to compete unfairly with properly licensed cannabis businesses.”
The idea of the cannabis gifting economy really took off in Washington DC as a direct result of the city's unusual weed laws. The District voted to legalize personal possession and use in 2014, but the federal government has blocked the city from actually legalizing adult-use sales. With no other avenue to sell weed available, dozens of gifting businesses and events have sprung up to fill the void. Vermont has been facing a similar issue since personal possession has been legal since 2018, but legal sales will not begin until next year.
When Virginia legalized adult-use weed this spring, lawmakers were shrewd enough to specifically ban cannabis gifting. But in New Jersey, New York, and other states that have recently legalized weed, the gifting loophole still exists. Without a specific law banning this practice, New Jersey is relying on the Consumer Fraud Act to crack down on grey market weed sales, and other states will have to brainstorm their own solutions.