The New Jersey Cannabis Regulatory, Enforcement Assistance, and Marketplace Modernization Act (CREAMM Act) allows the New Jersey Cannabis Regulatory Commission to create rules to govern the availability of cannabis in the state of New Jersey. The regulations on conditional cannabis business license applications allowed by this act state that all cannabis business license applicants, conditional and annual, must provide the commission with a plan to obtain “appropriate liability insurance coverage for the proposed cannabis business.” See N.J.A.C. 17:30-17 (b)(12); N.J.A.C. 17:30-7.3 (b)(6). With cannabis remaining federally illegal and illegal activity causing insurance companies to summarily reject claims, cannabis businesses now find themselves in a difficult position to comply with both regulations.
Notably, the regulations do not attempt to conceal the fact that everything authorized in this act is still illegal at the Federal level. As the Regulations state in a subsection entitled “Federal Standards Analysis” on the second page of the document, “the Controlled Substances Act, 21 U.S.C. Sections 801 et seq., prohibits the cultivation, distribution, and possession of marijuana, for any reason, regardless of state law. 21 U.S.C. Sections 841 et seq. … therefore, the new rules will conflict with federal law.” The subsection further clarifies that “members of the regulated community who engage in activities contemplated by the act might incur federal civil and criminal liability.”
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