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State AG tells companies 'giving away' pot with their products to cease and desist

  • State

Pot is not a gift, the state attorney general says.
Four companies that give away marijuana with purchases of snacks, baked goods and other products have been told to cease and desist as the Attorney General's Office looks into possible Consumer Fraud Act violations.
Sky High Munchies, Slumped Kitchen LLC, NJGreenDirect.com and West Winds Wellness were all sent warning letters Tuesday, telling that that the cannabis they list as a free gift with purchase are central to the sales transaction, meaning they're not gifts at all.
Instead, Attorney General Gurbir Grewal alleges that these companies are attempting to jump the gun on the state's legalization of cannabis before marketing regulations are in place.
“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,” Grewal said in a news release that was sent around the same time as the letters. “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.” 
At least one of the business owners told BreakingAC that they had not yet received their letter, and that they instead learned of it through the media.
Gov. Phil Murphy signed the New Jersey Cannabis Regulatory, Enforcement Assistance, and Marketplace Modernization Act in February. It legalizes and regulates cannabis use and possession by adults 21 years and older and authorizes adult-use cannabis sales by certain businesses licensed by the Cannabis Regulatory Commission.
The CRC has not yet adopted rules for the licensing of adult-use cannabis retailers or issued any licenses to such businesses.
"None of the cannabis items are for sale," NJGreenDirect.com writes on their menu list, which includes Snickerdoodles that promise to be "the best cinnamon sugar cookie you’ll ever have" for $60 to $120.
They come with a suggested free gift of concentrates.
"We deliver only the coolest Merchandise in New Jersey," writes West Winds Wellness. "NONE of our cannabis is for sale. It can be given as a gift at the discretion of our drivers who are independent contractors to any adult 21+ yrs or older with a valid ID."
The Lazy Daze Package from Sky High Munchies comes with a cereal bar, cinnamon bun, bag of chips, two fruit snacks and a bottle of water for $165 with a "munchie gift" of five assorted gummy packs.
Slumped Kitchen sells "munchie packs" for $250 with a 14 gram gift or $475 for a 28 gram gift.
By inaccurately claiming to give free “gifts” of cannabis or marijuana along with the purchase of snacks, baked goods, or other products – generally at exorbitant prices – a company may violate the Consumer Fraud Act, the Division’s Advertising Regulations, and other laws or rules.
The licensing is “designed to eliminate the problems caused by the unregulated manufacturing, distribution, and use of illegal marijuana within New Jersey,” to “strike a blow at the illegal enterprises that profit from New Jersey’s current, unregulated illegal marijuana market,” and to “prevent the sale or distribution of cannabis to persons under 21 years of age,” among other objectives.
“The CRC is committed to establishing a safe marketplace of cannabis products,” CRC Chairperson Dianna Houenou said. “Those trying to preempt the rules and transfer unregulated and untested marijuana items jeopardize public health and undermine confidence in the forthcoming regulated cannabis industry.”
Under the Consumer Fraud Act, each misrepresentation in the sale or advertising of merchandise constitutes a separate violation, and violators may be subject to a penalty of $10,000 for the first violation and $20,000 for each subsequent violation.
“We will not allow vendors to misrepresent what they’re selling,” said Kaitlin Caruso, acting director of the Division of Consumer Affairs. “Under our consumer protection laws, vendors are subject to fines and penalties for making false or misleading statements about what they’re selling. We have warned these companies about our concerns, and to stop conduct that could violate our laws.”
In December 2018, the attorney general filed an administrative complaint against Dr. Anthony Anzalone, who advertised as “NJGreenMD.”
Grewal alleged that Anzalone failed, over multiple years, to comply with the rules of New Jersey’s Medicinal Marijuana Program.
The complaint alleged Anzalone engaged in fraud, gross negligence and professional misconduct by indiscriminately authorizing medicinal marijuana to large groups of people who attended conferences he held in hotels around the state, charging each an initial consultation fee of $350 and subsequently charging each quarterly fees of $100 to $150 for continued authorization of the drug.
In January 2019, Anzalone voluntarily agreed to a temporary suspension of his medical license, and has not practiced medicine in the state since. 
The State Board of Medical Examiners accepted Anzalone’s permanent retirement from the practice of medicine in April. This was deemed a suspension of his medical license without the opportunity to reapply in the future. It resolved the complaint without Anzalone making any admissions.

author

Lynda Cohen

Lynda Cohen founded BreakingAC after working as a local newspaper reporter for more than two decades. She is an NJPA award-winner and was a Stories of Atlantic City fellow.

Sunday, May 19, 2024
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