Curaleaf Denied License Renewal By New Jersey Cannabis Regulatory Commission In Surprise Ruling
Curaleaf Holdings (CNSX: CURA) (OTCMKTS: CURLF) received a surprise ruling at a New Jersey Regulatory Commission public meeting on Thursday afternoon. The company, the largest cannabis operator in the state, was denied renewal of its license to cultivate and sell recreational marijuana in the Garden state by the Commission. Without a license, Curaleaf’s approval for recreational sales lapses on April 21.
The decision, which comes just days before the one-year anniversary of the state’s legalization of recreational weed, left many observers surprised and raised questions about the future of Curaleaf’s medical marijuana customers, as well as its stores in Bellmawr, Edgewater Park, and Bordentown. The company will seek assistance from the attorney general and is considering legal action.
In response, Curaleaf issued a defiant statement calling the Commission’s move an “unprecedented action… which overrode the Commission’s own staff recommendation that our adult-use licenses be renewed – is an outrageous act of political retaliation”. That reference is in relation to the winding down of operations at the company’s Bellmawr cultivation facility prior to notifying regulators.
As of now, it is unclear whether Curaleaf can appeal the decision or what will happen to its existing medical cannabis customers. The Commission cited Curaleaf’s closure of a growing facility, lack of transparency with the state, and clashes with unionization as reasons for the license renewal denial.
Below, Commission Chair Dianna Houenou repeatedly grills the Curaleaf lead representative about whether jobs were lost because of the company’s decision to close a grow facility:
Ultimately, only one member of the commission voted in favor of renewing the license, versus two ‘No’ votes and two abstentions.
The rejection of Curaleaf’s license renewal was met with shock by cannabis advocates and potential licensees at the meeting. The decision follows the launch of New Jersey’s legal recreational cannabis industry almost a year ago, with the first go-ahead for selling recreational cannabis granted to alternative treatment centers, or medical dispensaries. Curaleaf was one of the seven companies to receive this approval.
Commissioner Krista Nash noted before the vote that the state’s legalization law requires cannabis businesses to maintain a labor peace agreement as a condition of licensure. The law also mandates collective bargaining within 200 days after a dispensary first opens if the majority of employees vote to form a union. Nash stressed that this was a requirement mandated by lawmakers, and not a loophole for companies to exploit.
During Thursday’s meeting, James Shorris, Curaleaf’s chief compliance officer, spoke on behalf of the company. He highlighted the company’s investments in the state, high sales to medical and recreational consumers, and job creation with an emphasis on diversity. He also defended the closure of the Bellmawr grow site, citing changes in demand for flower and cost concerns. Although encouraged by Curaleaf’s diversity efforts, one commissioner abstained from the vote.
Other cannabis operators, such as Verano, Columbia Care, Green Thumb Industries, Terrascend, and Rise were granted complete annual license renewals on Thursday. Acreage CCF NJ (The Botanist) was cited for past infractions but was granted license renewal also.
The New Jersey Regulatory Commission will next convene in June.
