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As lawmakers continue to work on building a legal retail market for recreational cannabis, a game of chess is playing out between authorities and regulators, and entrepreneurs who don’t wait to set up shop. .
On the one hand, the current movement is free weed.
Gary Bozzini, owner of Sky High Munchies LLC, said the online providers he used for payment processing froze around $ 140,000 of customer payments in their systems, preventing him from withdrawing them from his bank.
It therefore proceeds to refunds.
âThey are withholding a lot of money from us because they say we sell marijuana. We don’t sell marijuana, we sell food cravings, âBozzini said. âWe’re going to give it back,â he said, rather than let the companies keep it.
The situation for the Williamstown-based company illustrates a major challenge that has arisen from state to state as legalization expands. Because it’s still federally illegal, federally insured banks don’t want to deal with the marijuana money.
Sky High is one of many companies that until recently called themselves âgift servicesâ as customers order goods like food and clothing and then choose a âfree giftâ of smokable cannabis or edible.
That was until the state attorney general issued cease and desist letters, claiming companies could violate New Jersey’s Consumer Fraud Act, which prohibits gifts requiring purchase. The cease and desist notices issued on June 15 do not address the possession, sale or distribution of marijuana, but mention potential violations of “other laws and regulations.”
In an online discussion with the BreakingAC site, the owners of several of the companies said they provide services that fill the gaps in the current legal distribution of medical cannabis and do nothing illegal. The business owner described it as a “wording problem” and predicted it would end in legal action.
Since the GA’s move, Bozzini has revamped SkyHigh’s website and radio ads to remove references to giveaways. Now, the site offers a snack-only option and displays cannabis products as ordering options, like toppings on pizza.
Another service, Slumped Kitchen, now simply offers âcannabis incentivesâ in exchange for âdonationsâ and has apparently given up on baked goods altogether.
It’s a game Bozzini and other business owners play carefully, step by step, and with no guarantees that they won’t end up in court, jail, or bankruptcy.
In Bozzini, Gouv. Phil murphy isn’t the problem – he has said he counts the governor as an ally in the movement to bring legal weed to New Jersey residents who voted for it.
âThe law says we are allowed to transfer marijuana to anyone 21 years of age and older,â Bozzini said.
Bozzini, a medical marijuana card holder, said he first discovered the idea of ââcannabis “extras” on a road trip from Tennessee to New Jersey. He had run out, was in pain and was still a long way from home. A Google search led him to take a detour to Washington, DC, where he could legally purchase cannabis products if he also attended a strain seminar he received.
âAs I got into the car with a shopping bag in my hand and a receipt in my hand, I said to my fiancee, ‘Let’s move to Washington, DC We didn’t move to Washington, DC, but when the law has entered into force [here] I started to read it.
SkyHigh Munchies started operating on March 5 and now has 15 employees who take care of order fulfillment, customer service and delivery. Bozzini says he and other operators know they are operating in a gray area, but are banding together to stay in business.
âI have accountants and lawyers, and we try to keep things 100 percent professional,â he said.
Edmond DeVeaux, president of the New Jersey CannaBusiness Association, said the corporate leap forward was inevitable in a process that has taken its fair share of time in an industry where most of the supply comes from unregulated sources of cannabis.
While the New Jersey attorney general’s office claims operations like Bozzini are undermining the market, DeVeaux said it is difficult to make such an argument when the market is not fully established.
âWe don’t have an adult program yet, so you can’t cut down on what doesn’t exist,â he said.
Where does Bozzini get the weeds and edibles? This is currently the only area he does not talk about. He says that although the products are not tested and certified like medical stock in dispensaries, the items they offer are genuine and their quality is tested by staff.
One of the concerns of companies like these is the potential effect on the legal market for medical marijuana, where the supply of products can be limited and expensive. And the class of license that would allow these dispensaries to deliver doesn’t even exist yet.
Bozzini said his company was waiving its $ 50 delivery fee for medical marijuana cardholders.
âOur drivers never have more than five ounces on them, ever. And if they do, there’s a second guy in the car with them, âboth for safety and to stay within current personal possession limits.
Bozzini said he does not have a sales tax on marijuana because he sells prepackaged food, not weed. If and when a sales tax is established for the retail jar, he said, he will revamp the business and pay sales tax.
âWe want to pay our taxes, we want a license. We do whatever we have to do, âhe said.
Amy Z. Quinn is NJ.comAudience editor, newsletters and briefings.
Jelani Gibson contributed to this report.