Business

New Jersey Cannabis Companies Are Facing Legal Backlash Over “Gifting”

New Jersey Cannabis Companies Are Facing Legal Backlash Over “Gifting”

The legalization of cannabis is being welcomed with open arms, for the most part. New Jersey is among the latest string of states to finally legitimize marijuana businesses but it came after an uphill battle. In the past three years since Gov. Phil Murphy made the campaign promise to create a regulated cannabis market, there’s been pushback surrounding the laws and regulation around possession and consumption.

However, New Jersey cannabis company owners are dealing with a new headache when it comes to the concept of “gifting,” MJBiz reports. The state attorney’s general office issued cease-and-desist letters to four cannabis companies across the state who are accused of violating the Consumer’s Fraud Act because of how they have distributed their products.

Marlton-based cannabis delivery service Slumped Kitchen, a business self-described as a leading cannabis gifting company in the state, is accused of bringing their clientele brownies and cookies with a “gift” of up to 1 oz. of cannabis. Companies like Slumped Kitchen would offer baked goods at high prices with a promise of a “gift” in the form of a cannabis product, whether flower, pre-rolled, or edibles.

The state attorney general’s office called this a misrepresentation in selling or advertising merchandise. It’s apparently a risky practice since the first violation can lead to a $10K fine. Any repeated infractions are subject to a $20K fine. Slumped Kitchen is now under investigation for violating the Consumer Fraud Act in the state.

Acting director of the New Jersey Division of Consumer Affairs, Kaitlin Caruso suggested that they’re enforcing a zero-tolerance policy towards “gifting,” saying, “We will not allow vendors to misrepresent what they’re selling.”

The other companies that also were hit with cease-and-desist letters were Sky High Munchies, NJGreenDirect.com, and West Winds Wellness.

In a press release, Attorney General Gurbir Grewal said that the need for sending the letters was in order to “not permit these entities to undermine the regulated cannabis marketplace the Legislature created or to compete unfairly with properly licensed cannabis businesses.”

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