NEWARK, N.J. (1010 WINS) – New Jersey Attorney General Gurbir Grewal on Tuesday announced that the Division of Consumer Affairs issued warning letters to businesses claiming to offer free "gifts" of marijuana items with purchases of snacks, baked goods, or other products.
"Have you heard about businesses that 'gift' marijuana w/ the purchase of snacks or other items?" Grewal posted on Twitter. "This isn't the kind of cannabis business allowed by NJ's new law. We're warning these businesses to stop unlawful practices that could undercut the legal market."
The letters said that New Jersey will enforce the limits of the adult-use cannabis law to protect the integrity of the regulated market from competition by unlicensed businesses.
Four New Jersey-based vendors – Sky High Munchies, Slumped Kitchen LLC, NJGreenDirect.com LLC, and West Winds Wellness – received letters to cease and desist unauthorized business practices and remain under investigation for violation of the Consumer Fraud Act, which prohibits unconscionable business practices, misrepresentation, and deception in the marketplace.
The warning letters also note that, despite the vendors' characterizations of their business models, the "gifts" are not really gifts at all because they offer consumers appear to be central to the sales transaction.
"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," said Attorney General Grewal. "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."
According to the Cannabis Regulatory Commission, there have been no rules adopted for the licensing of adult-use cannabis retailers or issued any licenses to businesses claiming to give free "gifts" of cannabis or marijuana along with the purchase of snacks, baked goods, or other products usually sold at exorbitant prices may violate laws or rules.
"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."
Under the Consumer Fraud Act, each misrepresentation in the sale or advertising of merchandise constitutes a separate violation, which may receive a penalty of $10,000 for the first violation and $20,000 for each subsequent violation.
