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New Jersey Cannabis Inventory Control, Storage and Diversion Prevention Procedures

Based on the requirements outlined in the CRC regulations published in August, 2021:

Accessibility of Storage Areas § 17:30-9.12  (page 95), Inventory § 17:30-9.13 (page 96), Reportable Events Related to Inventory Loss § 17:30-9.11 (page 94) – All License Types

Cultivator Storage and Quarantine § 17:30-10.7 (page 106) Cultivator Inventory § 17:30-10.8 (page 107)Cultivation Only 

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From the recently published CRC Regulations:

§ 17:30-9.11 REPORTABLE EVENTS INVOLVING RISK OF INVENTORY LOSS

(a) A cannabis business, upon becoming aware of a reportable loss, discrepancies identified during inventory, diversion or theft, whether or not the cannabis, funds or other lost or stolen property is subsequently recovered and/or the responsible parties are identified, and action taken against them, shall: 1. Immediately notify appropriate law enforcement authorities by telephone; and 2. Notify the Commission no later than three hours after discovery of the event.

(b) The cannabis business shall notify the Commission within 24 hours by telephone, followed by email notification within 5 business days of any of the following: 1. An alarm activation or other event that requires response by public safety personnel; 2. A breach of security; 3. The failure of the security alarm system due to a loss of electrical support or mechanical malfunction that is expected to last longer than eight hours; and 4. Corrective measures taken, if any.

§ 17:30-9.12 ACCESSABILTY OF CANNABIS ITEM STORAGE AREAS

(a) A cannabis business shall limit access to cannabis item storage areas to the minimum number of authorized personnel necessary to maintain safe and orderly operations. 1. When it is necessary for visitors to be present in or passthrough cannabis item storage areas, the cannabis business shall provide for adequate observation of the area by cannabis business personnel whom the license-holder specifically authorized by policy or job description to supervise the activity. 2. The cannabis business shall, in its standard operating procedures, identify the personnel with authorization to access the storage area.

(b) Each cannabis business shall securely store finished usable cannabis and cannabis products that are ready for sale in a locked area, which may include a locked room, cage, or safe, with adequate security and limited access. 1. For purposes of this section, “adequate security,” at a minimum, shall be assessed, established and maintained based on: i. The quantity of cannabis items kept on hand; ii. The cannabis business’s inventory system for tracking and distributing cannabis items; iii. The number of owners, principals, employees, volunteers, management services contractor staff, or vendor-contractors who have or could have access to the cannabis items; iv. The geographic location of the cannabis business and its associated environmental characteristics, such as the remoteness of the premises from local populations and the relative level of crime associated with the area; v. The scope and sustainability of the security alarm system; and vi. The findings of root cause analyses of any breaches of security and/or inventory discrepancies for cannabis items at that location.

§ 17:30-9.13 INVENTORY

(a) Each cannabis business, at a minimum, shall: 1. Utilize the inventory tracking system designated by the Commission pursuant to N.J.A.C. 17:30-3.12; i. Cannabis businesses shall utilize any plant tags, product identification tags, or stamps designated by the Commission pursuant to N.J.A.C. 17:30-3.12 and N.J.A.C. 17:30-13.4. ii. Cannabis business shall be responsible for any fees associated with plant tags, product identification tags, or stamps designated by the Commission. 2. Conduct an initial comprehensive inventory of all cannabis in the possession of the cannabis business, including cannabis available for cultivation, finished usable cannabis available for sale, immature and mature cannabis plants, and unusable cannabis, at the authorized premises on the date the cannabis business first engages in the cultivation, manufacturing, or sale of cannabis; i. An inventory shall include damaged, defective, expired or adulterated cannabis awaiting disposal, including the name, the quantity and the reasons for which the cannabis business is maintaining the cannabis; ii. The initial comprehensive inventory shall be reported to the Commission utilizing the inventory tracking system. 3. Establish inventory controls and procedures for the conduct of inventory reviews and comprehensive inventories of cultivating, stored, usable and unusable cannabis; 4. Update product inventories on at least a daily basis; 5. Conduct a monthly inventory audit of cultivated, stored, usable and unusable cannabis; 6. Conduct a comprehensive annual inventory audit at least once every year from the date of the previous comprehensive inventory; and 7. Promptly transcribe inventories.

(b) The record of an inventory conducted pursuant to this section shall include, at a minimum, the date of the inventory, a summary of the inventory findings and the name, signature and title of the persons who conducted the inventory.

§ 17:30-10.7 CANNABIS CULTIVATOR STORAGE OF CANNABIS; QUARANTINE

(a) A cannabis cultivator shall establish and implement a standard operating procedure for quarantine of any cannabis seed, cutting, clone, immature cannabis plant, batch of cannabis, or cultivation material or component whose suitability for use or distribution is in question, including the conditions described in paragraph (b), to prevent its use and distribution pending disposition by quality control personnel.

(b) A cannabis cultivator shall have at least the following storage areas, which must be segregated from each other: 1. Storage for newly received cultivation materials or components and newly received cannabis seeds, cuttings, clones, immature cannabis plants, or usable cannabis; 2. Batches of usable cannabis awaiting release for distribution for personal use pending written reports confirming they meet specifications; 3. Any usable cannabis suspected but not yet confirmed to be contaminated, including usable cannabis returned as part of a complaint or recall process; 4. Usable cannabis, components, or materials that have been confirmed to be contaminated, including, but not limited to usable cannabis that fails testing or is returned as part of a recall, and shall be stored with cannabis waste in a waste disposal room until destroyed and rendered unusable, in accordance with N.J.A.C. 17:30-9.14.

§ 17:30-10.8 CANNABIS CULTIVATOR INVENTORY

(a) A cannabis cultivator shall be authorized to acquire a reasonable initial and ongoing inventory of cannabis seeds, cuttings, clones, and immature cannabis plants and paraphernalia.

(b) A cannabis cultivator shall limit its inventory of cannabis seeds, cuttings, clones, immature cannabis plants, and usable cannabis to reflect the current market needs of consumers.

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New Jersey Cannabis License