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April 6, 2021

CSG Law Alert: Think Green: Considering Environmental Regulations in New York and New Jersey's Budding Cannabis Sectors

In recent months, New York and New Jersey have both technically legalized the commercial cultivation and sale of recreational marijuana within each respective state. Along with this new legal landscape will come a flurry of regulations directing the means by and the manner in which such cultivation and sale may take place. Often overlooked in the public conversation about this new legal order are questions of environmental regulation of cannabis producers. Little is yet known about just what shape the regulations will take in New York and New Jersey. However, even though the path forward is unclear, it is not uncharted, and a review of common environmental issues and how other states have tackled them can provide insight as to the regulatory issues with which would-be cannabis producers can expect to grapple. This blog post will explore some of the types of environmental regulations that we expect producers and dispensaries in New York and New Jersey will need to abide by and other potential issues that may arise.

Waste Disposal

As with any product-oriented industry, cannabis cultivators can be expected to produce large amounts of solid waste. While it goes without saying that solid waste disposal will be an important part of the regulatory regime, disposal of cannabis waste is a potentially complex issue that will surely be addressed as each state begins proposing rules. We can expect that the solid waste rules will be similar to those of other states that have addressed the problem, which include requirements such as:

  • Cannabis products must be rendered unusable and unrecognizable prior to disposal;

  • Cannabis products must be mixed with other solid wastes such that the resulting waste is no more than fifty percent cannabis waste; and

  • Cultivators and dispensaries must keep records of their cannabis-product disposal.

Additionally, many cannabis producers use solvents, including volatile organic compounds (VOCs), to extract cannabinoid oils from plants. Those VOCs will also need to enter waste disposal streams, although we anticipate that those rules will mimic existing VOC-disposal rules in New York and New Jersey.

Moreover, cannabis cultivators can be expected to produce a significant amount of wastewater discharge, which will likely require permits, such as treatment works approvals, and will certainly need to comply with each state’s respective wastewater discharge standards. Indeed, that point comes into sharp focus because the industry will likely require the use of solvents, pesticides, and rodenticides regulated under state law and, potentially, FIFRA (although, given the current status of marijuana at the federal level, the applicability of federal statutory controls such as FIFRA is a question beyond this blog post).

Air Quality

Putting aside the complexity of waste-disposal issues, growers may also expect to face significant air-quality regulation. For example, states with a flowering cannabis industry have begun to regulate odors emanating from cultivators by requiring approval of HVAC schematics delineating airflow paths and specifications and, in some instances, installation of approved odor-control devices. In addition, the use of VOCs for oil extraction can be expected to necessitate air permitting. In addition, the mere operation of a cultivating facility may require equipment requiring air permits, such as boilers to the extent necessary to operate a greenhouse growing facility or emergency generators.

Soil and Water Contamination

Producers using VOCs for oil extraction will want to remember that VOCs are harmful substances for purposes of the various environmental statutes controlling soil and water contamination and remediation in New York and New Jersey. Accordingly, we expect that the same rules that apply across industries in those states will apply to this industry, and a cannabis producer will need to exercise caution in using and storing VOCs as part of its operations.

As noted above, it is not yet known with precision what form the environmental regulation of cannabis will take in New York and New Jersey, but as events unfold and regulations are promulgated, I will provide updates.