New Jersey has legalized both the cannabis medical and adult-use industries. The New Jersey Cannabis Regulatory Commission is currently accepting licenses for:
- Testing Laboratories
Read the details about New Jersey’s retail application round on our blog.
Find out more about microbusinesses in New Jersey here.
In order to apply for a license in New Jersey, here are the top items you want to complete to be successful starting your journey into the cannabis space:
- Decide what type of business (or businesses) you want to pursue cannabis business licenses for.
Review the list of license types available for application to determine what might be the best fit for you and your business aspirations.
- Assemble Your Team
The next step is to gather your team of experts. Having financial backing in the form of investors is crucial so that you are able to procure consultation services, a location, and other resources along the way. Don’t make the mistake of getting knee-deep in your plan and then running out of money to see it through. After you’ve made sure your funding is set, assemble your team of people you can trust. Specifically, you want people who have experience in the industry and who are well-informed so that you can highlight your team’s expertise in your application.
- Secure a Property
Prior to obtaining a license you will need to secure property that is zoned correctly and able to support the needs of a cannabis business. This can, at times, be the most challenging part of the process. Our team has worked with countless municipalities to assist our clients in obtaining compliant properties in correctly zoned areas.
- Draft Your Application
Application requirements vary between Standard Operating Procedures (SOPs) and narrative forms surrounding the expectations you have for your business. Either way, these need to be compliant with all state, local, and federal regulations. Ensuring that you are compliant is one of the most important steps in the application process. Canna Business Services has years of experience drafting award-winning applications for our clients in competitive states. Set up a meeting with us today to discuss how we can help you with your business.
Read more on our blog about how to take the first steps towards licensure.
Cannabis for medical use was legalized in New Jersey in 2010. However, it started off in a limited way until 2019 when Governor Murphy signed into law the Jake Honig Compassionate Use Medical Cannabis Act. This law greatly expanded the number of patients allowed to qualify for medical cards, created the Cannabis Regulatory Commission, and expanded the types and amounts of cannabis permitted. In November 2020, the voters of New Jersey voted 67% in favor of adding an amendment to the state constitution to legalize adult use of cannabis for those 21 and older.
Priority review is granted to those who meet the following qualifications:
- Social equity businesses – owned by those who live in economically disadvantaged areas, which are defined as zip codes whose average median household income is less than 80% of the state average, has a health uninsured rates that is at least 150% of the state rate, and has a poverty rate at least 150% of the statewide rate; or those who have had a previous conviction for a cannabis offense.
- Diversely owned businesses – minority-owned, woman-owned, disabled veteran-owned, or any combination of the three.
- Impact zone businesses – owned by those located in impact zones, which are defined as municipalities with a large population, high unemployment rate, or high numbers of crime or arrests for marijuana.
In New Jersey, individuals 21+ may possess and use cannabis. State licensed businesses may grow, process, transport, and dispense marijuana. The following types of cannabis business licenses related to adult-use are as follows:
- Class 1 Cannabis Grower License also referred to as a “cannabis cultivation facility.”
- Class 2 Cannabis Processor License also referred to as a “cannabis product manufacturing facility.”
- Class 3 Cannabis Wholesaler License
- Class 4 Cannabis Distributor License
- Class 5 Cannabis Retailer License
- Class 6 Cannabis Delivery License
Three types of cannabis businesses will receive priority review and approval in the application process:
- Social Equity Businesses: owned by people who have lived in economically disadvantaged areas of the state or who have past convictions for cannabis offenses.
- Diversely Owned Businesses: minority-owned, woman-owned, or disabled veteran-owned and certified as such by the New Jersey Department of the Treasury in one or more of the listed categories; and
- Impact Zone Businesses: located in an Impact Zone, owned by people from Impact Zones, or employ residents of Impact Zones. Impact Zones are municipalities with a large population, high unemployment rate, or high numbers of crime or arrests for marijuana.
Cannabis business license applications and applicants will be reviewed, scored, approved, and issued, such that:
- Social Equity Businesses, Diversely Owned Businesses, and Impact Zone Businesses always have priority over other license applicants;
- Conditional license applicants always have priority over annual license applicants;
- Microbusinesses license applicants always have priority over standard cannabis business license applicants;
- License applicants given bonus points pursuant to N.J.S.A. 24:6I-36(d)(2) have priority over license applicants with no bonus points; and
- The priority of the review, scoring, and approval of license applications and issuance of licenses is consistent with meeting the market demands of the State, with the Act, and this chapter.
The rules ensure that New Jersey has a safe cannabis industry that is well-regulated and does not market products to young people under the age of 21. Advertising is restricted so that cannabis is primarily marketed to those of legal age.
The Cannabis Regulatory Commission (CRC) also put rules in place to prioritize small businesses, called Microbusinesses. There will be no cap on the number of microbusiness licenses. To qualify as a microbusiness, the following criteria must be met:
- Have a smaller footprint than a standard cannabis business
- 100% of the ownership interest must be held by current NJ residents who have resided there for the past consecutive two years at time of application
- 51% of the ownership must reside in the municipality in which the business is seeking to operate
- No more than 10 employees at a time
- Retail must be smaller than 2500 square feet
- Cultivator – can possess no more than 1000 cannabis plants per month
In addition to the state regulations, municipalities can enact ordinances that:
- Authorize certain types of cannabis businesses;
- Set numerical limits on the numbers of certain types of businesses operating within the jurisdiction;
- Restrict hours of operation and locations;
- Create local licensing requirements and set civil penalties;
- Restrict types of cultivation;
- Establish a 2% transfer tax; and
- Communicate the municipality’s preference for licensure to the Commission.
Updates will be posted on the New Jersey Cannabis Regulatory Commission’s Website.
Application information can be found here.