Cannabis business licensing in New Jersey is one of the fastest-growing topics in the state. With the recent vote legalizing recreational cannabis in the Garden State, it’s safe to say ganjapreneurs are well on their way towards fulfilling their New Jersey cannabusiness dreams.
But what about the licensing? Do you need an NJ cultivation license to grow flower? And what license will you need to open recreational dispensaries in New Jersey?
We’ll answer these questions and more in this article. But let’s first discuss the history of legalization in New Jersey and the current legislation in place.
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New Jersey Cannabis Legalization: The History
Governor Jon Corzine signed the Compassionate Use Medical Marijuana Act, S. 119 into law on January 18, 2010. This was his last day in office – some might even say this was a goodbye gift.
Through the Compassionate Use Medical Marijuana Act, qualified patients were granted access to medical cannabis through six Alternative Treatment Centers (ATC). These are non-profits that hold legal cannabis licenses from the state to produce and sell medical marijuana.
However, the program’s enrollment wasn’t nearly as high as one might expect; between resistance from former Governor Chris Christie, high prices, and regulatory limitations, the program didn’t sufficiently meet the demand for an accessible way to obtain medical marijuana in New Jersey.
Then, in 2016 and 2017, the law changed to include post-traumatic stress disorder and chronic pain. As a result, 24 new medical marijuana ATC licenses were put on hold because of a lawsuit.
By December 15, 2019, adult-use legalization was put on the voters’ 2020 ballot after the state legislature passed a cannabis referendum bill. The vote amended the state constitution, thereby legalizing the cultivation, processing, and retail sale of cannabis for adults over 21 years of age. This constitutional amendment took effect on January 1, 2021.
Looking at the New Jersey Cannabis Market’s Metrics
So many people are looking into the cannabis business licensing New Jersey process, and it’s not hard to imagine why. There’s a lot of potential for the cannabis sector in this state.
New Jersey is ripe for the cannabis sector’s expansion. With an impressive population of 8.9 million and 6 licensed cannabis businesses in place, we can expect growth. At this point, the Garden State has 6 companies that are allowed to have up to 3 dispensaries operating. The state has 12 licensed New Jersey dispensaries. However, only nine are currently open.
The state has around 95,000 medical marijuana patients. These products’ taxes are currently at 4% of sales until June 30, 2021, 2% from July 1, 2021 to June 20, 2022, and will drop to 0% after July 1, 2022. What’s unique about New Jersey’s adult-use cannabis market is that, so far, the state hasn’t implemented an excise tax on marijuana. Thus, regular sales tax will apply, and the local governments could demand a tax of up to 2% on retail sales.
Cannabis Business Licensing in New Jersey
At this point, cannabis Grower, Wholesaler, Distributor, Processor, Retailer, and Delivery licenses have not been made available. The state is waiting until it adopts a set of rules to govern these cannabis licensing.
For the first 18 months, the state’s restrictions against vertical integration will be established to prevent premature monopolies from developing. Thus, cannabis businesses will not obtain licenses for growing and distributing.
For the first two years of legal cannabis sales in New Jersey, the marijuana grower licenses available will be capped at 37 licenses. This limit will not apply to micro-licenses (businesses with ten or fewer team members).
At this point, the state has 12 licensed Alternative Treatment Centers (ATCs). These are all vertically-integrated non-profit medical license holders. Currently, 9 of these ATCs are in operation. The state will offer adult-use licenses to these organizations first.
A legal case is still holding up the 2019 medical licensing round. There’s a chance that these licenses will be given prior to the state adopting its final rules. If this happens, these license holders will also be given initial access to the adult-use licenses.
New Jersey is also incorporating a social equity program as part of the bill. The state will have an office within the CRC to ensure social equity. Many of these licenses will be granted to women, disabled veterans, minorities, and lower-income applicants. Once the legislation passes, the newly-formed Cannabis Regulatory Commission (CRC) has 180 days to implement its regulatory rules.
How to Start a Cannabis Business in New Jersey: Step-by-Step
You’ll need to do several things before you apply for cannabis business licensing in New Jersey. While not all are essential, they’ll make the entire process easier.
First, you’ll look over S. 21. This is the foundation of the state’s adult-use program. So, if you’re planning to participate in this program, it’s essential to understand it.
Wait for the draft rules from the CRC. Once these rules are released, we’ll have a better idea regarding what we’ll have to do to remain compliant.
Look for cannabis real estate in New Jersey. High-traffic areas that are currently zoned for medical cannabis may allow adult-use cannabis operations to operate within these borders, as well.
Work on preliminary plans comparable to medical cannabis license applications. Minimally speaking, you’ll want to have the following for your New Jersey cannabis license application, depending on which apply to your situation:
- Security plan
- Environmental impact plan
- Background of principals, board members, & owners
- Quality control & quality assurance plan
- Community engagement plan
- Financing plan
- Research contributions
- Manufacturing plan
- Cultivation plan
- Dispensary plan
- Labor compliance plan
- Workforce and job-creation plan
- Minority-owned, veteran-owned, or women-owned business certification
Considering Cannabis Business Licensing in New Jersey?
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