Cannabis Consulting in New Jersey | Expert Cannabis Application Advisors | Updated September 2021
Updated September 2021 | Cannabis Consulting in New Jersey | On August 19, 2021, New Jersey published the rules for adult-use cannabis businesses, thereby creating the structure for a billion-dollar market. New Frontier Data estimates that the New Jersey cannabis market will reach $1 billion in 2023. Thus, New Jersey is bound to become the largest cannabis market on the east coast, that is, until New York starts their Adult-Use sales.
Are you an entrepreneur or investor interested in winning a cannabis license in New Jersey? Would you like to become a cannabis business owner in New Jersey?
If so, now is the time to begin preparing to apply for a cannabis license. Herein, from years of cannabis consulting in New Jersey, we have put together this article to provide you with information and advice that will help you win a license.
Our cannabis consultants in New Jersey are experts at winning cannabis licenses. We have one of the highest success rates in the industry (90.12%) and have won licenses in 27 US States and 6 countries. Contact us for a head start on your cannabis license application and additional cannabis consulting services in New Jersey.
Current Marijuana Market in New Jersey
Let’s take a look at how the current medical marijuana market in New Jersey is functioning. First, New Jersey has currently only issued 12 vertical medical marijuana business licenses, and only 10 are in operation. With that, according to the Marijuana Business Daily Factbook, the state plans to issue an additional 24 vertical and stand-alone licenses.
There are currently 15 stand-alone dispensaries and 5 stand-alone cultivators. Additionally, only 1.17% of the population in New Jersey are registered as medical marijuana patients. Although this percentage is low, it still accounts for around 104,000 individuals within the state. Our cannabis consultants in New Jersey expect sales to skyrocket once the state allows all adults to purchase marijuana in a legal manner.
Take a look at this chart from Marijuana Business Daily about current statistics on New Jersey’s medical marijuana market:
For a further breakdown of the market, speak with our New Jersey Cannabis Consulting team.
Overview of Adult-Use Cannabis Laws and Rules in New Jersey
The New Jersey Cannabis Regulatory, Enforcement Assistance, and Marketplace Modernization Act outlines the rules and regulations for adult-use cannabis businesses and consumers. Similarly, New Jersey’s Cannabis Regulatory Commission will oversee the adult-use cannabis program, including the scoring and issuing of cannabis business licenses.
New Jersey’s Adult-Use Cannabis Act
Our New Jersey Cannabis Consultants suggest familiarizing yourself with the act, as it will help you understand what a takes to win a license.
Don’t have time to go through the entire act?
Don’t worry, our New Jersey cannabis consultants are extremely knowledgeable about the bill and will ensure that all of the correct information is on your application. If you want to know more about specific material within the act, we outline some important sections for you below:
- Section 3- Definitions
- Section 18- Regulation of Cannabis
- Section 20- Class 1 Cannabis Grower License
- Section 21- Grow Canopies for Licensed Cannabis Growers
- Section 22- Class 2 Cannabis Processor License
- Section 23- Class 3 Cannabis Wholesaler License
- Section 24- Class 4 Cannabis Distributor License
- Section 25- Class 5 Cannabis Retailer License
- Section 26- Class 6 Cannabis Delivery License
- Section 27- Personal Use Cannabis Handlers
- Section 32- Municipal Regulations or Ordinances
- Section 33- Marketplace Regulations
- Section 35-Medical Cannabis Provisions
- Section 40- Cannabis Regulatory, Enforcement Assistance, and Marketplace Modernization Fund
- Section 44- Personal Use of Cannabis
- Section 45- Licensee and Consumer Protections
- Section 48- Lawful Operation of Cannabis Establishments, Distributors, and Delivery Services
- Section 49- Contract Enforceability
- Section 50- Federal and Interstate Relations
- Section 51- Limitations
Contact one of our cannabis application writers in New Jersey for a breakdown of the act and licensing process.
Initial Rules for New Jersey’s Recreational (aka adult- or personal- use) Cannabis Market
Our New Jersey Cannabis Consultants provided an overview of the act that introduced recreational cannabis in New Jersey. More recently, the state has published the approved rules and regulations that will officially establish the recreational cannabis industry in New Jersey. The initial rules for New Jersey recreational cannabis market can be found here.
Types of Adult-Use Cannabis Licenses in New Jersey
If you’re reading this article, you’re likely an entrepreneur or investor hoping to start a cannabis business in New Jersey. However, you must apply for and win a license for the type of adult-use cannabis business you would like to operate. Each license is unique in that every license type permits you to conduct different activities.
For instance, if you want to grow cannabis then you’ll want to apply for a cultivator or microbusiness license. However, if you want to sell cannabis directly to consumers, then the retail license makes more sense for you.
Below is a video of one of our New Jersey Cannabis License Experts discussing the various types of adult-use marijuana licenses in New Jersey:
Six classes of licenses will be available for the cannabis market in New Jersey. These include:
Importantly, the commission will ensure at least 25% of the total licenses issued to be issued to microbusinesses. Put differently, you can apply as a microbusiness for any of the license types listed above, and the number of licenses for each class must be 25% issued to Microbusinesses.
Microbusiness License in New Jersey
Are you wondering “what is a cannabis microbusiness license in New Jersey?”
Well, a New Jersey microbusiness must meet the following requirements:
- 100% owned by current New Jersey residents that have resided in New Jersey for at least the past two consecutive years;
- at least 51% of total persons, including owners, directors, officers, and employees, shall be residents of the municipality, or the bordering municipality, in which the microbusiness is located;
- Employ no more than 10 employees
- Operate a cannabis establishment occupying an area no more than 2,500 square feet
- Possess no more than 1,000 cannabis plants each month
- In the case of a cannabis processor, acquire and process no more than 1,000 pounds of cannabis in dried form each month;
- In the case of a cannabis wholesaler, acquire for resale no more than 1,000 pounds of cannabis in dried form, or the equivalent amount in any other form, or any combination thereof, each month; and
- In the case of a cannabis retailer, acquire for retail sale no more than 1,000 pounds of cannabis in dried form, or the equivalent amount in any other form, or any combination thereof, each month.
- No owner, director, officer, or other person with a financial interest who also has decision making authority for the microbusiness shall hold any financial interest in any other licensed cannabis establishment, distributor, or delivery service, whether or not a microbusiness;
- No owner, director, officer, or other person with a financial interest who also has decision making authority for a licensed cannabis establishment, distributor, or delivery service, whether or not a microbusiness, shall hold any financial interest in a microbusiness; and
- The microbusiness shall not sell or transfer the license issued to it.
Important to note, a microbusiness holding an annual license may submit an application to convert from a microbusiness to a standard cannabis business and expand beyond the requirements listed above.
Contact our New Jersey cannabis consultants to find what marijuana business license works best for your goals.
Once you’ve decided on a license, the next step is to learn the adult-use license application process in New Jersey. Afterward, our cannabis consulting team in New Jersey will provide the step-by-step guide for winning an adult-use cannabis license in New Jersey.
Number of Licenses Available
During the 24 month period after February 22, 2021, New Jersey will limit the number of cannabis cultivation licenses to 37 (including expanded Alternative Treatment Centers).
Microbusinesses with cannabis cultivator licenses shall not count towards this cannabis cultivator license limit of 37.
Following the 24-month period after February 22, 2021, the Commission shall review the limit of 37 cannabis cultivator licenses and issue new licenses to meet the market demands of the State
For the other license types, New Jersey will determine the cap on the number of licenses based on market demand. Put differently, the Commission shall annually evaluate whether the number of each class of cannabis business is sufficient to meet the market demands of the State.
Important to note, Microbusinesses shall not count towards any limitations on the number of cannabis business licenses issued by the Commission.
Timeline for New Jersey Cannabis Business License Applications
Since the New Jersey Cannabis Commission published the rules on August 19, 2021, the commission now has 30 days to begin accepting license applications.
Therefore, we can expect the license application window to open by September 19, 2021.
Not more than 30 days after the receipt of a conditional license application, the Commission shall make a determination on the application.
Within 14 days of receipt of the conditional license application, the Commission shall forward a copy of an application to the municipality in which the applicant desires to operate a proposed cannabis business.
Within 28 days of receipt of a license application from the Commission, a municipality shall inform the Commission whether such license application complies with its ordinance or regulation, as may be applicable.
Application Process for New Jersey Cannabis Licenses
The Commission’s initial rules establish a licensure process in which applications are reviewed as they are received on a continuous rolling-basis, with Social Equity, Impact Zone, and Diversely Owned Businesses always getting priority over others. During the period where the Commission is accepting licenses, the Commission will accept license applications on a continuous rolling basis.
Importantly, the rules establish and prioritize small businesses, referred to as “microbusinesses,” and the conditional licensure process, which creates a pathway for entrepreneurs into the industry. Conditional applicants will only need to submit background disclosure information to the CRC, along with a business plan and a regulatory compliance plan. If approved, they will then be given 120 days to find an appropriate site, secure municipal approval, and apply for conversion to an annual license.
On the other hand, you can apply directly for an annual license only if you are a current medical cannabis operator in New Jersey.
Microbusinesses, which are limited to 10 employees and premises no larger than 2,500 square feet, will also be prioritized and, if successful, allowed to apply to expand their business in accordance with consumer demand (more information on Microbusinesses found here).
Our New Jersey Cannabis Consulting firm breakdown the conditional license application process below.
Applying for a Conditional Cannabis Business License
First, you must submit a separate application for each type of license and for each physical address at which you seek to operate.
Secondly, you must disclose and submit the following material for the Commission to evaluate:
- The mailing and physical address of the license applicant’s proposed cannabis business premises;
- The federal and State tax identification numbers for the license applicant;
- Documentation of a valid Business Registration Certificate on file with the Division of Revenue and Enterprise Services in the Department of the Treasury;
- Information about the license applicant entity, including its legal name, any registered alternate name under which it may conduct business, and a copy of its articles of organization and bylaws;
- The business plan and management operation profile for the proposed cannabis business;
- The plan by which the license applicant intends to obtain appropriate liability insurance coverage for the proposed cannabis business;
- A regulatory compliance plan, which shall detail the plan by which the license applicant shall comply with the remaining regulatory requirements to convert to an annual license.
- An affidavit that the statements included in the application are true and correct, sworn by the license-holder representative;
- An authorization to release all information pertaining to the license-holder as requested by the Commission, signed by the license-holder representative; and
- A waiver of liability for any damages results to the license-holder from any disclosure or publication in any manner, other than a willfully unlawful disclosure or publication, of any information acquired during the Licensing process, signed by the license-holder representative.
- Any applicable fees required by N.J.A.C. 17:30-7.17; and
- Any other application requirement established by the Commission in a Notice of Acceptance of Application published in the New Jersey Register issued pursuant to N.J.A.C. 17:30-6.1.
Thirdly, to qualify you must disclose and submit:
- List of all owners, principals, and employees of the license applicant, including their names, addresses, dates of birth, resumes, and a photocopy of their driver’s licenses or other state or federal government-issued form of identification which may be used to prove each person is at least 21 years of age;
- List of the owners of the license applicant who have resided in this State for at least two years as of the date of the application, and documentation of such residency;
- List of the owners of the license applicant and the percentage of each owner’s ownership interest;
- List of any proposed management services contractors, financial sources or vendor-contractors;
- Personal history disclosure forms for any owners, principals, financial sources or management services contractors of the license applicant, as applicable;
- Entity disclosure forms for any owners, principals, financial sources or management services contractors of the license applicant, including entity formation documents, any proposed or signed management services or financial source agreements, and tax returns, as applicable;
- Proof that each owner of the conditional license applicant who has decision-making authority has, for the immediately preceding taxable year, an adjusted gross income of no more than $200,000 or no more than $400,000 if filing jointly with another;
- A certification that each owner of a license applicant applying for a conditional cannabis business license who has decision-making authority does not have any ownership interest in a license applicant applying for or license-holder holding an annual cannabis business license;
- For each owner, principal, or employee of a license applicant or license-holder as well as each staff member of a license applicant’s or license-holder’s management services contractor that participates in the obtaining, possession, securing, cultivating, manufacturing, transporting, selling, delivering, or destroying cannabis items, written consent to be fingerprinted and to undergo a criminal history record background check and any evidence of rehabilitation pursuant to N.J.A.C. 17:30-7.12;
- For each owner, principal, and employee of the license applicant, certification confirming the person’s submission to the jurisdiction of the courts of the State and pledging to comply with all of the requirements of the laws of the State pertaining to the Commission;
- For a license applicant that is a diversely owned business, the certification that the license applicant is one or more of a minority business, women’s business, or disabled veterans’ business, as applicable;
- For a license applicant that is an impact zone business, evidence from any qualifying owner, passive investor, or employee proving the qualification of the person under the impact zone business criteria pursuant to N.J.A.C. 17:30-6.5;
- For a license applicant that is a social equity business, evidence from any qualifying owner or passive investor attesting to the qualification of the person under the social equity business criteria pursuant to N.J.A.C. 17:30-6.6; and
- For a microbusiness license applicant, proof that at least 51% of the total number of persons included in the microbusiness license applicant or license-holder, including all owners, principals, and employees, are residents of either of the municipality in which the microbusiness is or will be located, or of a municipality bordering such a municipality, at the time of the application.
More specifically, you are qualified to hold a conditional license where:
- No owner, principal, employee, or volunteer of the license applicant or license-holder has a disqualifying conviction pursuant to N.J.A.C. 17:30-7.12(d) without evidence of rehabilitation pursuant to N.J.A.C. 17:30-7.12(e);
- At least one owner of the license applicant shall have resided in this State for at least two years as of the date of the application; and
- Each owner in the conditional license applicant who also has decision-making authority has, for the immediately preceding taxable year, an adjusted gross income of no more than $200,000 or no more than $400,000 if filing jointly with another.
We understand that the information listed above can be a bit daunting. For this reason, we encourage you to reach out to speak with your cannabis consulting firm in New Jersey. We can simplify the process for you and help you win a New Jersey Cannabis Conditional License.
Conditional Cannabis Business License Phase
If you meet all of the criteria listed above, the Commission will issue you a New Jersey Conditional Cannabis Business License. Upon awardance, the 120-day window to submit a conversion application for an annual license begins.
During the conditional licenses phase, a conditional license-holder shall:
- Establish control of the proposed site, through lease, purchase or other means, for the cannabis business;
- Gain municipal approval; and
- Develop and submit a conditional license conversion application.
Importantly, during the conditional license phase, a conditional license-holder shall not engage in purchasing, possessing, selling, cultivating, manufacturing, or selling cannabis or cannabis products.
Luckily, you can apply for a 45-day extension of the conditional license if you are unable to meet the deadline. However, the Commission shall grant an extension of the conditional license where the conditional license-holder has submitted a complete conditional license conversion application, during the time the complete conditional license conversion application is under consideration by the Commission.
Applying for a New Jersey Annual License (aka Conditional Cannabis Business Conversion Application)
Prior to the expiration of the conditional license phase, a conditional license-holder shall submit a conversion application to the Commission for an annual license.
Once submitted, the Commission will review applications for completeness and then score.
According to our marijuana business consultants in New Jersey, the conversion application shall include the following requirements:
- A description of the proposed location and its surrounding area,
- Evidence of compliance with local codes and ordinances
- Zoning approval, which shall consist of a letter or affidavit from appropriate officials of the municipality
- Proof of local support
- Documentation demonstrating that the license applicant will have final control of the premises upon approval of the application
- An environmental impact plan,
- A safety and security plan
- A community impact, social responsibility, and research statement
- A workforce development and job creation plan, which include an optional diversity plan;
- Standard operating procedures for:
- Adverse Event Reporting;
- Quality assurance and quality control;
- Packaging and Labeling;
- Inventory Control, Storage, Diversion Prevention;
- Waste Disposal, Sanitation;
- Cultivation, manufacturing, retail sale, delivery, secure transport, as applicable, based on the class of license sought;
- Accounting and tax compliance; and
- The reporting of test results, as applicable, based on the class of license sought
- An attestation signed by a bona fide labor organization stating that the license applicant has entered into a labor peace agreement with such bona fide labor organization (except for microbusinesses)
- For a social equity business, diversely owned business and impact zone business, evidence the license applicant is still in compliance with the requirements of the designations.
Scoring Process for Cannabis Applications in New Jersey
Each cannabis application in New Jersey will be scored and reviewed based upon a point scale. The New Jersey Cannabis Commission determines the number of points, point categories, and the system of point distribution by regulation. From then, the commission ranks the applicants based on the number of points they received.
Side note: The commission has the authority to adjust the point system or utilize a separate point system.
Lastly, if two or more applicants have the same number of points, those applicants shall be grouped together. If there are more eligible participants in this group than the remaining number of licenses available, the commission will utilize a public lottery to determine which applicants win a license.
Scoring Conditional Cannabis Business Applications
First, applications shall be reviewed for completeness and then scored in accordance with the criteria described above.
More specifically, the Commission shall approve a conditional license applicant that:
- Has submitted a complete conditional license application
- Has scored sufficiently high to be issued a conditional license in accordance with the criteria included in the Notice of Application
- Is qualified to hold a conditional license pursuant to N.J.A.C. 17:30-7.4;
- Has submitted application fees.
In contrast, if an application is denied, the Commission shall provide the denial to the applicant in writing, which shall include:
- Notice of the denial of the conditional license and the specific reason for the denial; and
- The opportunity to request an administrative hearing within 45 days after the date of the denial.
Scoring Annual Cannabis Business License Applications (aka conversion application)
The Commission shall approve a license applicant for conversion to an annual license where the license applicant:
- Has submitted a complete conditional license conversion application in accordance with N.J.A.C. 17:30-7.8
- Has scored sufficiently high to be issued an annual license in accordance with the criteria included in the Notice of Application pursuant to N.J.A.C 17:30-6.1 and N.J.A.C. 17:30-7.8;
- That has been deemed qualified for an annual license pursuant to N.J.A.C. 17:30-7.11;
- Has submitted its conditional conversion application fee, as applicable, pursuant to N.J.A.C. 17:30-7.17; and
- Has submitted sufficient information for the Commission to determine that it is implementing the plans, procedures, protocols, actions, or other measures set forth in its conditional license application and is in compliance with all applicable conditions.
On the other hand, if an application is denied, the Commission shall provide the denial to the applicant in writing, which shall include:
- Notice of the denial of the annual license and the specific reason for the denial; and
- The opportunity to request an administrative hearing within 45 days after the date of the denial.
To ensure you receive the highest score on your New Jersey Cannabis Business License, we recommend you work with our cannabis license experts. We can increase your chances of winning a cannabis license in New Jersey.
Criteria that the Commission Grades
Now you know that the commission grades are based on a point system, but what exactly do they grade?
The criteria differ based on what cannabis business license you choose to apply for. Our New Jersey marijuana consultants summarize the various narratives that the commission will grade for each license type.
Required Criteria for Cannabis Grower License in New Jersey
- Quality control and quality assurance plan
- State-authorized cultivation of personal use cannabis
- Conventional horticulture or agriculture, familiarity with good agricultural practices, any relevant certifications or degrees
- Recall plans
- Packaging and labeling plans
- Inventory control and tracking plans
- Analytical chemistry and testing of personal use cannabis
- Water management practices
- Odor mitigation practices
- Onsite and offsite recordkeeping
- Strain variety and plant genetics
- Pest control and disease management practices
- Water disposal plans
- Compliance with applicable laws and regulations
Utilize our cannabis consulting services in New Jersey to make sure you have all of the correct information in order to grow cannabis.
Required Criteria for Cannabis Processor License in New Jersey
If you want a cannabis processor license in New Jersey, you need to make sure to include additional information within your application, such as:
- State-authorized manufacture, production, and creation of cannabis products using appropriate extraction methods
- A list of product formulations or products proposed to be manufactured with estimated cannabinoid profiles
- Intended use and sourcing of all non-cannabis ingredients used within the manufacture, production, and creation of cannabis products
However, you do not need plans that are specific to the cultivation of cannabis in New Jersey.
Required Criteria for Cannabis Retailer License in New Jersey
Additionally, if you want a cannabis retailer license in New Jersey, you need to submit this additional information:
- State-authorized sales of cannabis items to consumers
- Point-of-sale software or system plan
- Personal use cannabis product evaluation procedures
- Routes of administration, strains, varieties, and cannabinoid profiles of personal use of cannabis
Now that you’re familiar with the application process and scoring procedure, let us discuss the fees you will incur in pursuit of a license.
Municipal Control of Adult-use Cannabis Business Licenses in New Jersey
Municipalities have a significant influence on who wins a New Jersey Cannabis Business License. In fact, they will report to the state their preference of who to award a license to. Put differently, a municipality may provide input to the Commission as to the municipality’s preferences for licensure.
Therefore, it is extremely important to gain local support and make sure you’re in compliance with all municipal ordinances.
More superficially, a municipality may:
- Impose a separate local licensing requirement;
- Establish a numerical limit on the number of cannabis businesses;
- Govern the location, manner, and times of operation of cannabis businesses, except for the times of operation of a delivery service, including an ordinance or regulation that requires a cannabis business premise to be a certain distance from the closest church, synagogue, temple, or other place used exclusively for religious worship; or from the closest school, playground, park, or child daycare facility;
- Enact and amend an ordinance or regulation to prohibit the operation of any one or more classes of cannabis business within the jurisdiction of the municipality.
Additionally, you will want to obtain zoning approval from the municipality for the proposed location of the cannabis business. This shall consist of a letter or affidavit from appropriate officials.
Likewise, a municipality may demonstrate proof of local support for the suitability of a cannabis business’s proposed location by indicating that the intended location is appropriately located or otherwise suitable for activities related to the operations of the proposed cannabis business.
However, in no case may a municipality restrict the transportation of cannabis items through or delivery of cannabis items within the municipality by adopting an ordinance or any other measure.
For marijuana business consulting services in New Jersey, click the button below. We can assist you with your municipal and state cannabis license submissions. Let us win you a New Jersey cannabis license.
A municipality may impose a transfer tax or user tax on the sale of any usable cannabis or cannabis products by a cannabis establishment located within the municipality, which may include:
- sales between cannabis establishments;
- sales of cannabis items to consumers; or
- any combination thereof.
The rate of a transfer tax established shall be at the discretion of the municipality. However, the municipal tax rate shall not exceed:
- 2% of the receipts from each sale by a cannabis cultivator;
- 2% of the receipts from each sale by a cannabis manufacturer;
- 1% of the receipts from each sale by a cannabis wholesaler; or
- 2% of the receipts from each sale by a cannabis retailer.
Fees (Application and License Fees)
New Jersey recently published the application and license fees for adult-use cannabis businesses. Our cannabis consultants created the infographic below summarizing the cannabis application and license fees in New Jersey.
In short, micro-businesses will pay half of the fees issued for non-microbusiness licenses.
Also, if you transfer more than 50% of the ownership of your license, you must pay a $20,000 fee.
For New Jersey Cannabis Consulting, reach out and speak with one of our license experts today.
Preferred Applicant’s (Bonus Points) for a New Jersey Cannabis License Application
The rules establish three types of cannabis businesses that will receive priority review and approval in the application process:
- Social Equity Businesses, which are owned by people who have lived in economically disadvantaged areas of the state or who have past convictions for cannabis offenses;
- Diversely Owned Businesses, which are 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, which are located in an Impact Zone, owned by people from Impact Zones, or employ residents of Impact Zones. Note: Under the statute, Impact Zones are municipalities with a large population, high unemployment rate, or high numbers of crime or arrests for marijuana.
Social Equity Businesses, Diversely Owned Businesses, and Impact Zone businesses will be prioritized in the licensure process so that their applications are reviewed before other applicants – regardless of when they apply (see below for definition of these types of businesses).
The Commission shall review, score, and approve conditional and annual cannabis business license applications, 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 (defined above) license applicants always have priority over standard cannabis business license applicants;
- License applicants given bonus points (see below) 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.
Additionally, in ranking the applications, the commission will give bonus points to the following applicants who:
- Include a significantly involved person who has resided in New Jersey for at least 5 years.
- Are party to a collective bargaining agreement with a labor organization that currently represents or is actively seeking to represent cannabis workers in New Jersey or another state
- Affirm they will use their best efforts to utilize building trades labor organizations in the construction of facilities associated with the licensed cannabis business in New Jersey
- Submit an attestation affirming they have a project labor agreement, which is a form of pre-hire collective bargaining agreement covering terms and conditions of a specific project. This includes labor issues and worker grievances associated with any construction or retrofit of facilities.
- The commission gives special consideration to applicants that enter into agreements with an institution of higher education to create an integrated curriculum involving growing, processing, wholesaling, distributing, and retail sales of personal use cannabis and cannabis items.
- The commission prioritizes applications on the basis of Impact Zones (explained below).
Make sure to utilize our cannabis consulting services in New Jersey for assistance in scoring high on a New Jersey marijuana business license application.
Diversly Owned Businesses in New Jersey
You may be wondering “what is a diversely owned cannabis business in New Jersey?”
A “Diversely Owned Business” means a license applicant or a license-holder that has been certified as a minority business, as a woman’s business, as a disabled-veterans’ business, or as any combination thereof, by the Division of Revenue and Enterprise Services in the Department of the Treasury.
More specifically, at least 51% ownership must be held by diverse individuals, and the daily operations are controlled by one or more of the diverse individuals with ownership.
If you’re applying as a Diversely Owned business, you should begin the certification process now, as it may take a few weeks.
Social Equity Business in New Jersey
A “Social Equity Business” means a license applicant or license-holder that meets one of the following criteria:
More than 50% of the ownership interest of the license applicant or license-holder is held by one or more persons that demonstrate one of the following criteria:
- At the time the initial application is submitted, have lived in an Economically Disadvantaged Area for 5 of the 10 preceding years; and
- Are, at the time the initial application is submitted and based on the preceding year’s income, a member of a household that has a household income that is 80 percent or less of the average median household income in the State, as determined annually by the U.S. Census Bureau.
More than 50% of the ownership interest of the license applicant or license-holder is held by one or more persons who are eligible to be pronounced rehabilitated in accordance with N.J.A.C. 17:30-7.12(e), if necessary, and have been adjudicated delinquent for or convicted of, whether expunged or not, in this State, another state, or federally:
- at least two marijuana- or hashish-related disorderly persons offenses, or
- at least one marijuana- or hashish-related indictable offense.
At this point, you are likely asking “what is an impact zone?”. The State, luckily, has published the criteria for an area to qualify as an Impact Zone in New Jersey.
Impact Zones include zones for which past criminal enterprises contributed to higher concentrations of law enforcement activity, unemployment, and poverty within parts of or throughout these zones.
More specifically, an Impact Zone is any municipality that:
- Has a population of 120,000 or more;
- Ranks in the top 40% of municipalities in the State for marijuana-related arrests, Has a crime index total of 825 or higher based upon the indexes listed in the annual Uniform Crime Report by the Division of State Police, and has a local average annual unemployment rate that ranks in the top 15% of all municipalities in the State;
- is a municipality located in a county of the third class, based upon the county’s population according to the most recently compiled federal decennial census as of the effective date of P.L.2021, c.16 (C.24:6I-31 et al.), that meets all of the criteria set forth in the second bullet point other than having a crime index total of 825 or higher; or
- is a municipality located in a county of the second class, based upon the county’s population according to the most recently compiled federal decennial census as of the effective date of P.L.2021, c.16 (C.24:6I-31 et al.):
- with a population of less than 60,000 according to the most recently compiled federal decennial census, that for calendar year 2019 ranks in the top 40 percent of municipalities in the State for marijuana- or hashish-related arrests for violation of paragraph (4) of subsection a. of N.J.S.2C:35-10; has a crime index total of 1,000 or higher based upon the indexes listed in the 2019 annual Uniform Crime Report by the Division of State Police; but for calendar year 2019 does not have a local average annual unemployment rate that ranks in the top 15 percent of all municipalities, based upon average annual unemployment rates estimated for the relevant calendar year by the Office of Research and Information in the Department of Labor and Workforce Development; or
- with a population of not less than 60,000 or more than 80,000 according to the most recently compiled federal decennial census; has a crime index total of 650 or higher based upon the indexes listed in the 2019 annual Uniform Crime Report; and for calendar year 2019 has a local average annual unemployment rate of 3.0 percent or higher using the same estimated annual unemployment rates.
In ranking New Jersey cannabis license applications in respect to impact zones, the commission will prioritize:
- Applicants that intend to locate their business in an impact zone, and the impact zone has less than 2 licenses so that there will be prioritized distribution so that there are at least 2 licensees in each impact zone.
- Applicants who 50% ownership is held by current residents of impact zones and have resided there for 3 or more consecutive years (the commission will award 25% of the total licenses to these individuals).
- Applicants who present a plan to employ 25% of employees who reside in impact zones (at least 25% of the impact zone employees must live in the impact zone nearest to the cannabis business).
For Cannabis consulting in New Jersey, please feel free to reach out. We can break down the best strategy for diverse, social equity, and Impact Zone businesses.
Tips for winning an adult-use cannabis business license in New Jersey
To begin with, since legalization is still new so there isn’t too much information on cannabis license acquisition in New Jersey. With that, there are still some important steps to take for you to get your foot in the door within this market. It is important to know these steps if you want to know how to sell or grow marijuana in New Jersey.
A license is required to operate a cannabis business in New Jersey. However, the license application process is extremely competitive, with thousands of applications submitted and less than a hundred awarded.
From writing the business plan to recruiting an experienced team, navigating the process of starting a New Jersey Cannabis Business can be daunting. More than likely, you are preoccupied with other matters that prevent you from committing your full attention to winning a license to operate a cannabis business in New Jersey.
Thus, when individuals ask how to start a cannabis business in New Jersey?
We highly recommend engaging experts in license acquisition to assist with the competitive license application. For this reason, contacting our New Jersey cannabis consultants will give you a leg up o the competition, as our consultants can provide you with the expertise needed to put together a winning competitive application.
Step 1: Learn the New Jersey Cannabis Rules and Application Process
The first step you should take when applying for a license is to learn the rules of the State and the local municipality that would like to locate your business. New Jersey will place a heavy emphasis on whether you are able to comply with the State’s regulation. This must be demonstrated clearly in your application. Put differently, your Application should reflect your knowledge of and plans for complying with New Jersey Cannabis Laws.
Also, you will want to look over the application process and requirements. Do you meet the capital requirements? Do you have the resources and know-how to complete every section of the Application? Some applications may require you to write business plans with several hundred pages. If you are unfamiliar with this process or have concerns, reach out to our New Jersey cannabis consulting firm to learn how we can help you put together a winning cannabis application.
Step 2: Choose the New Jersey Cannabis License you want to Apply for
Secondly, you are going to want to choose which cannabis license in New Jersey you would like to apply for. Each marijuana license will give you permission to conduct a different set of activities.
After you’ve decided on the type of cannabis business that you are interested in and most qualified for, the next step is to start putting together a team to obtain the license. When putting together a team, you should consider a team that qualifies for Social Equity Status. What is social equity status? Our New Jersey Cannabis Consultants explain social equity below.
Step 3: Engage a New Jersey Cannabis License Consultant
At this point, we recommend engaging a New Jersey Cannabis Consultant. You will want to work with a marijuana business consultant that is familiar with New Jersey rules and regulations, and has experience in application writing and winning licenses.
Luckily, our New Jersey Cannabis Consulting Firm consists of the best cannabis application writers in the world. We helped our clients win New Jersey medical marijuana business licenses, and we’re prepared to do the same for adult-use licenses.
Our cannabis business consultants will manage your license application from start to finish. We’ll also provide executive coaching and guidance on all aspects involved in winning a cannabis license.
Reach out today to learn more about cannabis consulting in New Jersey and how we can help you become a cannabis business owner in New Jersey.
Step 4: Build your Team of Cannabis Experts in New Jersey
After you have chosen the type of license you intend to apply for and engaged consultant, the next step is to build a team. The team that you list on your application is extremely important. The state of New Jersey will grade your application based on your team’s previous experience in cannabis and related fields. In other words, your team should reflect your ability to operate a New Jersey Cannabis Business that is compliant, responsible, and safe.
Equally important to your team’s experience, is their ability to qualify as a social equity applicant (see below for definition of social equity in New Jersey). The State of New Jersey places a priority on Applicants that qualify for Social Equity Status. Put differently, it is nearly impossible to win a license if you are not applying as a Social Equity Applicant.
Also, having a diverse team is important for receiving a higher score.
Would you like assistance building a team for your cannabis application in New Jersey?
Fortunately, our marijuana consulting firm in New Jersey offers talent acquisition and executive recruiting services. We can help you find the right team so that you can receive the highest score on your cannabis license application. Reach out today to speak with one of our cannabis license advisors in New Jersey.
Step 5: Raise Capital
Now you’re ready to raise capital to fund the license acquisition and start-up costs for your cannabis business. Depending on the type of cannabis license you are applying for, the amount of capital needed to cover start-up costs will vary.
Based on previous experience, Retail operations typically require less start-up capital when compared to cannabis cultivation operations. You’ll need capital to cover legal fees, facility buildout, equipment purchases, overhead, security equipment, inventory, and more.
Are you familiar with the amount of capital needed to start a cannabis business? If not, please feel free to contact our team for cannabis consulting services in New Jersey. We can provide you with estimates on the start-up capital needed for your cannabis business tailored for your goals.
Step 6: Identifying a Location (address or municipality)
Besides writing a narrative for the application, you must also identify a location that you intend to operate your cannabis business. Since the final rules are not published yet, we do not know if New Jersey will require to secure real estate or simply identify a municipality for your adult-use cannabis license application. Thus, we do not recommend purchasing property or signing leases until the final rules are published.
However, there are some general tips that we can provide based on our past experience submitted in dozens of cannabis license applications rounds.
When choosing your location, think about the advantages and disadvantages of that particular location. Is the location suitable? Consider the surrounding areas and determine whether a cannabis business is appropriate. Specifically, make sure it is not near a school or church.
Once a location is chosen, you submit a floor plan of the facility with your application. You can either choose an existing building or build construct a building. In either case, you will need zoning approval from the local municipality.
Step 7: Start Garnering Local Support
Additionally, it helps to have proof of local support for the proposed business. Can you identify someone in the governing body that you can get to write a letter of recommendation? Frequently, our clients will engage lobbyists to help in obtaining local support from governing bodies.
Our New Jersey Cannabis Consultants advise that those who want a cannabis license in New Jersey should talk with local governments and listen to their concerns. Some communities do not want cannabis businesses within their town. So, talking to these government officials may persuade them to allow these businesses.
All in all, the acceptance of cannabis in more towns leads to more opportunities for cannabis businesses in New Jersey. You’ll also want to check with organizations in the community at you intend to operate. For instance, getting the approval of the neighbors of your proposed facility can lend strength to your application.
Make sure to utilize our cannabis consulting services in New Jersey to find out how to reach officials in the town of your interest and gain local support.
Step 8: Write your cannabis license application in New Jersey
Finally, you will want to write a competitive cannabis license application. We briefly outlined above the various types of narratives that you will have to write during your cannabis license application.
You will want to describe your plans and procedures for operating a safe and effective cannabis business. For instance, in your security plan, you’ll want to outline the equipment, vendor, and practices you will use to ensure your facility is secure and capable of preventing theft and diversion.
Have you written a cannabis license application before? The narratives require technical expertise and can easily run into the hundreds, or even thousands, in page count. Save time and money by allowing our New Jersey Cannabis Application Writers to write your narratives for you. We will make sure you receive the highest scores on all sections so that you can win a license and start your cannabis business.
Below, our New Jersey Cannabis Consultants outline the various plans and their requirements.
Operating Plan in New Jersey
For those wondering how to start a cannabis business in New Jersey, well, you’re going to want to know how to operate that specific business that you intend to start. Within the Operating Plan, this is where you show your expertise and knowledge of the cannabis industry and the operations of the proposed business type.
For instance, you’re going to want to display your familiarity with New Jersey Cannabis regulations and how you intend to comply with them during your operations. In addition, you must display your expertise in:
- Quality Control and Quality Assurance
- Recall plans
- Compliant packaging and labeling
- Inventory control
- Seed-to-sale tracking
- Analytical Testing of cannabis and products
- water management (cultivation specific)
- odor mitigation
- waste disposal
Moreover, a retailer requires additional expertise in product types, modes of administration, and effects.
Business and Financial Plan in New Jersey
After you’ve put together a cannabis Operating Plan, you’ll want to focus on creating a business and financial plan. The business plan should be short and to the point. Put differently, New Jersey is seeking an executive summary of your business plan.
Of particular importance, is a summary of your background operating in the cannabis industry or other highly regulated industries. The state wants evidence that you are capable of operating a compliant cannabis business.
Perhaps more important for the license application is proof of capital and financing to fund the proposed New Jersey Cannabis Business. You must demonstrate your financial ability to implement the business plan. For instance, proof of funds can be demonstrated through:
- bank statements
- business financial statements
- net worth statements
- debt and equity finance statements
Moreover, if you’ve previously operated a cannabis business, you must describe your experience complying with banking associated with your cannabis business. This can be demonstrated, for example, by providing letters from your bank or credit union describing your compliant banking history.
Safety and Security Plan in New Jersey
First, a Safety and Security Plan is important for states to award you with a license. We recommend collaborating with a licensed security vendor when drafting a plan. More specifically, states will score your narrative higher if you work with a local minority-owned security vendor.
Reach out for cannabis consulting in New Jersey to learn how to write a security plan that will receive a perfect score.
Once you’ve identified a security vendor, your narrative must include a description of your:
- Licensed security personnel,
- Alarm and video surveillance system,
- Access and visitor management
- Facility designs including locations of security cameras and alarms,
- Diversion prevention plan
- Emergency management plan
- Sanitation practices
Besides the security you intend to implement, you must also describe how you plan to screen employees for criminal backgrounds.
Environmental Impact Plan in New Jersey
It’s 2021, and to no surprise, environmental responsibility is an important aspect for the proposed business. Thus, our New Jersey Cannabis Consultants highly recommend you pay particular attention to this section.
Besides your concerns on how to start a cannabis business in New Jersey, you should also be focused on how your business will implement sustainable practices. You must display your plan to mitigate the environmental impact and carbon footprint of your business.
For example, how will you minimize the resource needs of your cannabis business? Also, can you incentivize your employees to help reduce your environmental impact?
Equally as important and often overlooked, discuss your plans to minimize your odor, light, and noise pollution.
Applicant Business Experience Requirements
In addition to the specific narratives identified above, the applicant must include information about:
- First, the applicants experience operating businesses in highly regulated industries
- Secondly, the applicants experience in operating cannabis establishments or medical marijuana establishments and relayed person use or medical cannabis production and dispensation entities. You can also include experience in operating cannabis distributors or delivery services under New Jersey law or any other state laws
- Thirdly, the applicants’ ability to comply with and mitigate the effects of 26 U.S.C. s.280E on cannabis businesses. You also need to include evidence that the applicant is not in arrears with respect to any tax obligation to the State.
Do you have the resources to write these narratives for the various parts of the New Jersey marijuana business license application? Feel free to reach out to our New Jersey Cannabis Consulting firm to learn how our expert cannabis application writers can help you.
Additional Information regarding Cannabis License Consulting In New Jersey
Ownership Limitations on New Jersey Cannabis Business Licenses
First, a person or entity shall be an owner of only one license applicant or license-holder. However, a person or entity may hold ownership interest as a passive investor in more than one cannabis business or testing laboratory license applicant or license-holder.
Additionally, a license applicant or license-holder shall only have, at most, one open and pending cannabis business license application for each class of license at one time. Similarly, a person or entity shall be a principal of only one license applicant or license-holder.
In contrast, an employee or volunteer may work with more than one license applicant or license-holder, at any or all of its cannabis business premises.
If you own or have a financial interest in a microbusiness, you cannot have an ownership or financial interest in any other license type. You are limited to one microbusiness license.
Also, a license-holder holding a testing laboratory license may hold up to three testing laboratory licenses but may not hold any cannabis business licenses.
The ownership limitations for the remaining recreational cannabis licenses in New Jersey are based on the timing of the market, as described below.
Limitations during the 24-month period following February 22, 2021:
For a period of 24 months after the passing of the act, a license-holder and its owners and principals:
- May hold one cannabis retailer license and may not hold any other license concurrent with a cannabis retailer license;
- May concurrently hold one cannabis cultivator and one cannabis manufacturer license;
- May hold one cannabis distributor license and may not hold any other license concurrent with a cannabis distributor license; or
- May hold one cannabis delivery service license and may not hold any other license concurrent with a cannabis delivery service license; and
- An expanded ATC license may concurrently hold a cannabis cultivator, cannabis manufacturer, a cannabis retailer license, and additional cannabis retail licenses for each satellite dispensary.
Limitations after the end of the 24-month period following February 22, 2021:
Following the first 24 month period of the program, a license-holder and its owners and principals:
- May concurrently hold one cannabis cultivator, one cannabis manufacturer, one cannabis retailer, and one cannabis delivery service license; or
- May hold one cannabis distributor license and may not hold any other license concurrent with a cannabis distributor license; and
- an expanded ATC license may concurrently hold a cannabis cultivator license, a cannabis manufacturer license, a cannabis retailer license, and additional cannabis retail licenses for each satellite dispensary.
Yes, the limitations on ownership can be unclear. For this reason, we encourage you to reach out for Cannabis Consulting in New Jersey so that we can answer any questions you may have.
Selling and Buying Licenses (Transferring Ownership)
You are allowed to sell your New Jersey Adult-Use Cannabis Business License. However, there is a fee you must pay and certain time restrictions.
If you transfer more than 50% of the ownership of your license, you must pay a $20,000 fee.
For at least two years after commencing operations, an annual license-holder cannot make any changes to more than 50% of its ownership interest.
Important to note, the majority share of diversely owned business, social equity business, impact zone business, or microbusiness shall remain the same until two years after the commencement of cannabis business operations.
For a microbusiness, you are not allowed to sell or transfer the license (however, you can apply to convert to a standard cannabis business license, which would then allow you to sell).
Reach out today for cannabis consulting in New Jersey.
You need a separate license for each location at which you intend to operate your cannabis establishment. However, a license-holder may apply to change the location of the cannabis business premises.
For a microbusiness, the entire physical plant shall occupy an area of no more than 2,500 square feet.
Definitions related to New Jersey Cannabis Business Licenses
“Economically Disadvantaged Area” means a zip code that meets all of the following socioeconomic criteria:
- Has a median income that is 80% or less of the average median household income in the State ($82,545), as determined annually by the U.S. Census Bureau; and
- Has a health uninsured rate that is at least 150% (i.e. 13.8%) of the health uninsured rate in the State (9.2%), as determined annually by the U.S. Census Bureau.
“Employee” means a person who is not an owner, principal, or vendor-contractor that works for a cannabis business or testing laboratory and who receives remuneration or other tangible benefit from the cannabis business or testing laboratory for services performed for the benefit of the cannabis business or testing laboratory regarding the possession, cultivation, manufacture, transport, delivery, selling, or testing of or other conduct associated with cannabis pursuant to the Act and this chapter.
- “Employee” includes managers, and non-managerial employees.
“Entity” means an organization formed by one or more persons to conduct business, engage in a trade or partake in similar activities.
“Management Services Agreement” means any agreement, contract, arrangement, or other type of formal understanding between an management services contractor and a cannabis business license applicant or license-holder where the management services contractor provides professional staffing, such as, administrative, operational, advisory, and management services to a cannabis business license applicant or license-holder in exchange for remuneration, but not an ownership interest, in accordance with N.J.A.C. 17:30-6.9.
- Any person or entity that holds at least a 5% aggregate ownership interest in a cannabis business or testing laboratory license applicant or license-holder;
- Where an entity, including a parent company, holds at least a 5% ownership interest in a cannabis business or testing laboratory license applicant or license-holder, any person or entity that holds at least 10% aggregate ownership interest in or is a member of the executive team of such entity; or
- A significantly involved person of a cannabis business license applicant or license-holder.
“Premises” includes the following areas of a location licensed pursuant to the Act and this chapter:
- All public and private enclosed areas at the location that are used in the business operated at the location, including but not limited to offices, kitchens, rest rooms, and storerooms;
- Any areas outside a building that the Commission has specifically licensed for the cultivation, manufacturing, wholesaling, distributing, retail sale, or delivery of cannabis items; and
- For a location that the Commission has specifically licensed for the cultivation of cannabis outside a building, the entire lot or parcel that the license-holder owns, leases, or has a right to occupy.
“Principal” means a person or entity, including an office or a board member, that participates in control or decision-making authority over the direction, management, operations, or policies of a cannabis business or testing laboratory license applicant, license-holder, or license applicant’s or license-holder’s cannabis business or testing laboratory.
- A principal of a cannabis business or testing laboratory license applicant or license-holder does not include a manager or a management services contractor.
“Significantly involved person” means a person or entity who holds at least a five percent investment interest in a proposed or licensed cannabis cultivator, cannabis manufacturer, cannabis wholesaler, cannabis distributor, cannabis retailer, or cannabis delivery service, or who is a decision making member of a group that holds at least a 20 percent investment interest in a proposed or licensed cannabis cultivator, cannabis manufacturer, cannabis wholesaler, cannabis distributor, cannabis retailer, or cannabis delivery service, in which no member of that group holds more than a five percent interest in the total group investment interest, and the person or entity makes controlling decisions regarding the proposed or licensed cannabis cultivator, cannabis manufacturer, cannabis wholesaler, cannabis distributor, cannabis retailer, or cannabis delivery service operations.
Additional Resources from our Cannabis License Consultants in New Jersey
Here are some additional resources to help with applying for and winning a New Jersey Adult-use Cannabis License:
- Link to the Act, which outlines the cannabis laws in New Jersey
- Summary of the Act
- Link to the Rules For New Jersey’s Recreational Cannabis Market (N.J.A.C. 17:30)
- Summary of the Recreational Cannabis Market Rules
- The Cannabis Regulatory Commission website (oversees the development, regulation, and enforcement of activities associated adult-use cannabis)
- The cannabis application and license fees in New Jersey
- Link to previous application material from the medical marijuana market licensing rounds in New Jersey
Conclusion | Cannabis Consulting in New Jersey
Finally, although 7 new states (Arizona, Montana, South Dakota, Mississippi, New York, Connecticut, and Virginia) all legalized some sort of marijuana legalization within the last year, New Jersey is the state to look out for. This market is described as untapped and the population in New Jersey is massive. Start preparing now to increase your odds of winning a New Jersey Cannabis License.
If you are still curious about more information on how to sell or grow marijuana in New Jersey, make sure to contact our cannabis consulting team. If you want to know more about cannabis consulting in New Jersey click here.