New Jersey Cannabis Business Licenses
NEW JERSEY MARKET STATUS
Adult-use cannabis was approved by New Jersey voters on November 3, 2020. The initiative allows for six license types: cultivation; processing; wholesale; distribution; retail; and delivery. There will also be micro-licenses available for each license type to provide opportunities for smaller companies. As of February 25, 2021 Governor Murphy completed the selection process of the Cannabis Regulatory Commission, which signifies the beginning of the regulatory process. The five-person commission is tasked with creating a full regulatory and application process by August 2021. Priority will be given to those applicants who meet Social Equity qualifications, and to facilities who are located in impact zones as defined in the A21 bill.
New Jersey’s current medical marijuana program only consists of 13 dispensaries owned by seven companies with a collective 104,243 patients. The state expects there will be a need for an additional 90 more dispensaries by 2022, as stated in the Department of Health Division of Medical Marijuana Biennial Report published March 1, 2019.
After almost two years of court delays, the New Jersey Health Department may resume reviewing the nearly 190 submitted applications for the 2019 medical licensing application period. The court only sided with one applicant, ZY Labs, stating that despite technical glitches, the Department made deadlines clear, and even provided a webinar with instructions. The Department of Health is planning on awarding eight Alternative Treatment Centers in the northern region of the state; eight in the central region; seven in the southern region; and one “at-large” to be determined during the award process. Ideally, the Department would like to award up to five cultivation licenses, 15 dispensary licenses, and four vertically integrated licenses. The new facilities will be joyfully welcomed by New Jerseyans who are registered patients with the medical cannabis program as there has been a low supply, and high pricing issues since the program began operations.
The cannabis market growth in New Jersey has surely been affected by the legal battles delaying at least 24 licenses in court challenges. However, the medical cannabis market still reached between $95 - $120 million in sales in 2019, a significant increase over $30 million in 2018.
NEW JERSEY CANNABIS LAWS
On his final day in office (January 18, 2010), Governor Corzine signed multiple bills into law, including the Compassionate Use Medical Marijuana Act, which legalizes the use of medical cannabis for patients with qualified conditions. The law allows patients to purchase and possess cannabis from licensed facilities, but does not allow home growing. The New Jersey Health Department was tasked with creating the laws and regulations for Title 8 Chapter 64. Medical Marijuana,
In June 2019, Jake's Law was signed into law by Governor Murphy bringing greater reforms to New Jersey’s medical cannabis industry. The list of qualifying conditions was expanded to include chronic pain, and additional anti-discrimination protections to ensure patients are not subject to conflicts related to education, rental housing, professional licensing, or employment. The bill was named after seven-year-old Jake Honig who was given medical cannabis by his parents to ease the pain of brain cancer.
On December 16, 2019 Governor Murphy signed into law a “clean slate bill,” which provides residents expungement of previous cannabis convictions.
As of November 3, 2020 recreational cannabis has been approved, and the legislation that will outline the full laws and regulations is currently being crafted by the Cannabis Commission. Under the passed ballot initiative there will be six license types, a maximum total of 8.625% tax (6.625% state and 2% local), and home cultivation of any amount of cannabis plants will be prohibited.
On February 22, 2021 Governor Murphy signed three bills into law (A.21, S.2535, and A.5342) which collectively launched an adult-use cannabis industry, and put an end to thousands of arrests. Passing of these bills put an end to a three-year campaign to regulate, and tax cannabis in the Garden State.
NEW JERSEY CANNABIS LICENSING TIMELINE & CANNABIS APPLICATION
Medical cannabis applications are not being accepted at this time, and an adult-use cannabis application timeline has not yet been disclosed. State leaders have implied that when applications are available there will be a focus on Social Equity applicants.
On March 22, 2021 the New Jersey’s Superior Court Appellate Division lifted its “stay” on scoring 18 month old medical marijuana applications. Paving the way for five cultivation, 15 dispensary, and four vertically integrated license awards. The recipients of the 24 pending medical licenses were not announced during the April 12, 2021 commission meeting.
The Cannabis Regulatory Commission met for the first time on April 12, 2021. This commission will determine how the medical and adult-use cannabis industry will be scaled, implemented, and executed. This includes awarding licenses; determining the size of the market; and designating a start date for legal cannabis sales. The next commission meeting is scheduled for April 22, 2021.
In order to comply with the deadline presented in Assembly Bill No. 21, the Cannabis Regulatory Commission must release adult-use cannabis regulations by August 2021. An application process is expected to follow closely thereafter. Point7 will provide an update if and when applications are being accepted.
CANNABIS HISTORY IN NEW JERSEY
On January 18, 2010 medical cannabis was legalized in New Jersey when Governor Corzine signed into law S. 119, commonly referred to as the Compassionate Use Medical Marijuana Act. The City of Montclair was the first in the state to have an operating dispensary, which opened in December 2012. In 2013 medical cannabis became available for children who were suffering with certain medical conditions and had parental consent, as a result of the parents of a two-year-old with Dravet Syndrome approaching and convincing Governor Christie to sign the new bill into law. The move came with negative feedback, and was dubbed the “pot for tots” controversy. Due to the limited list of qualifying conditions, New Jersey's medical cannabis market has grown at a slower rate than other states. In 2015 three years after the first dispensaries opened, only 5,540 residents had registered as medical cannabis patients with the number only rising to 40,000 by 2019. Another impediment to market growth has been a pricing surge. A two ounce cannabis purchase per month equates to an estimated $12,000 per year, which is an incredibly steep price for medicine.
In 2018 Governor Murphy promised to legalize recreational cannabis within his first 100 days in office. However, his effort was halted when he and Senator Sweeney were unable to convince a majority of senators to support the legislation. Fortunately, voters took matters into their own hands, and voted to legalize recreational cannabis in the 2020 election.
GROWING HEMP IN NEW JERSEY
New Jersey is among the first three states to have a Hemp Program approved by the United States Department of Agriculture. With the New Jersey’s Hemp Program approved, the New Jersey Department of Agriculture is accepting hemp business licensing applications for review and approval.
PREPARING FOR THE NEW JERSEY CANNABIS MARKET
New Jersey's application round will surely be competitive. With a cap of 37 cultivation licenses and limitations implemented by municipalities, strategic planning will be critical to an applicant’s success. It is never too early to begin developing a cannabis business plan and strategy. Contact Point7 today to discuss our products and service packages, which can make the application process and post licensure operations seamless.