This past November, New Jersey residents voted to legalize the recreational use of cannabis for individuals over the age of 21. Anytime a state first legalizes cannabis, it triggers a complex process that must be completed before operations can open for business. This process is already underway in New Jersey, as they have been acting fast to get their legal cannabis industry up and running.
The following information will provide an overview of important points you need to know if you’re interested in entering New Jersey’s fledgling cannabis industry.
When Will Use of Recreational Cannabis Officially Be Legal?
While voters legalized adult use of recreational cannabis on election day, New Jersey lawmakers must pass a bill regulating the use of cannabis before it will officially become legal. While Senator Nicholas Scutari has expressed a hope that the bill will pass quickly, there is no exact timeline for when it will go into effect.
Senator Scutari and Senator Stephen Sweeney introduced Bill S-21 – “New Jersey Cannabis Regulatory, Enforcement Assistance, and Marketplace Modernization Act” shortly after election day. Once it is ratified, the bill will make the personal use of cannabis legal for adults over the age of 21. It will also establish the Cannabis Regulatory Commission to oversee the cannabis industry in New Jersey.
What Is the Cannabis Regulatory Commission (CRC)?
The CRC will consist of five individuals appointed by the state to supervise the development, regulation and enforcement of cannabis sales and consumption throughout New Jersey. The CRC will also be responsible for implementing the legislation passed as part of Bill S-21.
Currently, two of the five members have been appointed. Dianna Houenou has been selected as the CRC Chair, and Krista Nash has been named a member of the CRC. In addition, Jeff Brown, New Jersey’s Assistant Commissioner of the Department of Health, has been mentioned as a leading candidate to be the first CRC Executive Director. This is a logical choice, as he currently oversees New Jersey’s medical marijuana program.
The CRC’s regulatory powers are still being formulated. At the moment, we know the CRC will have the authority to:
- Adopt, amend or repeal regulations controlling the cannabis marketplace
- Grant, refuse, suspend, revoke, cancel or limit licenses and conditional licenses associated with the cannabis industry
Cannabis Licensure in New Jersey
New Jersey has currently established six classes of cannabis licenses:
- Class 1 Cannabis Grower License – allows you to grow, cultivate or produce cannabis in the state
- Class 2 Cannabis Processor License – allows you to manufacture, prepare and package cannabis
- Class 3 Cannabis Wholesale License – allows you to store and sell cannabis strictly for the purposes of resale
- Class 4 Cannabis Distributor License – allows you to engage in intrastate transportation of cannabis in bulk
- Class 5 Cannabis Retailer License – allows you to sell cannabis directly to consumers
- Class 6 Cannabis Delivery License – allows for the delivery of cannabis from a licensed retailer to the general public
In addition, the CRC will have the ability to create new license categories as they deem necessary.
Focus on Promoting Small Businesses
The current version of Bill S-21 reserves 25% of all licenses in each class for microbusinesses. The purpose of this addition to the bill is to prevent large interstate franchises from dominating the New Jersey cannabis marketplace.
To be classified as a microbusiness, you must meet the following requirements:
- You can only have a maximum of ten employees
- You can process a maximum of 1,000 cannabis plats each month
- Your cannabis establishment cannot exceed 2,500 square feet
- You cannot acquire more than 1,000 pounds of cannabis in dried form for retail, resale or processing each month
The current bill also places some restrictions on the ability to hold two classes of licenses at the same time. Once retail sales launch in the state, there will be an 18-month limitation on the number and classes of licenses that any one individual may hold. In particular, a licensed grower, processor, wholesaler, distributor or delivery service cannot also obtain a retail license, and vice versa. In addition, growers and processors will only be allowed to hold two concurrent licenses at first.
Applying for a Cannabis License
License applications won’t be processed until all members of the CRC have been appointed and all CRC regulations have been established. This will most likely happen during 2021.
You must submit your license application to the CRC. You must also apply for separate licenses for each location where you intend to operate. You can file a renewal application up to 90 days prior to the expiration of your initial annual license.
The first steps you should take in preparing for obtaining a cannabis license include:
- Create an application team to handle the process
- Make sure your corporate formation documents are filed with the proper entity
- Think about the location of your new cannabis business
You’ll need to provide the CRC with proof of local support for the location of your proposed cannabis business. In addition, the CRC plans to prioritize applications based on impact zones. An area will be considered an impact zone if it contains a population of at least 120,000 people and ranks in the top 40% of New Jersey municipalities for cannabis-related arrests.
American Cannabis Company Can Help You Establish Your New Business
The process of establishing a new cannabis business in New Jersey is highly complex and will be fraught with a variety of legal hurdles. It’s crucial that you work with an experienced cannabis consulting partner who can ensure you navigate these complexities properly. American Cannabis Company can help.
We have years of professional experience in the cannabis industry, and we’ve worked with a wide range of entrepreneurs throughout the country as they establish businesses in states that have recently legalized cannabis. Our team understands the process involved in navigating these legal hurdles, and we can set you up for success in your new business venture.
We’re the only cannabis pre-license specialists in the country with a License Right™ approach for obtaining a license and starting a new cannabis business. As part of this approach, you’ll receive:
- Recommendations that adhere to New Jersey guidelines and regulations
- An understanding of the opportunities available that meet your specific goals
- Cohesive and comprehensive business planning
- Our exclusive Green Profits Operations Roadmap™
- Our Aligned Success Guarantee™
At American Cannabis Company, we believe in using a flexible approach that focuses on your specific needs and business goals. We’ll work with you to create a comprehensive solution that establishes a framework for every aspect of your operation. When you join our community, you’ll reap the benefits that come when you’re surrounded by others who share your passion for cannabis. Our expertise can set your business up for success and allow you to thrive in the burgeoning New Jersey cannabis landscape.
If you’re planning on opening a cannabis business in New Jersey, it’s important to start planning now. By working with you in the early stages of this planning process, we can ensure your operations are set up properly every step of the way.
Please contact us today to schedule a consultation. We provide cannabis consulting services nationwide.