Author: Emerge attorney Brittany Tovar
Three new cannabis license classes—wholesaler, distributor, and delivery—are opening for applications later this month in New Jersey. In 2021, the CREAMM Act established the New Jersey Cannabis Regulatory Commission (“CRC”) and created six (6) classes of adult-use licenses.
The CRC has, to date, only accepted applications for Class 1 Cultivator, Class 2 Manufacturer, and Class 5 Retailer licenses, but on September 27, 2023, at 9 a.m., new applicants, or existing operators looking to further integrate their cannabis business vertically, will be able to apply for licenses to operate Class 3 Wholesaler, Class 4 Distributor, or Class 6 Delivery businesses. Note, however, that a license holder may simultaneously hold either (a) a Cultivator, Manufacturer, Retail, and Delivery license or (b) a Wholesaler and Distributor license, but it may not fully vertically integrate and hold interests in licenses from both (a) and (b). As with the licenses that exist now, the three new license classes will not be subject to any statewide cap, but municipalities are free to opt out of any class operating in its jurisdiction as well as cap the number that may operate in any class in its jurisdiction.
Application Process
License applications will be accepted and reviewed on a rolling basis until indicated otherwise, but for the first three (3) months of the application window, the CRC will only accept Social Equity Business applications. After that initial three-month period expires, applications will be open for both Social Equity Businesses and Diversely Owned Businesses for the following three (3) months. Thereafter, applications will be open for all, and the CRC will continue to prioritize applications from Social Equity Businesses, Diversely-Owned Businesses, Impact Zone Businesses, and applications that receive bonus points for various features, in that order.
When the CRC is flooded with new applications, it can take from five to seven months just to receive a conditional approval unless you are one of the top prioritized applicants. Annual applications can sometimes take up to a year to be approved, as conditional applications are prioritized over annual applications.
How to Apply
Applications for adult-use cannabis business licenses can be submitted online through the CRC website. The application and approval fees can range from $100 to $2,000 depending on the license type.
Check the CRC’s Notice of Application Acceptance for the list of application requirements (linked here). Before diving headfirst into a state application, however, consider locking up property and local approval—or at least getting a strong lead on those crucial items—because a state conditional license is no good without property and local approval.
Conclusion
The upcoming application process for recreational cannabis business licenses in New Jersey is an exciting opportunity for entrepreneurs and businesses, especially applicants who qualify as Social Equity Applicants and enjoy a 3-month head start. The industry is expected to continue to grow rapidly in the coming years, as there remains an undersupply of both flower and other products, as well as adult-use dispensary sites in the most densely populated state in the nation. If you are interested in getting involved in the cannabis industry, now is the time to start planning your application, but you need to be smart about it. The tough early market here in the Garden State has already burned out many a license applicant – don’t let your cannabis startup go up in smoke.
