Opening Up A Marijuana Business in NJ
Posted by Thomas Young on
Legal Marijuana in New Jersey
On November 3, 2020, New Jersey voted to legalize recreational use marijuana for adults over the age of 21. The vote was passed with overwhelming approval with 67% voting Yes. From this point it was up to lawmakers to put into effect a framework to establish laws around the Recreation Marijuana system. In April 2021, the official rules and framework was announced.
Between the date of approval and release, the New Jersey Cannabis Regulatory Commission (NJCRC) had been taking public testimony on proposed rules, with advocates pushing for equity and inclusivity, and industry stakeholders pushing for policies that don’t place undue burdens on businesses as the market matures.
An approximately 160 document was released with sets the foundation for New Jersey’s marijuana market. However, regulators have stressed that it will be built upon with more specific regulations for things like delivery services and wholesalers, and that the initial rules can still be amended over time.
Any individual looking to operate a recitational marijuana business will need to apply for a license.
Recreational License Types
|
Recreational Use Licenses |
Authorized Activity |
|
Class 1 Cannabis Cultivator |
Grow recreational use cannabis |
|
Class 2 Cannabis Manufacturer |
Produce recreational use cannabis |
|
Class 3 Cannabis Wholesaler |
Store, sell or otherwise transfer, recreational use cannabis items between cannabis cultivators, wholesalers, or retailers |
|
Class 4 Cannabis Distributor |
Transport cannabis items in bulk between cannabis cultivators, manufacturers, or retailers within the state of New Jersey |
|
Class 5 Cannabis Retailer |
Purchase recreational use cannabis from licensed cultivators, manufacturers, or wholesalers and sell those items to consumers in a retail store |
|
Class 6 Cannabis Delivery |
Transport a consumer’s purchases of recreational use cannabis and related supplies from the retailer to that consumer |
|
Conditional license |
Begin building out operations for the cultivation, manufacture, dispensing, wholesale, distribution, or delivery of recreational use cannabis while working towards meeting the requirements for a cannabis cultivator, manufacturer, dispensary, wholesaler, distributor, or delivery license |
Fee Schedule
All application and licenses will be subject to fees as outlined below:
| APPLICATION & CERTIFICATION FEES | ||||
| Conditional License Applicant | Annual License Applicant | |||
| Standard Business | Microbusiness | Standard Business | Microbusiness | |
| Application Submission Fee | $200 | $100 | $400 | $200 |
| ApprovalFee | $800 | $400 | $1,600 | $800 |
| Conditional Conversion Submission Fee | $200 | $100 | n/a | n/a |
| Conditional Conversion Approval Fee | $800 | $400 | n/a | n/a |
| Testing Laboratory Application Submission Fee | $400 | |||
| Testing Laboratory Approval Fee | $1,600 | |||
| Expanded ATC Certification Fee | Medical Cannabis Cultivator Expansion – $400,000 Medical Cannabis Manufacturer Expansion – $300,000 Medical Cannabis Dispensary Expansion – $100,000 Vertically Integrated ATC with 1 dispensary – $800,000 Vertically Integrated ATC with 2 dispensaries – $900,000 Vertically Integrated ATC with 3 dispensaries – $1,000,000 |
|||
NOTE: Submission fees are due at the time an application is submitted. Approval fees are due upon Commission approval for licensure to operate. Applicants who are denied approval for licensure are not required to pay approval fees. Expanded ATC Certification Fees are due at the time the ATC submits its required certifications to the Commission.
| LICENSING FEESΔ | ||
| Standard Business | Microbusiness | |
| Cultivator Licensing Fee† | Tier I – $5,000 Tier II – $10,000 Tier III – $20,000 Tier IV – $30,000 Tier V – $40,000 Tier VI – $50,000 |
$1,000 |
| Manufacturer Licensing Fee‡ | Up to 10,000 sq ft – $20,000 More than 10,000 sq ft – $30,000 |
$1,000 |
| Retailer Licensing Fee | $10,000 | $1,000 |
| Testing Laboratory Licensing Fee | $4,000 | |
Δ Licensing Fees are due upon application approval and each year thereafter when submitting a renewal application. The licensing fee for the first year of operation is reduced by the amount paid in application submission and approval fees.
Example: The licensing fee for a Testing Laboratory in the first year would be $2,000 ($4,000, less $400 for application submission fee and $1,600 for application approval fee). In the second year and every year thereafter, the Testing Laboratory would pay $4,000 for the licensing fee.
† Cultivator Licensing Fees apply to all cannabis businesses with a Class 1 Cannabis Cultivator License, including microbusinesses and Expanded ATCs:
Tier I = Mature cannabis plant grow canopy area greater than 2,500 sq ft but no more than 10,000 sq ft
Tier II = Mature cannabis plant grow canopy area greater than 10,000 sq ft but no more than 25,000 sq ft
Tier III = Mature cannabis plant grow canopy area greater than 25,000 sq ft but no more than 50,000 sq ft
Tier IV = Mature cannabis plant grow canopy area greater than 50,000 sq ft but no more than 75,000 sq ft
Tier V = Mature cannabis plant grow canopy area greater than 75,000 sq ft but no more than 100,000 sq ft
Tier VI = Mature cannabis plant grow canopy area greater than 100,000 sq ft but no more than 150,000 sq ft
‡ Refers to the square footage of the entire cannabis business premises, not solely the area in which manufacturing or processing is taking place.
| CHANGE FEES (due at the time the change application is submitted) | ||
| Standard Business | Microbusiness | |
| Location Change* | $10,000 | $1,000 |
| Facility Capacity or Physical PlantChange** | $2,000 | n/a |
| Majority Ownership Change*** | $20,000 | $20,000 |
| Microbusiness Conversion ApplicationSubmission Fee | n/a | $200 |
| Microbusiness Conversion ApprovalFee | n/a | $800 |
* Location Change fees apply any time a cannabis business seeks to move the location any of its licensed premises. If a cannabis business has more than one facility or licensed premises, the license-holder must pay the change fee for each facility or premises that will be relocated.
** Facility Capacity or Physical Plant Change fees apply any time a license-holder seeks to change or modify the cannabis business’ cultivation capacity and move to a different cultivation production management tier. Microbusiness that are converting to a Standard Business do not incur a Facility Capacity or Physical Plant Change fee; after conversion, such businesses will be subject to the licensing fee for a Standard Business of their class.
*** Majority Ownership Change fees apply any time a license-holder seeks to transfer more than 50% of ownership interest in the license-holder to another person or entity.
| OTHER FEES | |
| Cannabis Business Identification Card Issuance Fee (includingreplacement cards) | $25 |
| Background Investigation Fee | Financial Source – $1,000 Management Services Contractor – $1,000 For each owner or principal of a cannabis business or testing laboratory – $250 per person Conditional license applicants, conditional license-holders, andSocial Equity Businesses are exempt from these fees. |
What is A Microbusiness
Per New Jersey’s cannabis licensing laws, a microbusiness is a cannabis business with strong established connections with New Jersey that is subject to certain size and operational limitations. New Jersey has set aside a significant number of microbusiness licenses to operate in the NJ cannabis industry. Microbusiness applicants only need to compete against each other, rather than larger and established multi state operators. This potentially gives entrepreneurial start-up companies a path forward without getting pushed aside by larger established companies once New Jersey begins accepting applications.
To qualify as a microbusiness, the business must meet the following criteria:
- All of the owners of the business must be current New Jersey residents, and must have resided in New Jersey for the past two consecutive years.
- At least 51% of the owners, directors, officers, and employees must be residents of the municipality where the business will be located (or at least an adjoining municipality).
- The business can have no more than 10 employees.
- The business operating space can be no more than 2,500 square feet (and in the case of cultivators, can have a height of no more than 24 feet).
- There are various limitations on the monthly volume of cannabis that the business can be involved in, which vary somewhat depending on the type of license being applied for (in some cases limits of 1,000 cannabis plants per month, or limits of 1,000 pounds of usable cannabis per month or other cannabis products or resin, or other similar restrictions).
- Conversely, no owner, director, officer, or other person with a financial interest and decision-making authority in any other cannabis business (whether that business is a microbusiness or not) is permitted to have any financial interest in a microbusiness.
How To Apply
As of the date of this article NJ is not accepting formal applications. Please visit nj.gov here to stay up to date on when the application period will begin.
*Please note the above information is dated as of August 19,2021 and is subject to change. Please review the nj.gov cannabis website for more information.*