How to Apply for New Jersey Adult-Use Licenses

Lisa
February 21, 2022

Timeline & Key Elements for Your Application

Now that it is finally time to apply for adult-use business licenses in New Jersey, we will walk back through the timeline and point out key elements to consider when preparing your application.

In short, every plan and submission must be perfect. Consider the award process as a pass/fail basis where completion and accuracy matter.

The sections below cover these topics:

  1. What has happened in New Jersey’s Adult-Use Rollout: The Timeline
  2. What are the Main Points to Know About the Application Process?
  3. What is a Conditional License vs an Annual License?
  4. New Jersey Adult-Use Microbusiness: Pros, Cons & Watchouts
  5. What are the License Type Details?
  6. How to Get Ahead in Winning a New Jersey Adult-Use License
  7. What are the social equity elements required for priority review?
  8. What are "bonus points" for priority review?
  9. What are local approval considerations for adult-use licensing?
  10. What are items of special consideration for licensing in New Jersey?

What Has Happened in New Jersey’s Adult-Use Rollout

Let’s review the key points in the New Jersey adult-use cannabis timeline:

Late 2019: SCR183 Passed

Proposal for a constitutional amendment to legalize cannabis

November 2020: Public Question 1 Vote

The public approved the constitutional amendment that was previously approved by the state legislature. With 67% of “yes” votes, the amendment passed with the largest margin of victory of any statewide cannabis legalization ballot measure in US history.

February 2021: Bill Signed

Governor Murphy, who campaigned heavily on cannabis legalization, signed the adult-use bill into law. 

March 2021: Regulatory Commission in Place

The state appointed a diverse Cannabis Regulatory Commission (CRC) who are tasked with leading the program.

August 2021: Partial Regulations & Municipal Opt-Outs

Partial regulations went into effect on August 19, 2021, and local municipalities had until August 21, 2021, to opt out of the adult-use program. 

November 9, 2021: Application Released

Final Notice of Application Acceptance was released on November 9 for Class 1 Cultivation, Class 2 Manufacturing, and Class 3 Testing Laboratories. The notice specifies that applications will be accepted on a rolling basis with no deadline. 

December 15, 2021: Application Opened for Cultivation & Manufacturing

The window for cultivation and manufacturing opened and remains open for an indefinite period. Local-level license applications are also going on concurrently with state-level applications. For example, Newark’s was due on December 31, 2021. 

March 15, 2021: Applications Open for Retail

The window for retail (dispensary) applications opens. This license type, too, will be accepted and reviewed on a rolling basis with no deadline.

What are the Main Points to Know About the Application Process?

  1. Submission Process - Submit applications directly to the state. Then, the state approves and forwards approved applications to the relevant municipalities.
  2. Local Requirements - Each municipality may have its own process and requirements for adult-use licenses and cannabis business operations
  3. Deadlines - The application window is on a rolling basis, with no specified deadline
  4. Limits - Only one open application is allowed per applicant at a time
  5. Multiple Types - You CAN hold both manufacturing and cultivation licenses
  6. Where To Submit - Applications must be submitted via the state’s online portal
  7. Requirements - The application requirements and award criteria are complex

What is a Conditional License vs an Annual License?

A conditional license has lighter initial requirements but must be converted to an annual license after a specified period of time.

  • Lighter content burden
  • Personal income cannot exceed $200k for an individual or $400k for a couple
  • Financials must do not have to be locked down, but should be well articulated
  • Property does not need to be locked down, but should be narrowed down to a short list of potential properties

At conversion:

  • Property must be secured
  • Must show proof of local support
  • Must have a labor peace agreement in place

Conditional License Timeline:

30 days: CRC has 30 days for application review, though they have already indicated that this window will likely be 60 days because of the volume of applications

120 days: The applicant must convert their conditional license to an annual license within 120 days of awarding the license

365 days: The applicant has a full year to have a final inspection for operation

An annual license application includes heavier requirements:

  • Site/property control
  • Financing plan
  • Lots of written plans, mostly standard operating procedures (SOPs)
  • Detailed cannabis cultivation and manufacturing experience
  • Business experience

Annual License Timeline:

90 days: State has 90 days to review submitted applications

365 days: The applicant has a full year to have a final inspection for operation

New Jersey Adult-Use Microbusiness: Pros, Cons & Watchouts

Microbusiness applications get priority review and can be converted to a full license. 

Ownership Restrictions:

  • Residency requirements: 100% New Jersey, 51% local
  • Cannot also own a non-micro adult-use license

Facility Restrictions:

  • 2,500 square feet or smaller for cultivation and manufacturing
  • 10 employee maximum

What are the License Type Details?

New Jersey Adult-Use Cultivation Licenses

  • 6 Tiers
  • Capped at 37 licenses until February 2023. Once the cap expires, the CRC will continue reviewing new applications and will set rules for these 
  • Application window opened on December 15, 2021, and remains open.
  • Applications are accepted and reviewed on a rolling basis

New Jersey Adult-Use Manufacturing Licenses

  • No cap on the number of manufacturing (processing) licenses
  • Application window opened on December 15, 2021, and remains open.
  • Applications are accepted and reviewed on a rolling basis, with no deadline

New Jersey Adult-Use Laboratory Licenses

  • No cap on the number of laboratory licenses
  • Application window opened on December 15, 2021, and remains open.
  • Applications are accepted and reviewed on a rolling basis, with no deadline
  • Standard personal and entity information burden
  • No disqualifying conditions
  • Evidence of ISO 17025 certification is required 

New Jersey Adult-Use Retail Licenses

  • No state-level caps on retail (dispensary) licenses
  • The CRC will begin accepting applications for Class 5 Retailers on March 15, 2022
  • Applications are accepted and reviewed on a rolling basis, with no deadline

Other Types of New Jersey Adult-Use Business Licenses

Information for wholesale, distributor, safe transporter licenses will be released by the CRC at a later, unspecified date.

How to Get Ahead in Winning a New Jersey Adult-Use License

  • Priority review statuses, which can be “stacked” or combined for higher impact
    • Social equity
    • Diversity
    • Impact zones
    • "Bonus points"
  • Local approval
  • Items of special consideration
    • Communication
    • Disclosure forms
    • Person/entity of interest
    • Background checks

What are the social equity elements required for priority review?

A license applicant or license holder with more than 50% ownership interest held by one or more persons that demonstrate one of the following criteria:

  • Lived in an economically disadvantaged area for 5 of the last 10 years and household income is 80% or less of the state median

OR

  • Eligible to be pronounced rehabilitated

OR

  • Specified indictable offenses

What are the diversity elements required for priority review?

The applicant or License Holder has been certified as:

  • Minority-owned

OR

  • Women-owned

OR

  • Disabled Veteran-owned

Must be certified by the Division of Revenue and Enterprise Services pursuant to the criteria at N.J.A.C. 17:30-6.4

What are "bonus points" for priority review?

They aren’t technically classified as bonus points, but these are other ways to get priority in the review process:

  1. New Jersey resident for at least 5 years
  2. Collective bargaining agreement with a labor organization in New Jersey
  3. Collective bargaining agreement with a labor organization in another state
  4. Project labor agreement with a building trades labor organization for facility construction/retrofit
  5. Project labor agreement with a labor organization for any other applicable project

What are local approval considerations for adult-use licensing?

  • There may not be a cap on the number of manufacturers or retailers at the state level, but there could be at the local level 
  • Make sure your target location accepts cannabis businesses 
  • Get connected to the local government 
  • Secure approval ASAP

What are items of special consideration for licensing in New Jersey?

  • Communication with the CRC - expect to go it alone
  • Person/Entity of Interest
  • Personal and Entity Disclosure Forms
  • Background checks 

The person/entity of interest details are complex and need an extreme level of attention and detail. 

 

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