New Jersey Medical Marijuana Program Insights
New Jersey releases applications to expand the state’s medical marijuana program
New Jersey’s medicinal marijuana program was passed into law in 2009, but is only recently beginning to pick up speed. The program currently has six operational businesses capable of cultivating, processing, and dispensing medicinal marijuana. The Department of Health just issued a Request for Applications (“RFA”) for up to six additional treatment centers in order to immediately expand the program.
The application submission period is set for August 1-31st, 2018, and new licensees will exist under the same rules as those currently in operation.
Chosen applicants are set to be announced on November 1, 2018.
What You Need to Know
With a quick turn around to submit applications, entrepreneurs must already be in the planning stages to raise capital, secure property, win local approval, and recruit potential team members.
Three tips for licensing in New Jersey:
1) Be over-capitalized:
The capital requirements simply to apply for a license and permit is $20,000, and if chosen, the same amount is due for renewal each year. However, the need for capital extends far beyond application and permit fees. Applicants need to show they have enough access to capital before they even submit for a license, and they need this capital to secure real estate and to show they can cover start-up operations for a year, or more.
2) Source specific talent:
Expertise on your team is extremely important, but every role doesn’t necessarily have to have prior cannabis experience. Look for people with exceptional skills from other industries that are transferrable to cannabis, and actual degreed persons in order to add depth and innovation to your business.
3) Partner with operators in other states for guidance:
Getting insight from those who have been in the trenches of running a medical cannabis operation will give you valuable information on what to avoid and the best way to start up and optimize your operation. Keep in mind that all states have differing regulations due to federal prohibition, so talking with experts who know the New Jersey market is also a good idea to stay ahead of the competition.
Governor Phil Murphy is a great supporter of the program and has already expanded the qualifying conditions via executive order earlier this year. As a result, common conditions such as migraines, anxiety, and expanded cases of chronic pain are now qualifying conditions in the state.
There are significant changes to the existing medicinal program that are likely to come to pass in the near future. Perhaps the most significant of the proposed changes is the removal of the requirement for vertically integrated licenses and instead allowing treatment centers to seek cultivation, processing, and dispensing “endorsements”, and allowing such treatment centers to engage in business with each other.
The NJ DoH is planning to amend the rules to create an “endorsement” system where applicants may apply for a non-vertical facility:
1. Cultivation and harvesting
2. Manufacturing and processing
3. Dispensing
The Department also states on their website’s release page for the RFA that, “[g]iven the unprecedented expansion of the program, the Department anticipates the issuance of additional RFAs in the near future,” and the RFA itself mentions additional RFAs taking place in the fall of this year and in the winter of 2019.
Three bills have been proposed in the legislature to expand the medical program and legalize adult-use. All are pending in committee, but adult use will most likely remain in draft form for the foreseeable future.