New Jersey Adult Cannabis Program Licensing Begins | Cozen O’Connor


On August 19, 2021, the New Jersey Cannabis Regulatory Commission approved the first set of rules governing the state’s adult cannabis program. The rules will allow the Cannabis Regulatory Commission to begin licensing cannabis businesses. The rules are effective upon filing with the state Administrative Law Office, until August 19, 2022.

Licenses will be issued for growers, manufacturers, retailers, distributors and delivery services; however, no more than 37 Grower Licenses will be issued in the 24 month period following February 22, 2021, with the exception of Microenterprise Growers, described below. The license application fee will be as low as $ 100. All recreational cannabis businesses will be subject to annual license fees ranging from $ 1,000 for a microenterprise to $ 50,000 for a grower with a grow capacity of up to 150,000 square feet. Businesses must also obtain zoning approval and must comply with all municipal restrictions.

While license applications are usually reviewed as they arise, licenses for any of the following businesses will be reviewed before other applications, regardless of when the application is filed: (1) social equity businesses i.e. businesses owned by people who have lived in economically disadvantaged areas of the state or who have previously been convicted of cannabis-related offenses; (2) businesses belonging to various groups, that is, businesses owned by women, minorities or disabled veterans and certified as such by the New Jersey Department of the Treasury; and (3) impact area businesses, that is, businesses located in an impact area of ​​New Jersey, or employing residents of an impact area. A social equity excise tax can be imposed on the crop that has the potential to increase as consumer prices fall. Fees will be allocated to raise funds for educational support, economic development and social support services in impact areas.

Microenterprises, that is, those with up to 10 employees and premises not exceeding 2,500 square feet, may apply for a conditional license. The conditional licensing program aims to help small entrepreneurs enter the market. Applicants for a conditional license only need to submit general information, a business plan and a regulatory compliance plan to receive a conditional license. Once approved, the applicant has 120 days to find a site, obtain municipal approval and request the conversion of their conditional license to an annual license. The applicant will not have to complete the part of the application that describes their past experience in a regulated cannabis industry. Microenterprises will pay reduced application fees and reduced licensing fees.

Restrictions will be placed on retailers to prevent minors from accessing cannabis. Edible products that resemble food, such as cookies and brownies, are prohibited. Only syrups, pills, tablets, capsules and chewables may be sold by a cannabis retailer. The packaging must be child resistant.

The rules are available here.

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