First Set of Adult-Use Cannabis Rules Approved in New Jersey

First Set of Adult-Use Cannabis Rules Approved in New Jersey

The CRC can now issue licenses for cannabis retailers, manufacturers, distributors, wholesalers, cultivators and delivery services.

September 1, 2021

The New Jersey Cannabis Regulatory Commission (CRC) approved the first set of rules and regulations for the state's adult-use cannabis industry on Aug. 19.

At this time, it remains unclear when adult-use sales will begin in the state; however, the approved regulations lay out the requirements for those looking to apply for a New Jersey cannabis license.

The CRC will issue licenses for cannabis retailers, manufacturers, distributors, wholesalers, cultivators and delivery services, according to the rules. During two years after Feb. 22, 2021, the CRC will not approve more than 37 cultivation licenses—excluding microbusinesses and expanded alternative treatment centers (ATCs)—however, the CRC may accept and review additional licenses during that time, as long as the issued license number does not exceed 37.

After 24 months, the CRC will review current cultivation license holders, accept new applications, and issue new licenses to meet market demands, according to the rules.

Priority applicants include diversely owned businesses, social equity businesses and impact zone businesses. 

Applicants with 50% or more ownership from someone who was previously convicted of a cannabis offense, has lived in a economically disadvantaged area for five years or makes 80% or less of the average median household income are considered part of the social equity business category.

Businesses that are majority-owned by a woman, disabled veteran or minority qualify as a diversely owned business, and a company that is majority-owned by a person who has lived in an area with high unemployment and crime rate for three or more years qualifies as an impact zone business, the rules state.

Additionally, the rules state that conditional license applicants have priority over annual license applicants, and microbusinesses take precedence over standard cannabis businesses.

A business smaller than 2,500 square feet or that employs 10 individuals or less is considered a microbusiness. The conditional licenses are designed to help small companies and entrepreneurs enter the competitive market, the rules state.

Licensing and application fees range for each license type. Existing medical cannabis dispensaries looking to transition to adult use must pay a one-time fee ranging between $800,000 and $1 million.

The CRC will begin accepting applications as soon as a date is announced, and the organization is expected to take applications up to 90 days before the licensing lottery.

"All the commissioners have worked diligently since the CRC was launched in April to bring these rules to fruition," said Commission Chair Dianna Houenou in a press release. "We know that there is a lot of interest in getting this market up and running, and we were duty-bound to do it right. We are honored to be able to lay the foundation for an economically sound, socially equitable, and safe market."

"The rules will help create a market that is competitive, diverse, and that puts our core values of equity and safety first," Jeff Brown, CRC executive director, added. "They will ensure that entrepreneurs have access to the market, especially those who have been negatively impacted by cannabis prohibition; and ensure that consumers and stakeholders can have confidence in safe, well-regulated legal sales."