The Making of a ‘Decentralized MSO’ Moves Forward With Approval to Operate in New Jersey

Grasshopper Farms, a cannabis cultivator and manufacturer with operations in Michigan, New Jersey and Colorado, announced that it has been unanimously approved under a Redevelopment Agreement by the Township Council in Galloway Township, N.J., to operate in the largest municipality in the state (at 114.49 square miles of total area of land and water, according to the Galloway Township’s website), located just over 15 miles from Atlantic City.

“This historic move signifies the first-ever authorization of a cannabis business license in Galloway Township since New Jersey's landmark decision to permit recreational cannabis establishments within the state,” according to a Grasshopper Farms press release. “The approval of the agreement follows a series of deliberate considerations and meticulous evaluations by the seven-member, all-Republican Township Council. Several key milestones were achieved during this process, including the resolution of critical concerns and the definition of essential parameters for the cultivation of cannabis within the township.”

© Photo courtesy Grasshopper Farms

"We are honored to be entrusted with this unique opportunity as the inaugural recipient of Galloway Township's cannabis license," stated Grasshopper Farms’ founder and CEO Will Bowden in the release. "Grasshopper Farms is committed to upholding the highest standards of operation and ensuring harmonious coexistence with our local residents. We look forward to fostering a positive relationship with the community and contributing to the growth and prosperity of Galloway Township."

Grasshopper Farms, which was awarded a standard annual cultivation license Aug. 18, will establish its indoor cannabis growing operation on a property owned by long-time Galloway Township residents Duane K. and Pamela Demaree.

When asked what the approval means to Grasshopper Farms’ overall business strategy and growth, Bowden told Cannabis Business Times (CBT), “We are excited to offer more local jobs to local residents, now in New Jersey. We are developing what I am calling a decentralized MSO, meaning each facility will maintain accountability for local decisions and operations. We'd love to be able to offer career opportunities in 10 states, and it looks like Minnesota and Massachusetts are strong candidates to join on next. That being said, this is an industry that beckons patience and flexibility, and we are focused on making the right decisions, not the first decisions.”

Part of Bowden’s strategy is to locate in states with favorable regulations and business climates for cultivation businesses to operate, and the Garden State fit the bill, Bowden told CBT: “The New Jersey regulations seemed to land in a place that I would describe as being conducive to business. The application process is pretty straightforward and balanced with fair taxation. I know many are usually frustrated with the initial application and licensure of a new state, but that happens in every state. This is change, and the regulators are doing their best as they launch their programs.

“Also, my wife grew up in New Jersey and we still have a lot of family throughout the state,” Bowden added.

While Grasshopper Farms’ “started as a dream: to grow quality cannabis in the sun, sustainably and locally,” per the company’s website, and operates a 160-plus-acre outdoor farm in Michigan and a 48-plus-acre outdoor farm in Colorado, the company plans to focus on indoor cultivation to start in New Jersey. The township currently only allows for indoor cultivation, according to Bowden.

“We are excited to help them start their journey of their cannabis program," he said. "We will not focus on anything else until the mayor, Township Council, township management, and (most importantly) township residents have an opportunity to see who we are, what we do, and how we do it. I am confident we will exceed their expectations."

© Photo courtesy Grasshopper Farms

The company is also not clear on “how or where” it will leverage its manufacturing license, according to Bowden. “For now, we are focused on the indoor cultivation opportunity,” he said.

As for the indoor cultivation operation, Grasshopper Farms has an ambitious timeline. “We are working with the township to be operational as soon as possible, without rushing any part of the process. I would expect we can work together to be operational in the next 90 days.”

The feasibility for what many would consider a fast track to being operational, Bowden explains, is that “we were fortunate enough to find a property that is already a working farm and has many non-cannabis production spaces already in operation. In this case, some of the initial operations will take place in what was historically in support of growing and harvesting potatoes.”

Grasshopper Farms offers tours year-round at its Michigan farm to show interested members of the community what they do, and education will be part of the New Jersey business as well. “This is an enormous honor. Our No. 1 priority in this industry is education—education of what this is, and, even more importantly, education of what this is not,” Bowden said. “Mayor Anthony Cappola and the township council are doing an excellent job in proceeding with a healthy balance of diligence and support. We will make them proud.”

New Jersey currently has 68 adult-use and/or medical dispensaries in operation, according to the New Jersey Office of Information and Technology, and 80 annual cultivation licenses have been issued, according to the New Jersey Cannabis Regulatory Commission (CRC). 

Most recently, on Oct. 19, the CRC awarded 15 annual cultivation licenses, including 4 micro licenses and 11 standard licenses.

A number of conditional licenses have also been awarded, according to the CRC; “Conditional licenses are temporary and do not give businesses allowance to operate. Awardees must fulfill all incomplete licensing requirements and apply for conversion to an annual license before they can be permitted and allowed to operate,” per the CRC.

State municipalities had until Aug. 21, 2021, to decide whether to allow or ban adult-use cannabis businesses in their towns, under the Cannabis Regulatory Enforcement Assistance, and Marketplace Modernization Act (CREAMM Act); however municipalities that opted-out have the option of opting in at any time.

As of April 2022, about 400 municipalities had opted out of allowing cannabis businesses to open, according to New Jersey Monitor. There are 564 municipalities in the state, so more than 70% of the state’s cities, towns, boroughs, townships and villages opted out.