What You Need to Apply for a Cannabis License in New Jersey

What you need to comply with the laws and regulations

In June 2019, New Jersey Gov. Phil Murphy signed a bill that dramatically reformed the state’s medical marijuana program. Under the Jake Honig Compassionate Use Medical Cannabis Act, many more people in the state of New Jersey are now able to get access to medical marijuana and related cannabis products. An important consequence of the updated marijuana laws is that new opportunities have opened up in the industry.

That said, New Jersey is limiting the number of licenses it gives out, says Sean Mack, an attorney who advises businesses in the cannabis space. So if you’re considering seeking a license, you want to make sure you make the best possible case in your application.

Preparing an Application

In applying for a license for a business, New Jersey will conduct a personal background check on any person(s) named on the application. Under New Jersey law, certain criminal convictions will bar an applicant from obtaining approval.

“Having the right team in place is crucial in New Jersey,” says Mack, who works at Pashman Stein Walder Hayden in Hackensack. “New Jersey has made clear that a couple of things are important to them: having people on your team with experience operating in this space, whether it’s cultivation, processing, or retail; having people with real New Jersey roots; having a diverse team, and not just white men—including women, minorities, veterans. These things will help you score points on your application.”

On the experience side, Mack notes, it can be difficult to find natives with cannabis experience unless they came from another state facility. But there are yet other ways to make your case, such as fostering economic development and social justice.

“The state wants to extend opportunities to those who have been negatively impacted by the war on drugs to participate,” Mack continues. “If you’re looking to open up in an economically depressed area of New Jersey, and looking to create jobs there, that’s checking another box that the state wants.”

You’ll need to express that you have access to sufficient funding and, ideally, real estate.

“They don’t want companies to meet immediate roadblocks, so finding real estate in an area that is hostile to cannabis is not going to help your application,” Mack says. “You want to get support from local leaders, preliminary site plan approval; the more you can show the regulators the area is receptive to your facility, the better.”

Additionally, New Jersey regulators require comprehensive business information from the applicant. What you need to provide will depend on what type of license you are seeking. For example, marijuana manufacturers are required to provide different information than marijuana retailers. In either case, extensive business planning information will always be required.

Five Types of Marijuana Industry Licenses in New Jersey

The first step to obtaining a commercial cannabis/hemp license in New Jersey is determining what exactly your business is going to do. Indeed, there are actually five different types of marijuana-related licenses available in the state. As described by the New Jersey Department of Health’s Division of Medical Marijuana, you may need to apply for any of the following:

  1. Producers of marijuana are required to obtain a Cannabis Cultivation Facility license for the specific location at which they are producing the product; 
  2. Processors of marijuana are required to get a Cannabis Product Manufacturing Facility license for the specific location where they are processing the product;
  3. For companies that are warehousing marijuana-related products, a Cannabis Wholesaler licensed in required;
  4. Companies selling medical marijuana to members of the public must have a Cannabis Retailer license for their specific retail location; and
  5. New Jersey companies involved in moving these products must have a legally viable Cannabis Transporter license. 

To be clear, some marijuana-related companies may be required to hold multiple licenses at the same time. It is imperative that business owners and managers obtain all necessary licenses to operate under New Jersey law. Notably, New Jersey allows companies to apply for something called a Vertically Integrated Permit—essentially, this type of application allows companies to seek multiple licenses at once in a far more efficient manner.

If you are preparing to apply for a marijuana business license, a New Jersey business lawyer with experience handling these issues can help to protect your rights, interests, and investment. “A lot of attorneys serve as quarterbacks in the process—making sure you have the right things in place and checking all the boxes, as well as connecting you with other resources,” Mack says.

In terms of timeline, it’s not unusual for a year to pass between submitting an application and opening your doors. “So anybody who’s seriously interested in applying should be working now to put their ducks in a row—find their real estate, find their team, find their financing, and have it ready to go when the next licensing window opens up,” Mack says.

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