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

In 2019, New Jersey expanded the state’s medical cannabis program. In 2021, cannabis became legal for medical and adult-use recreational use. The state began to issue licenses for recreational marijuana and related cannabis products in 2022.

However, some local jurisdictions may limit the number of license retailers. So, if you’re considering seeking a license, you want to make sure you make the best possible case in your application.

The cannabis industry in the state of New Jersey is highly regulated and requires significant startup costs. For legal advice about opening a recreational cannabis dispensary or other cannabis business, talk to a New Jersey cannabis law attorney.

New Jersey Medical Marijuana Dispensaries

The key thing to know about medical marijuana in New Jersey is that it is not regulated like other prescription drugs. The New Jersey Cannabis Regulatory Commission (CRC) is responsible for licensing businesses in the cannabis industry.

“The fact that someone is a pharmacist doesn’t necessarily give them the right to fill orders for medicinal cannabis,” says Michael F. Schaff, co-chair of the New Jersey State Bar Association’s Cannabis Law Committee and the cannabis law practice group at Wilentz, Goldman & Spitzer. “The bottom line is, without a cannabis license, it’s illegal to sell in New Jersey.”

“It’s a significant application,” says Angelo Cifaldi, a licensed pharmacist and the other co-chair of the cannabis law practice group at Wilentz, Goldman & Spitzer. “They end up being hundreds of pages.”

“Typically we would recommend they have a professional application writer,” Schaff adds. “The applications are carefully reviewed and graded, like a college final exam. There’s a committee who reviews every application, and then gives them points in different ranges based on the answers.”

Marijuana Industry License Types in New Jersey

The first step to obtaining a commercial cannabis license in New Jersey is determining what your business is going to do in the cannabis market.

The CRC regulates the licensing process for medical and recreational cannabis business operations. There are different types of New Jersey cannabis licenses, including:

• Cannabis cultivation license for growing cannabis plants
• Cannabis product manufacturer license
• Cannabis wholesaler license
• Cannabis retailer license for New Jersey dispensaries
• Cannabis delivery service license
• Testing lab license

Some marijuana-related companies may need 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.

Most recreational businesses can only hold one license class. However, some microbusinesses can apply to seek multiple licenses at once.

Preparing a Cannabis License Application

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

Entrepreneurs need local approval and state approval to get a dispensary or distributor license. The state gives priority review for social equity businesses, diversely-owned businesses, and businesses in low-employment impact zones.

“Having the right team in place is crucial in New Jersey,” says Sean Mack, a business attorney at Pashman Stein Walder Hayden in Hackensack who advises New Jersey cannabis businesses. “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.”

Having Experience in the Cannabis Industry

On the experience side, it can be difficult to find New Jersey residents 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 opening in an economically depressed area of New Jersey, and looking to create jobs, that’s checking another box that the state wants.”

There are significant application fees, annual license fees, and zoning restrictions for getting a dispensary license. 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. 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 must provide different information than marijuana retailers. In either case, extensive business planning information will always be required.

Review Your Cannabis License Application and Fee Schedules

Cifaldi and Schaff assist in the application process, and have tips related to five items upon which applications are judged.

• “Make sure you do background checks of everybody involved in the process: owners, participants, et cetera. They don’t want convicted felons. If there are issues that might prohibit a certain owner, you have to thoughtfully explain it. You shouldn’t try to  hide anything.”
• “They want information on the town that you’re going to put this in. What is the zoning? Is it allowed? Many times, they’d like you to submit something from the town’s governing body that supports your application.”
• “They also want to see you have the financial wherewithal to own one of these facilities. Significant information is requested on your financial backing.”
• “What they also promote, because this is the state of New Jersey, is supporting unions, so cooperation letters from the unions will be helpful.”
• “The state also wants diversity on the board that runs the facilities, so it’s helpful to have diverse ownership.”

If the application contains errors or insufficient information, the CRC will deny a marijuana dispensary permit.

“It all starts with your business plan, including financial projections,” Schaff adds. “It also depends on the size of the dispensary. If it’s a large dispensary, you’re going to need in excess of $1 million.”

“You have to find property for whatever you want to do,” Cifaldi says. “But whether it be a dispensary, a cultivation center, or whatever it is, you need to be careful not to enter into a lease that’s long-term before actually getting a permit.”

Do You Need a Cannabis Lawyer?

If you have any questions about obtaining a marijuana license in New Jersey, you should consult an experienced cannabis law attorney. An attorney will be able to review your case, answer your questions, and offer you guidance on how to best proceed.

In terms of timeline, it’s not unusual for a year to pass between submitting the required documents 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, team, financing, and have it ready to go when the next licensing window opens up,” Mack says.

“Some people try to do it on their own, and some have been successful and some have not. The regulatory compliance is highly sophisticated,” Schaff says. “The lawyer doesn’t have to do everything, but I would find it very difficult for a layperson to know how to deal with all of the issues needed in this complex area.”

“Some of the people we represented have put together a substantial portion of the application on their own and asked us to review and comment, which we’re happy to do,” Cifaldi says. “So, we’ll do as little or as much as they want, understanding that there will be times we tell them we need to do something if we think they’re not covering it.”

Find Legal Help for Your Cannabis Startup

If you are preparing for a marijuana business license, a New Jersey cannabis 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,” Mack says.