The NJ Economic Development Authority (NJ-EDA) recently awarded New Jersey cannabis grants to 48 cannabis companies. A few grants went to companies based elsewhere with out-of-state owners.
Doing business in the state made companies eligible versus businesses with owners and headquarters only in New Jersey.
Eligibility Issues
Every cannabis company operating in New Jersey has to have a state-based partner with a minimum of five percent of the ownership stock. But it’s not really Jersey-owned unless the ownership is 51 percent is Garden State-based.
There is a range of cannabis companies in the cannabis industry. On the one side are the Goldilocks as the ideal businesspeople to support. They are New Jersey residents who are small businesspeople who were impacted by the War on Drugs, many of whom are minorities. It is also important for many New Jersey cannabis advocates to have women well-represented in the cannabis industry. Disabled veterans were also prioritized in New Jersey.
On the other side are companies that are Multi-State Operators (MSOs) that sell mediocre products. They often have medical cannabis prioritization, labor, and health problems. These companies are usually owned by wealthy White men who were not convicted of marijuana-related crimes. They often endorse high barriers to entry into the cannabis market. These corporations often hate home grow which remains a felony in New Jersey.
Cannabis Market Issues
Access to capital is a pressing issue for many New Jersey conditional cannabis license holders who will likely be shut out of the market without state aid.
The NJ-EDA issued the grants, not the NJ Cannabis Regulatory Commission (NJ-CRC), which they worked with.
On the reported list of New Jersey cannabis grant winners, three companies were not listed by name. It only says, “a cultivation site located in Ocean County,” a “Dispensary located in Hudson County,” and a “Dispensary located in Ocean County.”
The NJ-EDA Joint Venture Grant Qualifications
NJ-EDA Chief Community Development Officer Tai Cooper noted that the New Jersey cannabis grant winners had conditional or annual approval from the NJ-CRC. Joint Venture round winners also needed site control and municipal approval to qualify. She noted they needed a physical store in New Jersey as well.
The NJ-EDA also ensured that the NJ cannabis grant applicant winners were in good standing with the New Jersey Departments of Treasury and Labor and Workforce Development.
“There is a vetting process in place to ensure that the businesses are in good standing with New Jersey agencies and their brick and mortar are located in the state,” Cooper noted.
She explained that 50 percent of the New Jersey cannabis grant-winning companies were minority-owned, 41 percent were women-owned, and 25 percent were both.
Statistics
“Those statistics for us were really important,” Cooper declared.
“We were very clear about following the letter of the law,” she added.
New Jersey had some leftover federal COVID recovery funds they used. So, only companies formed after the beginning of COVID-19 in March 2020 were eligible.
Cooper explained the New Jersey cannabis grant process was two years in the making since they met with many people to develop it.
“None of this work is done in a vacuum,” she noted. “We got to hear the pain points directly from businesses located in the State of New Jersey that needed assistance.”
She cited James Jackson of Yerr Cannabis, who spoke during the EDA’s ceremony, as a Goldilocks they wanted to support.
Vetting Qualifications and Supporting Companies
Cooper noted that after listening to the New Jersey cannabis industry and community, they did not want to give grants to the U.S. Small Business Association’s (SBA) definition of “small” as capped at 500 employees.
“That’s way too big for craft cannabis businesses,” she declared.
Instead, they imposed a cap of 50 employees maximum on those eligible.
“We looked at each location to make sure the businesses were located in New Jersey,” she insisted.
“It is a personal thing to understand the nuances and complications of this industry, which is new. I’ve had people directly in my family impacted by the War on Drugs. So, I understand why creating programs like this matters,” Cooper explained.
She explained they had hosted several webinars for potential applicants.
Cooper said they did do intensive research to vet companies. She explained companies not based in New Jersey asked if they were eligible.
“No. Your brick-and-mortar business has to be located in New Jersey,” Cooper said.
More Money for NJ Cannabis Companies Soon
“This is one step out of many others to ensure there’s many others,” she said about the program.
Cooper noted it is indeed an experimental pilot program to address potential flaws for the future.
“I’m proud of the numbers. These are numbers you are not seeing anywhere else,” she declared.
“We know it’s a drop in the buck for the considerable need that is out there. But at least it is a drop that is beginning the conversation to provide more access to capital for businesses that are located in New Jersey,” Cooper acknowledged.
She emphasized their Seed Equity New Jersey cannabis grants for $150,000 are coming out very soon. They will be exclusively for Social Equity applicants, so the eligibility requirements should be much more stringent.
“We could have done much smaller grants,” Cooper noted. “But the cry from people that literally been toiling in the fields without resources was ‘we need more funding. Access to capital is incredibly hard for us to get.”
Even with many issues, New Jersey is still making great strides versus other pro-cannabis states in building an equitable cannabis market. New York sought to make a big splash and invest in cannabis companies. But they privatized it and gave control to businesspeople who didn’t know what they were doing.
Illicit Gardens of MO Wins New Jersey Cannabis Grant
Illicit Gardens is a former underground legacy operator based in Missouri that also got a grant.
The NJ-CRC sent their winning letter to the Missouri address of Nathaniel Ruby.
(UPDATE: RUBY SAYS THEY DID NOT ACCEPT IT.)
Illicit Gardens is taking over the Harmony dispensary chain, which fell apart under the leadership of the former NJ Cannabis Trade Association President Shaya Brodchandel.
They are also in the process of securing their own New Jersey cannabis cultivation license.
Nightjar of New Jersey and Colorado Featured
The dispensary where the EDA’s New Jersey cannabis grant award ceremony took place it was held in Bloomfield. Nightjar is not New Jersey-based.
They said to Heady NJ the majority owner lives in Colorado.
The leaders of the company also have strong ties to Massachusetts.
However, Chief Operator Officer Francesca DeRogatis did say she is from New Jersey and moved back. She was front and center at the EDA event and did seem to indicate she had more than a token five percent stock.
Ascension Cannabis Brands of Colorado or South Jersey
Ascension Cannabis Brands Co. is based in Lakewood, Colorado. They were number 26 on the list. Ascension Cannabis Brands Co. is based in Westminster, CO, according to the letter the NJ-CRC sent them.
They operate one dispensary in Colorado.
The NJ-CRC letter went to Nathanael Mehle. His LinkedIn profile shows he lives in Mount Holly in Burlington County.
The business is registered on Bizapedia in New Jersey to Deborah Sidran-Hertz lives in Monmouth County, where it’s also registered.
Highgrade Laboratories of New Jersey LLC, Based in Oklahoma
According to Bizapedia, Highgrade Laboratories of New Jersey LLC is registered in New Jersey. But they have a mailing address in Oklahoma.
The company’s LinkedIn page says they’re based in Oklahoma.
Their Instagram account says they’re in Oklahoma, Maryland, and New Jersey.
Their website says their Jersey location is “coming soon.”
Highgrade Labs is set to operate in Riverdale in Morris County.
Brighterside Canopy LLC of South Jersey and CO?
The Brighterside Canopy LLC company, officially of Mays Landing in Atlantic County in South Jersey, has many ties concurrent with the Brighterside Vertical Farms which, according to their Facebook and LinkedIn profiles, is based in Steamboat Springs, CO.
In a letter to Pleasantville, NJ, they explained they launched in the Colorado medical cannabis market. However, they transformed into an ancillary company selling equipment to other cannabis companies.
Many Jersey-Born Winners
Heady NJ did extensive research into the 48 New Jersey cannabis grant winners in the Joint Venture round. The majority of the New Jersey cannabis grant winners do indeed have New Jersey-based owners. For example, Haytham Elgawly of Xena NJ, formerly Medusa of Jersey City, won. He was featured at Heady NJ’s September forum last year as an example of progress being made in the New Jersey cannabis industry.
In addition, New Jersey pharmacist and cannabis entrepreneur Alan Ao of Vigor won, along TJ Jadhav of MoJo Botanica and Jill Cohen of Elevated by Cannaboss Lady, and others.
Who Won a New Jersey Cannabis Grant?
The full list of New Jersey cannabis grant winners is as follows:
1. J & J Flowers LLC.
2. Mojo Botanica LLC.
3. Brighterside Canopy LLC.
4. Ginger Hale LLC.
5. Hamilton Farms LLC.
6. Urge NJ LLC.
7. Sensory Dispensary LLC.
8. THE CANNABIS CLUBHOUSE LLC.
9. Premo Cannabis Company LLC.
10. Vigor Dispensary LLC.
11. Citi Roots LLC.
12. Molly Ann Farms LLC.
13. Cannaboutique by Greenhouse.
14. Queen City Wellness LLC.
15. A cultivation site located in Ocean County.
16. Cloud Nine Dispensary LLC
17. Treehouse Ventures LLC
18. Canna P Farms LLC
19. Xena NJ LLC.
20. NJ Greencare LLC.
21. City Leaf Corp.
22. Canna Remedies LLC.
23. Kind Kush LLC.
24. Green Leaf Pharma LLC.
25. Green Knight Cannabis LLC.
26. Ascension Cannabis Brands Co.
27. Indigo Dispensary LLC.
28. Brotherly Bud LLC.
29. Hera Solutions LLC.
30. Jersey Shore Ventures Group LLC.
31. Nightjar Holdings LLC.
32. Jersey Smooth LLC.
33. Elevated by the CANNABOSSLADY.
34. E.V. LLC.
35. Highgrade Laboratories of New Jersey LLC.
36. La Vida Gardens LLC.
37. Yerrr Canna LLC.
38. Puffin Store LLC.
39. Seraph & Sons LLC
40. Hound Town 543 Inc.
41. Jersey Roots LLC.
42. Sun Extractions Inc.
43. Hamm & Chaz LLC.
44. Golden Door Dispensary LLC.
45. Stoke Industries.
46. Lucky Buds LLC.
47. Dispensary located in Hudson County.
48. Dispensary located in Ocean County.
