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NJCRC Releases Cannabis Consumption Area Rules for Comment

The New Jersey Cannabis Regulatory Commission (NJCRC) has submitted updates to its regulations to include cannabis consumption areas. 

The rules with amendments and a link for public comment are on the agency’s website. New Jersey residents are invited to give feedback on the proposed rules up to Saturday, March 18, 2023.

The new language in the rules establishes the qualifications, application process, and operation instructions for cannabis dispensary retailers that wish to have spaces on premises designated for customers to consume cannabis.  Some of the regulations added for cannabis consumption areas include:

  • Consumption areas must be connected to a licensed dispensary.
  • Consumption areas must allow medicinal patients to consume products bought from another dispensary.
  • The sale of food and alcohol will not be allowed by the dispensary, but guests can bring or order food for delivery to the consumption area.
  • Staff will be required to refuse service to obviously impaired individuals

The third provision of not allowing the sale of food or soft drinks has some owners looking for loopholes.

Heady NJ only knows of 10 pro-adult-use cannabis consumption area towns in New Jersey.

The NJCRC first announced the cannabis consumption rules were going to be released soon was in December.

Atlantic City in South Jersey is the closest town to opening a cannabis consumption lounge.

However, Jersey City, which is larger, has many more cannabis consumption areas to approve.

The Jersey City Cannabis Control Board (CCB) has been waiting for the NJCRC to release rules before approving any lounges. Dispensaries that want to add lounges had their applications bifurcated.

Thus to secure cannabis consumption lounge municipal approval, they will likely have to appear before the CCB again.

Recently, Raekwon of Wu-Tang announced the approval of a cannabis lounge expected to open in Newark in the earlier part of 2023.

Cannabis Consumption Area Rules

The rules detail that dispensary workers must attend training the NJCRC holds for cannabis consumption areas.

“The Commission expects the rules to advance social equity by promoting opportunities in New Jersey’s cannabis industry for persons from statutorily designated target communities, specifically Social Equity Businesses; Diversely Owned Businesses; and Impact Zone Businesses, who receive priority review and approval in the application process,” the cannabis consumption areas rules say. “These businesses will be among the first in line to receive cannabis retailer licenses in the State and can subsequently apply for a cannabis consumption area endorsement.”

Unconsumed cannabis must be sealed to leave the cannabis consumption lounges. Otherwise, it must be destroyed.

The cannabis consumption areas rules note the shaky agreements that allow them to regulate a federally illegal substance.

They admit the nearly revolutionary of this saying, “the Commission is unable to estimate the number of positions cannabis retailers would need to fill to perform these functions. This will depend on how many municipalities authorize cannabis consumption areas and how many cannabis retailers apply for an endorsement.”

They also note towns have an enormous amount of power in allowing or denying cannabis consumption areas. In fact, once they receive applications, they will forward them to towns as well.

Application Details

The cannabis consumption area endorsement application approval fee is $200. The cannabis consumption area endorsement application approval fee is $800. This two-part structure likely applies to conditional licenses.

The microbusiness cannabis consumption area endorsement initial or renewal licensing fee $1,000. The standard cannabis consumption area endorsement initial or renewal licensing fee is. $5,000,

Qualifications for securing a cannabis consumption lounge license and grounds for denial are reasonable according to the rules.

The rules say the official mechanism to appeal a poor decision since the cannabis lounge rules say “any person aggrieved by the municipal denial of an endorsement application or municipal revocation of an endorsement may request a hearing in the Superior Court of the county in which the application was filed.”

Regarding its design, they shall only be accessed through an interior door after first entering the dispensary. They must comply with ventilation requirements applicable to cigar lounges to cope with smoke.,

Amusingly, they don’t like the idea of free samples.

The consumption areas rules raise the idea that a medical cannabis consumption lounge could open. However, that would greatly affect a cannabis company’s ability to do business if they cannot allow adult-use consumers. Thus, none are likely to open.

Long Awaited Guidance

The NJCRC’s cannabis lounge rules have been delayed for some time. The initial rules for the New Jersey adult-use cannabis market were released in 2021 and finalized last year. While they have made progress on this long-awaited promise, edibles rules remain forthcoming.

Cannabis consumption lounges remain controversial and few and far between, even in Colorado, California, and Nevada legal cannabis markets.

Some have already had success in New Jersey with Bring Your Own (BYO) cannabis events.

The NJCRC establishes and enforces the rules and regulations governing the licensing, cultivation, testing, selling, and purchasing of cannabis in the state.

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