The NJ Economic Development Authority (NJEDA) announced the creation of the Cannabis Business Development (CBD) Grant Program that will award money to companies.
So there will be a new $5 million grant round. It will provide targeted financial support to eligible recreational cannabis entrepreneurs in New Jersey. The program will grant reimbursements of $75,000. It’s supposed to help with the cost of red tape, ongoing state and local compliance, and operating expenses.
To be eligible for the CBD Grant Program, businesses must be open and operating or close to launching.
Everybody wants to bet on a winning horse.
Close might be relative. No definition was provided by the NJEDA.
No details were released on when or how companies can apply. It will be a very competitive process regardless.
“New Jersey is setting the national standard for building an equitable, innovation-driven cannabis industry,” said NJEDA Chief Executive Officer Tim Sullivan.
He attributed it to Governor Phil Murphy’s (D) leadership.
“This grant is a strategic investment in small business growth, job creation, and long-term industry success,” he added.
“This grant program is another tool to expand opportunity for diverse cannabis entrepreneurs and to further the vision of an equitable marketplace,” said NJCRC Chair Dianna Houenou. “We are encouraged by NJEDA’s continued collaboration and commitment to investing in cannabis businesses rooted in New Jersey’s communities.”
NJ Cannabis Grant Contest Eligibility
So, this grant round might not do much to help struggling cannabis entrepreneurs who need more money to open.
Applicants must have a current NJ Cannabis Regulatory Commission (NJCRC) Cultivation, Manufacturing, Dispensary, or Testing Lab annual license.
Notably, to ensure that resources flow to small businesses that have lacked access to capital, Multi-State Operators (MSOs) and transitional Alternative Treatment Centers (ATCs) are not eligible.
“Centering equity in cannabis economic development means ensuring that capital flows to the local entrepreneurs who need it most,” NJEDA Chief Community Development Officer Tai Cooper argued. “By excluding MSOs and ATCs, this program prioritizes small, independent operators who are investing in New Jersey’s future, creating jobs, generating local wealth. And laying the groundwork for a more inclusive and competitive industry statewide.”
Winners of the last two grant rounds aren’t eligible either.
A strict definition of an MSO would include even a tiny company from another state.
(Interestingly, the small MSOs often also do not like the larger MSOs that seem to have more access to capital and the ability to influence the rules more. However, many local cannabis operators who have trouble with barriers to entry do not see such differences.)
Cooper was recently before the NJCRC touting the program. She previously hinted there could be a loan program set up versus grant contests in the long term.
Helping Impact Zone Cannabis Companies
Five percent of funding will be made available for businesses operating in New Jersey Cannabis Regulatory Commission (NJCRC) designated Impact Zones, which stimulate economic development in historically underserved areas.
The NJCRC designates the zones based on factors such as past cannabis arrests, law enforcement activity, unemployment, and population.
A high arrest rate occurred in some Impact Zones. So they are not all the inner-city type places you’d expect them to be.
More information about the CBD Grant Program will be posted in the coming weeks and months.
According to the NJEDA, the cannabis grant program is funded through cannabis sales tax revenue allocated by the FY25 State Appropriations Act.
The grant marks the third cannabis equity initiative round launched by the NJEDA and reinforces the State’s commitment to building an inclusive, sustainable cannabis industry.
According to the NJEDA, the previous Seed Equity and Joint Ventures cannabis grant rounds have delivered nearly $14 million and supported the openings of 40 cannabis businesses across New Jersey to date.
NJ Cannabis Grant Issues
Unfortunately, 75 grand isn’t much when you need between $400,000 and about $10 million to open a dispensary, cultivation, or manufacturing facility Heady NJ has heard from several cannabis entrepreneurs.
Heady NJ was not happy to have found that winners from the first cannabis grant contest included women and minority-owned companies from other states. At the same time, many Jersey Boy and Girl applicants, including minorities, needed that money too.
While an elaborate press conference and ceremony were held to award the first round of cannabis grant winners, they never announced the winners of the Social Equity grants.
Thus, Heady NJ cannot call that round successful.
However, the problem is so great for many small companies across the state-legal cannabis markets. Thus, even well-intended efforts that do not go as planned should be praised.
Most states that legalized cannabis have not launched grant programs like this.
