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NJ Legal Cannabis License Applications Open for Cultivators, Manufacturers, Labs

Today is the first-day cannabis cultivators, manufacturers, and testing lab license applications to operate in the NJ adult-use cannabis market are accepted.

The application portal on the New Jersey Cannabis Regulatory Commission’s (CRC) website opened this morning at 9 am. Almost 500 individuals and entities established accounts in the first four hours. The CRC started accepting recreational cannabis license applications steadily. By 1 p.m., the application platform was averaging 155 new users per hour.

“We are happy to reach this milestone,” said CRC Executive Director Jeff Brown. “Applications are coming in. The platform is performing well, and we can officially mark the launch of the state’s recreational cannabis industry. Getting cultivators, manufacturers, and testing labs licensed and operating will set the framework. And establish supply for retailers who will start licensing in March 2022.”

NJ Adult-use Cannabis Market License Portal Opens

While there is no deadline to apply, there is a great incentive to apply for cannabis cultivators. The lack of a deadline is unlike in the previous medical RFA process, which lasted 29 months.

According to the NJ adult-use cannabis implementation law, only 37 large-scale cultivators are allowed in the NJ adult-use cannabis market. There are an unlimited amount of micro cannabis cultivation licenses available.

While the 12 licensed vertical cannabis license holders were expected to claim the first 12 cultivation licenses, that’s not certain. They must go through a certification process, and two have yet to open their primary dispensaries.

New Cannabis Cultivators and Manufacturers

Increasing cannabis cultivation is critical to the New Jersey cannabis market. Cannabis policy experts and advocates agree there has been a shortage of cannabis flower in the market since its inception. That has made the price too steep for many. In addition, legal, medical cannabis is often worse than cannabis found in underground markets.

Manufacturing licenses are also critical to creating products beyond mere flower. Flower, while popular among cannabis connoisseurs, doesn’t hold the same appeal for those who don’t want to break up a plant. Thus, those with manufacturing licenses can make the lozenges and syrups the CRC has authorized.

While the traditional pot brownie and similar products are not currently allowed in the interim regulations, the CRC has since indicated they will be allowed in some form. That will be under the final NJ adult-use cannabis regulations. They are likely to be released in August 2022, a year after the initial regulations were released.  

Thus, in theory, someone could apply for a license now to make edibles or infused drinks in the long term but stick to lozenges in the short term.

Testing labs are especially critical for the New Jersey cannabis market. Currently, only the State’s Department of Health lab is allowed to review the quality of cannabis currently being produced. This system has been criticized for its slowness and inadequacy for some time by cannabis advocates. The problems likely led to mold being found in medical dispensary cannabis.

The Cannabis License Applications Process

The CRC has a unique prioritization system where social equity is at its center. Under their rules, Social Equity Businesses, diversely-owned businesses, microbusinesses, and conditional license applicants will receive prioritization in the review and scoring process. These include businesses owned by individuals with past cannabis convictions, those from designated Economically Disadvantaged Areas, and minority-owned, woman-owned, and disabled veteran-owned businesses.

Some of those unsuccessful in the 2019 medical RFA will likely be applying for a NJ adult-use cannabis license today.

The CRC has released a legal cannabis license guide that explains the technical aspect of applying for a license through their website.

It is the first time that this new system is being used. The CRC is likely mindful of the issues that have held up New Jersey cannabis thus far and would like to eliminate them.

They have put out graphics that show all the pre-application and basic steps for someone in New Jersey wanting to pursue a cannabis license goes through to set up a business before applying.

Application Details

Cannabis license applications must note everyone who is a “Person of Interest” (POI). That “is any person substantially involved in the financing, operating, or management of a license applicant or license-holder. It includes owners, principals, management services contractors, and financial sources but does not include passive investors, employees, or volunteers.”

In addition, “a “Significantly Involved Person” is a person/entity a person that holds at least a 5% investment interest in a proposed or licensed cannabis business or who is a decision-making member of a group that holds at least a 20% investment interest in a proposed or licensed cannabis business, in which no member of that group holds more than a 5% interest in the total group investment interest, and the person/entity makes controlling decisions regarding the proposed or licensed cannabis.”

“Applicants are solely responsible for reviewing the rules, the Notice of Application Acceptance, and associated guidance, and for ensuring their application submissions are complete,” the document says.

Unlike previous medical license rounds, the CRC does not plan to release all winners at once. They will likely be one at a time. While they said they want to review applications in only 90 days, they also said it would likely take longer.

Thus the time to apply for an adult-use cannabis dispensary license begins on March 15th. But Brown indicated they are unlikely to have released any winners who applied today and afterward by then.

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