The New Jersey Economic Development Authority (NJEDA) announced the creation of its Cannabis Equity Grant Program. It has been long awaited.
Up to $10 million in state funding will be available for applicants. It’s designed to help start-ups with early-stage expenses and technical training.
“The establishment of the Cannabis Equity Grant Program will help aspiring small business owners meet start-up expenses,” said Governor Phil Murphy. “The program will erode considerable barriers to access for communities of color. This program will help to equip them with the resources they need. To not just enter, but thrive, in this exciting new industry.”
Cannabis Grant Program Details
$10 million will be made available in the initial pilot program. Sixty percent will be made available to qualifying social equity applicants. That includes those who have previous cannabis convictions or live in Economically Disadvantaged Areas (EDAs). The NJ Cannabis Regulatory Commission (NJCRC) defines EDAs as zip codes that meet certain socioeconomic criteria.
They can receive up to $250,000 to help with certain start-up expenses like regulatory fees, rental expenses, utilities, and wages. Qualifications for these businesses include holding a conditional cannabis license and business formation after March 2020. They must also have 50 or fewer employees. Grantees will also participate in technical assistance and business education courses provided by the NJEDA.
The remaining 40 percent will be open to others. They must have secured municipal approval and site control over their business’s real estate.
That might leave out a few companies with conditional licenses. A good many will qualify through their prioritization alone.
Applicants with conditional licenses and existing approvals can receive up to $250,000 in grant support for eligible expenses.
Tied to the legislation signed earlier this year are the allocations for Impact Zones. They are areas targeted based on previous levels of cannabis arrests, population, unemployment rates, and additional socioeconomic factors. Five percent of the total $10 million will be reserved for businesses located in Impact Zones.
To further help EDA applicants, the $1,000 application fee may be waived.
The applications window will be open for six months following the program’s launch.
“The NJCRC has understood that if we want New Jersey’s cannabis market to reflect the diversity of its residents, and if we want to ensure that it is inclusive of groups that bear the scars of prohibition, designated access to capital would be essential,” said NJCRC Chairwoman Dianna Houenou. “We have been working with several partners in and outside of state government to identify sources of the capital cannabis entrepreneurs need. We are grateful that our own state Economic Development Authority is stepping up. I am thrilled to see this program become a reality. I look forward to seeing its substantive impact leading to cannabis entrepreneurs opening for business.”
“This program can have a positive impact by supporting diversity in New Jersey’s cannabis industry during its formative stages,” she added.
“New Jersey is committed to building a thriving and inclusive cannabis sector that maximizes opportunities for underserved communities and people impacted by the War on Drugs. This program is a major step toward that goal,” said NJEDA Chief Executive Officer Tim Sullivan. “We look forward to continuing to partner with the Cannabis Regulatory Commission to advance additional programs to support entrepreneurs.”
“We realize how important it is to empower cannabis businesses. Many have faced barriers to accessing financial capital,” said NJEDA Chief Community Development Officer Tai Cooper. “Communities that suffered unfairly during the criminalization of cannabis need the chance to benefit from new entrepreneurial opportunities created by cannabis legalization.”
“We want to see these opportunities extended to those businesses. That will help fill storefronts, warehouses, and other commercial properties that closed their doors during the pandemic and bring new jobs to communities where there is the greatest need,” she added.
Praise from the State House
“These grants will help provide more opportunities to a greater number of operators in a larger number of communities to participate,” said Senate President Nick Scutari (D-Union).
“We have been very intentional about standing up a statewide cannabis industry that works to the benefit of New Jersey consumers, businesses, and our state’s overall economic development,” said Assembly Speaker Craig Coughlin (D-Middlesex). “It’s important next steps center on creating opportunities for small and aspiring retailers to enter the market.”
“The prohibition of cannabis has, for decades, disproportionately and negatively affected young people in Black and Latino communities,” said Senator Nellie Pou (D-Passaic). She is Chair of the Legislative Latino Caucus.
“I am heartened to see NJEDA launch this Cannabis Equity Grant Program to help financially with start-up costs for new businesses in those communities that have been adversely affected,” Pou added.
“This is one more important piece of the social equity contract that remains at the heart of cannabis legalization in New Jersey.”
“The NJEDA’s Cannabis Equity Grant Program serves as a clear reminder that minority-owned businesses must be an integral part of the emerging cannabis market beginning to take root in our state,” said Senator Vin Gopal (D-Monmouth). “Starting up a business of any kind has its ups and downs.”
He added he is excited to see the NJEDA step up and the opportunities the grant program would create.
“The Cannabis Equity Grant Program will help level the playing field for entrepreneurs,” said Assemblywoman Eliana Pintor Marin (D-Essex).
She was happy it would help those looking to enter New Jersey’s adult-use cannabis market,
Marin noted that by prioritizing equity and inclusion, New Jersey can establish a socially responsible cannabis industry. It will create jobs and opportunities for those who have been disproportionately impacted.
“We are pleased with the efforts of the NJEDA to authorize critical resources. They will assist our constituency in advancing their plans to participate in the recreational cannabis industry,” said NJ African American Chamber of Commerce President John Harmon.
“I applaud the leadership of the NJEDA for their willingness to listen. They’ll engage in a frank dialogue with business enterprises that have capital at risk. We can realize a transformation that will lead to a more equitable New Jersey,” he added.
“It is smart business to offer grants. It can help this massive economic engine propel us forward,” said NJ Hispanic Chamber of Commerce CEO Carlos Medina.
“I am in full support of funding the Cannabis Equity Grant Program to help private entities,” said Lt. Governor Sheila Oliver. “The Murphy Administration fought for the legalization of cannabis because of our commitment to social justice issues.”
Suppose several conditional license winners don’t get money in time. Then the social justice aspect of legalization is likely to fail. Thus New Jersey cannabis will continue to be dominated by White male-owned corporations. They are Multi-State Operators (MSOs) with few ties to New Jersey. That has been the case with the New Jersey medical cannabis program for several years.
It remains to be seen how minorities run many companies that say they are minority-owned.
Many individuals formed companies and put a local minority or a woman as owners to receive prioritization.