Heady NJ’s Working in South Jersey Cannabis Gathering this past Saturday was a great success.The event showcased the budding New Jersey cannabis industry. NJ Cannabis Regulatory Commission (NJCRC) Commissioner Krista Nash served as the gathering’s keynote speaker.
An event that started as a humble forum turned into a mini-convention with many sponsors and attendees signing up. Attendees and vendors packed the UFCW Local 360 union hall in Berlin Township. Many had to park on the grass and the street.
The hall was abuzz with the delighted conversations of many cannabis patients, consumers, enthusiasts, activists, and business people gathered. Many New Jersey adult-use cannabis license holders, applicants, ancillary companies, and professionals mingled amidst the friendly crowd.
Since the New Jersey cannabis legalization process has made progress, we are beginning to see adult-use license holders establish themselves. Rec House dispensary, which plans to open in nearby Waterford, was happy to sponsor and table at the event. Cannabis Equity Employment, a non-profit by Baked by the River dispensary of Lambertville, also tabled. SV Labs NJ also served as a sponsor. Several other license holders in the process of opening attended and spoke of their plans.
Everyone seemed to enjoy themselves in the consumption-friendly hall, and several posted many pictures and videos on social media. So many great people from the local New Jersey Cannabis Community came together to make an amazing day for all in attendance.
NJCRC Commissioner Krista Nash Keynote
Nash’s keynote speech touched on many issues in the New Jersey weed market.
The current prices in the New Jersey cannabis market are too steep, she noted.
“That is especially problematic for medicinal patients who find cannabis to be more helpful than traditional medicine. One would hope that in generating this amount of revenue, a more compassionate approach might be considered, such as lowering prices to make it more affordable,” Nash said. “We frequently see social media posts alleging that the CRC unfairly allowed the existing operators to have first advantage in the market, this new adult-use market.”
“These companies were grandfathered in by the CREAMM (Cannabis Regulatory and Marijuana Modernization) Act. This begs the question, where are all the other businesses? The CRC has received over 1500 applications, which have all begun the review process,” she explained. “Of these, 133 are conversions, and they’ll be closer to becoming operational with hopefully little to no delays. We also have approved annuals that have finally moved their way up from the queue, and 20 have been approved in recent months.”
Access to Capital in New Jersey Cannabis
“While the legislative intent was to prioritize additional applicants, unintended consequences occurred, and it left people, um, you know, they, they slaughtered their monetary resources while they waited for review,” she said.
Nash noted they have made progress approving Social Equity, minority-owned, and women-owned businesses along with those in Impact Zones.
“I have sat through a number of public meetings and heard from you, the public, about the many challenges that applicants are facing that are not always within the CRC’s control,” she explained. “It has been frustrating, to say the least.”
She did note they set up access to capital work group to address the issues which met with the NJ Economic Development Authority (NJEDA) to launch the forthcoming cannabis grants program.
“$10 million has been earmarked for the cannabis equity grant program to help startups, with 60% designated for social equity business,” Nash said.
South Jersey Cannabis Town Problems
She noted the many problems with getting the South Jersey cannabis industry operating since many towns are wary of approving licensed companies.
“Some municipalities are overlooking applicants who are residents of the community that they live in, and instead, they’re choosing larger, more experienced operators that do business in other states,” Nash said. “The CRC continues to engage and educate municipal leaders in an effort to pay the way for applicant residents.”
“America’s playground, the Atlantic City, has been making great strides in their thoughtful approach to bringing cannabis businesses and cannabis culture to the city,” she noted.
Nash explained other towns have become more open to cannabis.
“South Jersey is leading in the number of annuals and conversions,” she declared.
Nash then showed which towns in South Jersey are friendly for cannabis companies.
“Out of 201 municipalities in South Jersey, 175 have opted out. “We need lot more,” Nash declared.
Cannabis Entrepreneur Training
She noted the need to train many with the NJBAC since 2/3s of the applications had errors with caused delays.
“The Cannabis Training Academy supported by the Business Action Center will helpful,” Nash said.
“If your business plan states you need X amount of dollars to become operational, you have to show where you’re going to get that. If you have an angel investor providing a financing, financing agreement, or commitment letter. Or if you have the money, just show it,” she explained. “These oversights that may seem small. They cause a delay in the process, and both business owners know time is money.”
“The CRC designated the Business Action Center to provide no-cost technical assistance, training, and mentorship. They will also serve conditional applicants and conditional license holders in the annual conversion process and provide ongoing mentoring to fully operational licensees during their first year of business,” Nash noted.
Watch Out for Shady Operators
“We’ve heard the process takes long. There’s complicated private equity structures for ownership. We wanna make sure we are checking and double checking,” she declared.
“Limitations on license ownership, this is a big one. We look at Financial Source Agreements (FSAs), we look at Management Service Agreements (MSAs),” Nash explained. “There are predatory lenders, and we have requirements in our regulations that protect you. If we see something … we’re definitely gonna take a look at that. The other thing is you see lots of private equity shell companies. That takes a while to flush out.”
“We’re not just rubber stamping everything. We’re diving into who lenders are, and they are ensuring that they don’t own more businesses than they should,” she declared.
“On January 17th, the CRC posted and proposed amendment amendments regarding cannabis consumption areas. The public is invited to provide comment on these proposed rules, and the end of the comment period is March 18th,” Nash said.“Some things, like the prohibition of serving food and beverage, is a legislative fix and not something CRC can do.”
She also commended the UFCW on the work they do ensuring a unionized, well-trained workforce.
“We have typed up the labor language and the rules to hold these businesses accountable for compliance in this area and are continuing to monitor businesses who fail to comply,” Nash said.
“The New Jersey cannabis industry is evolving. With the oversight of the commissioners and the board, we are working hard to create a thriving and equitable industry here in New Jersey,” she declared.
(This is Part I of a series on our Working in South Jersey Cannabis Gathering. Stay tuned for more!)