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New Jersey Adult-Use Cannabis Licensing

NEW JERSEY CANNABIS REGULATORY, ENFORCEMENT ASSISTANCE AND MARKETPLACE MODERNIZATION ACT (CREAMMA

On February 22, 2021, New Jersey Governor Phil Murphy enacted the “New Jersey Cannabis Regulatory, Enforcement Assistance and Marketplace Modernization Act” ("CREAMMA" or “Act”) legalizing personal use cannabis for adults (21 years and older). Under the Act, adults may purchase cannabis products for recreational and/or personal use from licensed retail businesses. 

LICENSING 

The Cannabis Regulatory Commission (“CRC”), comprised of five members appointed by Governor Murphy, is charged with regulating the licensing and operations of cannabis businesses. 

CREAMMA establishes six classes of licensed operators:

(1) Cultivator

(2) Manufacturer

(3) Wholesaler

(4) Distributor

(5) Retailer

(6) Delivery 

The Act further establishes three types of licenses:

(1) A “conditional license” issues after a shortened application process. Thereafter, the licensee has a 120-day period (extendable up to 45 days at the discretion of the commission) to satisfy the conditions for full licensure. In order to obtain a conditional license, there must be a “significantly involved person” (consider ownership share, financial interest, and decision-making authority) with an adjusted gross income for the preceding tax year of no more than $200,000. Conditional license applicants must include an owner who is a "significantly involved person" and who is a current resident of New Jersey for at least two years. 

(2) A “microbusiness” is defined as: (a) employing 10 or fewer employees; (b) possessing 1,000 or fewer cannabis plants; (c) operating and growing in an area of 2,500 square feet or less; (d) acquiring 1,000 pounds or less of usable cannabis per month; (e) acquiring for resale 1,000 pounds or less of usable cannabis; and (f) acquiring for retail sale 1,000 pounds or less of usable cannabis. The microbusiness owner(s) must have each been a resident of New Jersey for at least two years. 

(3) Both conditional and microbusiness licenses can convert into a “full license”. The full license expires after one year, but can be renewed upon submission of a new application. Full license business-applicants must include an owner who is a "significantly involved person" and who is a current resident of New Jersey for at least two years. 

APPLICATION PROCESS

The CRC will process applications pursuant to a point scale system, allocating points based on the applicant's operating, security, and environmental plans. Further, the CRC will prioritize micro and conditional licenses, as well as applications from certified minority-, women-, and disabled veteran-owned businesses. The CRC will prioritize business licensing in impact zones (zones negatively impacted by poverty, unemployment, or past marijuana enforcement), applicants residing in impact zones for at least three years, and businesses employing residents of impact zones. Other application priorities go to long-term in-state residents (of five years or more). 

Once a complete license application is submitted, the CRC aims to review the submission within 90 days and, if approved, issue the license within 30 days after notice of approval. 

All licensing fees, penalties, and tax revenues will go into the “Cannabis Regulatory, Enforcement Assistance and Marketplace Modernization Fund”, to be allocated to the operations of the CRC, investments in impact zones, and reimbursement of expenses incurred for the training of police officers and/or troopers in the Drug Recognition Expert program. 

EFFECTIVE DATES

On August 19, 2021, the CRC adopted initial rules and regulations for the recreational cannabis market. Licensing applications will be accepted within 30 days after the initial rules and regulations have been adopted. Accordingly, the application submission process is expected to open soon.

Regulators must still elect a date for sales to launch within 180 days of the enactment of CREAMMA on February 22, 2021. The CRC will provide at least 30 days' notice before retail sales are to begin.

PREPARE NOW FOR YOUR UPCOMING APPLICATION

The legal cannabis industry is growing, evolving, and highly-regulated. To succeed, it is a must for businesses to obtain licenses and insurance necessary to operate legally and position themselves to expand if desired. Leaf Legal, P.C. is fully equipped to guide your company as it obtains licenses, identifies and recruits our industry's top talent, executes its business plan, and navigates New Jersey's ever-evolving regulatory scheme. Contact the attorneys at Leaf Legal, P.C. to schedule a consultation.

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