How to Open a Cannabis Dispensary in New Jersey
Want to Get a Dispensary License in New Jersey in 2021?
How to Open a Dispensary in New Jersey
How to get a dispensary license in New Jersey? That’s the question you should ask yourself if you’re thinking about opening a dispensary in New Jersey. In order to obtain a dispensary license, you’d need to comply with requirements established by the new law on the matter.
Medical marijuana businesses became legal in New Jersey in 2010 –although heavily regulated- just to give some perspective on this: even though the state has a population of 8.8 million, there are only 13 medical cannabis dispensaries. In comparison to other states, like Arizona, which has a population of 7.2 million and 120 medical cannabis dispensaries –being that medical marijuana was also approved since 2010- you can get an idea of how tough the regulations are in New Jersey.
Since November 2020, recreational marijuana businesses have been legalized, thanks to a ballot initiative. According to this initiative, The Cannabis Regulatory Commission (CRC) will oversee the state’s marijuana program and the issuance of associated licenses, and among them, the dispensary licenses. However, the county and city where the business will be located may also determine whether you can start a business within their borders or not.
With some sources stating that the market size of legal marijuana is expected to reach $23 billion by 2025, the one thing that’s certain about this state is that there’s good money to be made in legal Cannabis in New Jersey –once you decide you’re willing to overcome all the bureaucracy and some stiff competition.
Unfortunately, 22 August 2019 was the last date to apply for a medical marijuana dispensary license in New Jersey and since then, there hasn’t been another period to apply for it. However, this doesn’t mean that it won’t open anytime soon. What’s even more: with the approval of adult-use marijuana, there’ll be an opening for businesses to get a dispensary license soon.
So, now is the time when you need to know what to do, what to expect, and how much everything is going to cost, so you can get ahead of your competition. Bear in mind that these tips are based on current regulations for medical marijuana dispensaries, since the rules for adult-use dispensaries have yet to be released and some aspects may change a bit with time.
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Want to Get a Dispensary License in New Jersey in 2021?
How to get a Medical Marijuana dispensary license in New Jersey
Establish the business type and business plan for your cannabis dispensary
According to the “New Jersey Compassionate Use Medical Marijuana Act” the first two Alternative Treatment Centers (Medical Marijuana Dispensaries) in each of the regions of the state (northern, central, and southern) shall be nonprofits entities. However, permits issued for subsequent ATCs may be given to nonprofits or for-profit entities (C.24:6I-7)
You should know what type of marijuana business will be a good fit for you, your partners, your budget, and your skillset. So many clients start out wanting one business and realize another is actually a better fit for them. If you get this wrong you may have to start all over from square one.
This is also when you should consider bringing in your first, key directors and managers, preferably experienced in marijuana or at least retail, to help with building your company.
You would also need to put together a detailed business plan that should include:
- Financing plan
- Quality control and quality assurance plan
- Dispensary/operations plan
- Labor compliance plan
- Workforce and job creation plan
- Security plan
- Environmental impact plan
- Anything else you think would help you stand out and attract investors
If you’re unsure how to make a proper business plan, you can always check how to make a business plan on our page where we cover the basics of it.
Most people completely underestimate how much it costs to actually start a recreational marijuana business. But they also underestimate how much money it can make.
Truth is, most banks and investment firms won’t touch you or your company with a ten-foot pole until federal legalization occurs. To secure funding for your cannabis business, you’ll need investors. You can start with family and friends and with investment firms that specialize in funding cannabis companies. You can also check out our pitch deck package, in which we can help you create a custom cannabis pitch deck for your start-up in order to secure investors.
Make sure to keep track of all your sources of funding. You’ll have to list any funding above a certain threshold in your application.
Find a location to open your cannabis dispensary
New Jersey requires you to have control of a property in an area approved for a marijuana dispensary ready before you apply for a dispensary license. You need to comply with local zoning laws and get proof of support from the city government where you’re locating your dispensary. This could be a copy of a city law or simply a letter of support from the mayor and/or city council.
Your dispensary needs to be a certain amount of distance away from locations like schools and daycare centers. Other states require you to locate your dispensary a certain distance from other cannabis businesses as well, though this isn’t a problem in New Jersey yet since so few dispensaries have been approved.
It’s not ideal to have to rent out a property before you can even start opening your business and having to continue renting it out for months while government officials review your application, but that’s the way it is.
What Documents You Need to Open a Medical Cannabis Dispensary in New Jersey
Unfortunately, New Jersey doesn’t have any active dispensary application forms available online right now to view. However, you can view this past medical marijuana application as an example to get an idea of what you’re in for.
Dispensary applications can run into the hundreds or even thousands of pages. You’ll be submitting a lot of the documents you created in the planning phase, plus additional info such as:
- Articles of incorporation/by-laws
- Approval from the local municipality
- Mockup of the expected exterior appearance of dispensary
The application fee is $20,000, with $18,000 of that refundable if your application is rejected.
How to get an adult-use dispensary license in New Jersey
In order to open an adult-use cannabis dispensary, according to the latest legislation in the matter you would need to get a Class 5 Cannabis Retailer license, issued by the CRC.
The CRC shall determine the maximum number of licenses, of which at least 35% shall be conditional licenses and at least 10% of the total number of licenses -and conditional licenses- shall be designated and issued to microbusinesses (AKA: a business that employs no more than 10 employees and possesses no more than 1,000 cannabis plants each month).
Furthermore, the CRC would require that an applicant for licensure -other than an applicant seeking to operate a microbusiness of any class- submit an attestation signed by a bona fide labor organization stating that the applicant entered into a labor peace agreement with such bona fide organization.
The maintenance of an agreement would be an ongoing material condition of a full, annual dispensary license. Submission of proof of an agreement from an applicant originally issued a conditional license would be a requirement for final approval granting full licensure.
According to the new law, the requirements to apply for a Class 5 Cannabis Retailer license would be:
- Having at least one significantly involved person who has resided in NJ for at least two years as of the date of application, and provide proof that this person and any other person with a financial interest who also has decision making authority for the cannabis retailer listed on an application is 21 years of age or older.
- Meet the requirements of any rule adopted by the commission regarding the payment for the application fees and to follow the requirements for any retailer to meet public health and safety standards as well as industry best practices.
- Provide for each of the owners, directors, officers, and employees to undergo a criminal history record background check (this provision doesn’t apply to owners who gold less than a 5% investment interest in the cannabis retailer or who is a member of a group that holds less than a 20% investment interest in the cannabis retailer and no member of that group holds more than a five percent interest in the total group investment, and who lacks the authority to make controlling decisions regarding the cannabis retailer’s operation).
In addition to the above requirements, any individual who performed work for or on behalf of any class of licensee would need to have a valid certification issued by the commission, in order to participate in the possession, securing or selling of cannabis items at the licensed premises; the recording of the possession, securing, or selling of cannabis items to and from licensed establishments, or residential delivery of cannabis items and related supplies to a retail consumer.
In order to obtain said certification, the CRC could require anyone applying for it to complete a one time course that provides training on checking identification, detecting intoxication, the proper handling of cannabis items, and statutory and regulatory provisions relating to cannabis. The person seeking certification would also be subject to a criminal history record background check.
The CRC would review each application for a full annual dispensary license and score it based upon a point scale with the CRC determining the amount of points. The criteria for consideration in the point scale would take into account, among other things:
- The applicant’s operating, environmental, and safety and security plan.
- Whether the applicant is from an “impact zone” which are municipalities negatively impacted by past marijuana enterprises that contributed to higher concentrations of law enforcement activity, unemployment, and poverty.
- Whether the application includes an in-state resident of at least five years who was a “significantly involved person”, being someone who holds at least 5% investment interest, or is a member of a group who holds at least 20% investment interest and would have authority to make controlling decisions.
- Whether the applicant is a party to a collective bargaining agreement with a bona fide labor organization that currently represents, or is actively seeking to represent cannabis workers in New Jersey, or other states.
The CRC would complete its review for the dispensary license approval or denial within 90 days (for the full license) or 30 days (for the conditional license) counting from the date of the submission of the application unless the commission determined that more time is required. If approved a dispensary license would be issued by the commission not later than 30 days after it gave notice of the approval.
Conclusion of How to Open a Dispensary in New Jersey
The most important part of opening a cannabis dispensary in any state is sticking to the regulations. In this sense, is always recommended to consult an attorney for the applicable regulations as well as the steps to follow in order to comply with them.
Although not all the laws are the same across the US states, most of them fall under the same category. Application requirements, data required, and specific information about your business should always be in hand when you apply for a dispensary license.
If you are not sure how to make your application complete, you can contact the right attorney who will help you create the right plan for your application process when you want to open a cannabis dispensary in New Jersey.
Don’t miss out on our Marijuana Legalization Map where you can browse the current status of laws in every state in the United States and see all our posts on each of them.
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