What are financial source agreements in New Jersey Cannabis?

Financial source agreements under the New Jersey cannabis law are contracts that contain protective clauses and terms by regulatory rule to protect priority applicants from being manipulated or taken advantage of by wealthier investors that may be trying to exploit their priority status. Priority applicants are given a lot of protections and preferences under the New Jersey cannabis legalization law. Many applicants that win licenses will be priority applicants, and the financial source agreements that they use will protect them so they can keep the generational wealth and not have it taken by investors in a straw-man style transaction. 

How can priority applicants benefit from financial source agreements

Priority applicants will receive a lot of the cannabis licenses in New Jersey because of the law’s goals of reducing the barriers to entry and giving priority to applicants from specific groups. The groups that receive priority include:

  1. Certified minority owned businesses
  2. certified female owned businesses
  3. certified disabled veteran owned business
  4. Social Equity owned business
  5. impact zone owned business

These priority applicants will have their conditional cannabis business license applications reviewed first so that they can get first chance at the licenses.  The conditional application requires certain financial conditions for lower income.  This means that most conditional applications will require financial source agreements.

For help with your Financial Source Agreements – Click Here. 

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