Opportunities in the New Jersey Cannabis Market

New Jersey legalized recreational cannabis in November 2020 and the state is hopeful that New Jersey cannabis market will help boost their economy after COVID-19. The state has until August 21, 2021 to establish temporary rules for regulating cannabis businesses and will start accepting applications 30 days after.

New Jersey will not allow home grow, but the state will allow cannabis delivery which will incentivize more reliance on cannabis businesses. New Jersey has also taken on social equity initiatives to allow minorities and those most adversely impacted by the war on drugs to benefit from this new opportunity.

Current Status

In 2010, the New Jersey legalized medical-use cannabis and the state now has over 100,000 registered patients. However, this number places significant strain on the medical “Alternative Treatment Centers,” of which there are only 13.

Since sales from recreational dispensaries are not expected to begin until later this year, consumers can purchase recreational products from approved medical dispensaries in the meantime. Alternative Treatment Centers must first prove that recreational cannabis sales will not limit their supply of medical marijuana to patients and caregivers prior to approval for dispensing recreational cannabis.

Cannabis Businesses

New Jersey will allow six different types of licenses: cultivator, manufacturer, wholesaler, distributor, retailer, and delivery. The Cannabis Regulatory Commission, or CRC, is in charge of overseeing regulations and establishing guidelines. They’ve discussed adopting interim cannabis lab testing rules from other states before establishing their standards for contaminants like heavy metals and pesticides.

Until sales begin, cannabis business advocates hope the CRC will take this time to ensure a fair and equitable cannabis marketplace. This can be achieved through establishing a “responsible, sustainable, profitable, and diverse adult-use market and expanding the medical market,” according to Edmund DeVeaux, head of the New Jersey Cannabis Business Association.

To level the playing field, at least 25% of total licenses will be allocated to social equity applications or those who will employ at least 25% of their employees from “impact neighborhoods,” or areas most adversely impacted by the war on drugs. Another 30% will go to businesses owned by women, minorities, or veterans, while no less than 25% of all licenses will go to microbusiness with ten employees or less.

New Jersey Cannabis News

New Jersey cannabis is expected to pull in $126 million annually, and the state is hopeful this can go towards economic repairs from the pandemic.

But relief from the pandemic is not the only thing New Jersey residents are concerned about. Comments from CRC public hearings expressed concern on social equity and business incentives. Entering the industry requires a significant amount of capital, but since cannabis remains federally illegal, banks cannot issue loans.

Residents are hopeful the state will issue grants and that the CRC will prioritize small and local businesses over the larger corporations from out of state. Of course, the best way to incentivize regulators to adopt best practices is through involvement and engagement. Updates on the next CRC public hearings can be found on the New Jersey Department of Medical Marijuana website.

How Can Sapphire Risk Help?

Tony Gallo and the team of application writers and consultants at Sapphire Risk Advisory Group have worked extensively in the State of New Jersey. Follow us on social media to stay up to date with New Jersey cannabis industry updates!