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How To open a Dispensary In New Jersey
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Question 1 added an amendment to the state constitution that legalizes the recreational use of cannabis, for persons age 21 and older and legalizes the cultivation, processing, and sale of retail marijuana. The constitutional amendment will take effect on January 1, 2021. New Jersey was the first state in the Mid-Atlantic to legalize marijuana.
The five-member Cannabis Regulatory Commission (CRC), which was first established to oversee the state's medical-marijuana program, was responsible for regulating the cultivation, processing, and sale of recreational marijuana.
Question 1 applied the state sales tax (6.625 percent) to recreational marijuana but prohibit additional state sales taxes. The state Legislature was authorized to allow local governments to enact an additional 2 percent sales tax on recreational marijuana.
The bill creates the organizational and regulatory system needed to oversee the industry in New Jersey. It will direct 70% of all sales tax revenue generated and all "social equity excise fees" on cultivators toward communities that have been most adversely-impacted by drug laws.
The other 30 percent of all sales tax revenue generated will go toward the operations of the Cannabis Regulatory Commission, as well as to support state, county and municipal law enforcement.
The ballot measure did not provide additional specifics, such as possession limits, home-grow rules, and retail regulations; rather, the legislature and CRC needed to enact additional laws and regulations.
Available cannabis business licenses are as follows:
CLASS 1 Cannabis Cultivator
Tier I Mature cannabis plant grow canopy area greater than 2,500 sq ft but no more than 10,000 sq ft, with a $5,000 license fee.
Tier II Mature cannabis plant grow canopy area greater than 10,000 sq ft but no more than 25,000 sq ft, with a $10,000 license fee.
Tier III Mature cannabis plant grow canopy area greater than 25,000 sq ft but no more than 50,000 sq ft, with a $20,000 license fee.
Tier IV Mature cannabis plant grow canopy area greater than 50,000 sq ft but no more than 75,000 sq ft, with a $30,000 license fee.
Tier V Mature cannabis plant grow canopy area greater than 75,000 sq ft but no more than 100,000 sq ft, with a $40,000 license fee.
Tier VI Mature cannabis plant grow canopy area greater than 100,000 sq ft but no more than 150,000 sq ft, with a $50,000 license fee.
CLASS 2 Cannabis (Processor) Manufacturer
With a facility less than 10,000 sq ft, will be a $20,000 licensing fee.
With a facility more than 10,000 sq ft, will be a $30,000 licensing fee.
CLASS 3 Cannabis Wholesaler
CLASS 4 Cannabis Distributor
CLASS 5 Cannabis Retailer
Retailer licensing fee will be $10,000
CLASS 6 Cannabis Delivery
Cannabis Lab Testing
Cannabis testing laboratory will have a licensing fee of $4,000.
Additional information regarding the current legislation can be found here:
New Jersey Medical Marijuana Program
On July 2, 2019 Governor Murphy signed the Jake Honig Compassionate Use Medical Cannabis Act to reform New Jersey’s Medicinal Marijuana Program (MMP) and expand patient access to medical marijuana. As of July 2019, a total of 51,000 patients, 2,000 caregivers and 1,000 doctors are participating in the program. The bill also creates New Jersey’s first Cannabis Regulatory Commission under the Department of Treasury, transferring responsibility from the Department of Health to the Cannabis Regulatory Commission. New Jersey does not allow homegrown marijuana under its current law. There are currently 6 Alternative Treatment Centers (ATCs) operating in the state.
The Department is no longer accepting ATC Applications as of August 2019 for dispensing, cultivation, and vertically integrated permits. On July 1, 2019, the Department of Health released an updated Request for Applications for 24 additional ATCs. The ATCs will have three types of permits: cultivation, dispensing, and vertically integrated permits. Vertically integrated permits include 1 cultivation endorsement, 1 manufacturing endorsement and 1 dispensary endorsement.
The Department will issue up to 5 cultivation endorsements, up to 15 dispensary endorsements, and up to 4 vertically integrated permits. State lawmakers have vowed to reintroduce legislation to legalize recreational marijuana next year, or file a ballot initiative to do so via constitutional amendment..
Application Fees/Start up costs
Application fees are $20,000, $2,000 of which is non-refundable.
Start-up costs are highly variable, depending on your location, condition of property, scale of business, and type of business.
Local approval is required in order to operate in NJ. Local approval processes vary by jurisdiction. Many cities and counties have exercised their right to ban ATCs altogether.
Medicinal Marijuana Qualifying Conditions
Under the Medicinal Marijuana Program (MMP), a physician must certify that a patient has an approved debilitating medical condition. There is a $100 fee for each patient and/or caregiver. The registration period is valid for 2 years.
Approved debilitating medical conditions include:
Amyotrophic lateral sclerosis
Inflammatory bowel disease, including Crohn’s disease
Intractable skeletal spasticity
Opioid Use Disorder
Positive status for Human Immunodeficiency Virus (HIV) and Acquired Deficiency Syndrome (AIDS)
Post-Traumatic Stress Disorder (PTSD)
Seizure disorder, including epilepsy
Terminal illness with less than 12 months to live
Opioid use disorder (requires medication-assisted therapy (MAT))
In 2008, the New Jersey Compassionate Use Medical Marijuana Act was passed. On January 18 2010,Governor Jon S. Corzine signed SB119, also known as, New Jersey Compassionate Use Medical Marijuana Act (CUMMA), which allows ill patients access to medical marijuana with a doctor's recommendation. The passage of this legislation was the culmination of five years of advocacy by Drug Policy Alliance, local organizations, patient and family advocates, and other supporters.
The New Jersey Department of Health adopted rules for the program in November 2011. The first patient registrations were accepted in August 2012, and the first Alternative Treatment Center opened in December 2012. Since then, there have been several amendments to the program, all aimed at expanding access to qualifying patients and primary caregivers.
In January 2018, Executive Order #6 outlined the intent of Governor Philip Murphy to expand and streamline the entire program; in March, additional conditions were added; and in June 2018, rule changes were proposed. In July 2018, a Request for Applications was released by the state in accordance with these updates to the State of New Jersey Department of Health Medical Marijuana Program.
On July 2, 2019 Governor Murphy signed the Jake Honig Compassionate Use Medical Cannabis Act to reform New Jersey’s Medicinal Marijuana Program (MMP) and expand patient access to medical marijuana. As of July 2019, a total of 51,000 patients, 2,000 caregivers and 1,000 doctors are participating in the program. The bill also creates New Jersey’s first Cannabis Regulatory Commission under the Department of Treasury, transferring responsibility from the Department of Health to the Cannabis Regulatory Commission. New Jersey does not allow homegrown marijuana under its current law.
According to New Jersey’s Medicinal Marijuana Biennial Report published April 2019, there are 1.5 million people per open dispensary in New Jersey, compared to the average population per dispensary in other states was around 100,000 people per dispensary. Ideally, New Jersey would have 90 medical dispensaries to serve the demand and population. This indicates a high need for additional dispensary sites in New Jersey.
The 2019 Marijuana Business Factbook projects the New Jersey Medicinal Marijuana market will reach $95 million-$120 million in sales, up from $50 million-$60 million in 2018. With a population of approximately nine million, New Jersey is estimated to generate $317 million in legal medical cannabis sales by 2022, according to Arcview Market Research.
As of 2019, the state’s 6 ATCs serve an estimated 40,000 patients.
Amount/types of licenses issued/available
The Department is no longer accepting ATC Applications as of August 2019 for dispensing, cultivation, and vertically integrated permits. The goal of the MMP is to operate up to 24 additional Alternative Treatment Centers (ATCs) with no particular time frame.
Adult use/medical/CBD only/ALL/none. Adult-use Is not legal in the state of New Jersey.
As of July 2019, a total of 51,000 patients, 2,000 caregivers and 1,000 doctors are participating in the program. The Department is no longer accepting ATC Applications as of August 2019 for dispensing, cultivation, and vertically integrated permits. May 2019, New Jersey expanded its hemp law to allow more cultivation and derivatives such as CBD to go in foods and cosmetics.
Estimated market size
Medical cannabis sales in New Jersey via dispensaries rose roughly 70% and 50% in 2016 and 2017 to hit an estimated $30 million in 2018.
how to start a marijuana business New Jersey
If you are just starting your marijuana business, the next best step is to start a Business Plan to help educate your team and be ready to apply for a marijuana business license. If you are ready to apply for a Marijuana Business License in New Jersey, please Contact us or call our offices to set an appointment to get started. You can also select another State Opportunity, or fill out our Contact Form to discuss potential strategies such as Investment or Partnership Opportunities.