How to Open a Dispensary in New Jersey

How to Open a dispensary in NJ

How to open a dispensary license in New JerseyThe best way to open a cannabis dispensary in New Jersey is to build a team around talents necessary to execute your business plan.  You need a social equity, or high application priority for your dispensary conditional application.  Next, you need to apply for your conditional license with about 40 pages of written materials.  After you get your conditional license, you have at least 120 days to get your location, your zoning, your capital and your municipal approval or preference.  After that, you are ready to get your conversion application on file, which is at least another 100 pages of materials.  The whole process can take over a year and cost tens of thousands of dollars in consultant, and professional fees.  Then, building your dispensary may be at least another million dollars because a security system that is compliant with NJ cannabis regulations will cost over $100,000. 

If you want to get a dispensary license in New Jersey? If you want to open a dispensary in New Jersey, you require a Class 5 Cannabis Retail license. The cannabis regulatory commission (CRC) issues the licenses. To obtain the retail license faster, you need high priority for your application.

New Jersey is currently accepting cannabis dispensary applications.

 

A priority 1 is a social equity applicant seeking a conditional license. New Jersey is currently accepting applications for retail stores, cannabis grows and processors. The licensing fees and applications fees charged by the new jersey cannabis regulatory commission do not make the cost to open a dispensary out of reach for most entrepreneurs.

We explain how to open a dispensary in NJ in this blog post. We have won them for clients and can help your team get licensed as well. 

RELATED POST: OUR NEW JERSEY CONDITIONAL LICENSE APPLICATION 

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.

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.

How to open a dispensary in NJ

Opening a dispensary in New Jersey is very possible for entrepreneurs that want to get into the cannabis industry.  New Jersey created a dual licensing structure where both the state and the city must approve an application to open a dispensary. New Jersey has an ongoing application period for any business that wants to apply for what they have called a ‘Class 5 Cannabis Retail License’ in NJ. The law provides for smaller micro-business dispensaries that have certain ownership and size restrictions and regular dispensaries.  The CRC wants applicants to get a conditional license first.  The conditional license from the CRC allows a cannabis team to find their real estate, their financial backers, and the municipality that wants them to open for business. The whole process may take up to a year and requires a complete application of over 100 pages. For more help, call us.

Medical marijuana dispensary licenses in New Jersey

Alternative treatment centers in New Jersey established the cannabis industry with very high costs of entry because of the completely vertically integrated licenses required under New Jersey’s medical cannabis program.  The adult use cannabis regulations in New Jersey sought to reduce the cost to enter the recreational cannabis industry so that more social equity applicants could open their own dispensaries. As a result, the CRC prioritized microbusiness licenses for dispensaries.

RELATED POST: HOW TO OPEN A CANNABIS MICROBUSINESS IN NEW JERSEY

RELATED POST: HOW TO GET A CANNABIS BUSINESS LICENSE IN NEW JERSEY

How to get a Medical Marijuana dispensary license in New Jersey

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 can 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.

Get funding for your NJ cannabis dispensary

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.

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. We do not want you to have to pay rent for months while government officials review your application.

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

How to get a dispensary license in New JerseyIn 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 has no maximum number of licenses. At least 35% shall be conditional license. Plus, 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:

  • Be at least 21 & substantially related to NJ. Have at least one significantly involved person that resided in NJ for at least two years as of the date of application. 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.
  • Get local approval. 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.
  • Ensure everyone is eligible by background check. 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 must have a valid certification issued by the commission.  operate a vehicle medicinal marijuana medical marijuana patients medical patient patients only reach of children recreational cannabis phone number online order medical marijuana program cannabis products

What does a NJ cannabis dispensary application include?

  • Business and Financial Plan
  • Operating Plan Summary
  • Business Experience
  • Environmental Impact Plan
  • Safety and Security Plan
  • Community Impact, Social Responsibility and Research Statement
  • Workforce Development and Job Creation Plan
  • Standard Operating Procedures (“SOPs”) for Adverse Event Reporting
  • SOPs for Quality Assurance/Control
  • SOPs for Recall
  • SOPs for Packaging and Labeling
  • SOPs for Inventory Control, Storage, Diversion Prevention
  • SOPs for Recordkeeping
  • SOPs for Waste Disposal, Sanitation
  • SOPs for Cultivation
  • SOPs for Manufacturing
  • SOPs for Dispensing
  • SOPs for Delivery
  • SOPs for Accounting and Tax Compliance
  • SOPs for Age Verification
  • SOPs for Secure Transport of Cannabis
  • SOPs for Reporting of Test Results for Cannabis
  • In-State Collective Bargaining Agreement
  • Out-of-State Collective Bargaining Agreement
  • Project Labor Agreement for Facilities
  • Project Labor Agreement for Associated Projects
  • Documentation confirming that at least one owner has lawfully resided in New Jersey for at least five years as of the date of the application

How is your NJ Dispensary application scored?

The CRC reviews each application for a dispensary license and scores it based upon a point scale for completeness. The criteria for consideration in the point scale takes into account, among other things:

  • The applicant’s operating, environmental, and safety and security plan.
  • Whether the applicant resides in an “impact zone” defined as 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”, or someone who holds at least 5% investment interest, or is a member of a group who holds at least 20% investment interest and has 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). They count from the date of the submission of the application unless the commission determined the review needs more time. A dispensary license gets issued by the commission at least 30 days after 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. We recommend consulting an attorney for help with your NJ cannabis dispensary application.

If you are not sure how to make your application complete, you can call us. We have won NJ dispensary licenses before for our clients.

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.

tom

tom

Licensed to practice since 2008, Thomas Howard has represented numerous financial institutions in litigation to enforce their security interests.
Homegrown Cannabis Co's Cannabis Seeds
tom

tom

Licensed to practice since 2008, Thomas Howard has represented numerous financial institutions in litigation to enforce their security interests.

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