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Own a Cannabis Wholesale Business in New Jersey

 

New Jersey Cannabis Wholesaler LicenseNew Jersey Cannabis Wholesaler License

Entrepreneurs have now set their eyes on the Garden State, now that last month Gov. Phil Murphy signed the New Jersey Cannabis Regulatory, Enforcement Assistance, and Marketplace Modernization Act (NJ CREAMMA) into law. 

The New Jersey Cannabis Regulatory Commission’s (CRC) decision to exclusively accept certain marijuana licenses from social equity applicants on September 27, 2023.

Under the new rules, Social Equity applicants will be given priority and exclusive access to licenses for Wholesaler, Distributor, and Delivery service class licenses.

The window to start applying for a license in New Jersey is getting closer, so now it’s the perfect time to start preparing for the endeavor. Take into consideration that the licensing application can be tricky and confusing, that’s why you should always contact a professional to help you with your application.

What is a New Jersey Cannabis Wholesaler License

A Class 3 Cannabis Wholesaler License is a legal document that allows its owner to purchase or otherwise obtain, store, sell, or otherwise transfer, and transport, cannabis items from a cultivator or other cannabis businesses for the purpose of resale or other transfer to either another cannabis wholesaler or to a cannabis retailer, but not to consumers.

A cannabis wholesaler shall have a Class 3 Cannabis Wholesaler license issued by the Cannabis Regulatory Commission (CRC) for the premises at which cannabis items are warehoused. 

The commission shall determine the maximum number of licenses, of which at least 35 percent shall be conditional licenses and at least 10 percent of the total number of licenses and conditional licenses shall be designated for and only issued to microbusinesses. Providing there exist qualified applicants, the commission shall issue a sufficient number of licenses to meet the market demands of the State.

How to Apply for New Jersey Cannabis Wholesaler License 

In order to apply for a Class 3 Cannabis Wholesaler License, the applicant must:

  • Be a qualified Social Equity applicant; Social Equity, Diversely Owned Businesses, and Impact Zone Businesses.
  • Have at least one significantly involved person who has resided in this State for at least two years as of the date of the application, and provide proof that this person and any other person with financial interest who also has decision-making authority for the cannabis wholesaler listed on an application submitted under the legislation is 21 years of age or older;
  • Meet the requirements of any rule or regulation adopted by the CRC;
  • Provide for each of the following persons to undergo a criminal history record background check: any owner, other than an owner who holds less than a five percent investment interest in the cannabis wholesaler or who is a member of a group that holds less than a 20 percent investment interest in the cannabis wholesaler 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 wholesaler’s operations; any director; any officer; and any employee.

According to the legislation, the CRC has to adopt rules and regulations that: 

  • Provide for the annual renewal of the Class 3 Cannabis Wholesaler license;
  • Establish application, licensure, and renewal of licensure fees for cannabis wholesalers; and cannabis cultivators;
  • Require a cannabis wholesaler to meet any public health and safety standards, industry best practices, and all applicable regulations established by the commission

In relation to the fee schedule, the legislation requires that they comply with the following: 

  • They shall be in the form of a schedule that imposes a greater fee for premises with more square footage; and
  • Shall be deposited in the “Cannabis Regulatory, Enforcement Assistance, and Marketplace Modernization Fund”

A person who has been issued a license or conditional license shall display the license or conditional license at the premises at all times when cannabis items are being warehoused.

Complete Application Process:

Once the application phase is done, CRC will review all the applications sent for the whole year starting Sept 27, 2023. They will reject all of the applicants who fail to prove their eligibility. Also, the CRC has established a definitive measure for each type of cannabis license, with each criterion corresponding to a maximum number of points that can be earned on an application. For a conditional license application, the mandatory scored measures include:

  • Business Plan and Management Profile (40 points)
  • Regulatory Compliance Plan (50 points)
  • Liability Insurance Plan (10 points)

These documents can be very hard to draft without the proper knowledge and experience in doing it.  The measures laid out by the New Jersey Cannabis Regulatory Commission (CRC) will not only help you secure financing and demonstrate to the authorities that your operations plan meets their legal requirements, but they will also serve as the foundation for all other subsequent measures, including workforce development, community impact, tech stack, standard operating procedures, and other requirements for converting to an annual cannabis license in New Jersey. We’re sure that no one wants to spend time and money for a denied application. Contact the Cannabis Industry Lawyer and our team of experts because we’ve won multiple licenses in New Jersey.

Annual License Conversion Requirements:

The business and financial plan for annual license applications must include the following:

  • A brief overview of the applicant’s solid business plan.
  • Evidence/Proof of the applicant’s financial ability to implement their business plan.
  • A description of the applicant’s plan to comply with FinCEN guidance on cannabis, which is issued under 31 U.S.C. § 5311 et seq., also known as the “Bank Secrecy Act”.
  • Check and verify whether any of the applicant’s majority or controlling owners have previously been approved by the Cannabis Regulatory Commission (CRC) to serve as an officer, director, principal, or key employee of an alternative treatment center or personal use cannabis establishment, distributor, or delivery service.

The operating plan summary for Class 3 Wholesalers license in New Jersey must include a written description of the applicant’s qualifications, experience, and knowledge in the following areas:

  • Quality control and quality assurance
  • Recall plans
  • Inventory control and tracking software or systems
  • Odor mitigation practices
  • Onsite and offsite recordkeeping
  • Waste disposal plans
  • Compliance with applicable laws and regulations

The summary should be comprehensive and very detailed and should be written in a clear and concise manner to get their approval.

New Jersey Cannabis Wholesaler License Restrictions

For a period of 24 months after the effective date of the legislation it is unlawful for any owner, part owner, stockholder, officer, or director of any corporation, or any other person engaged in any retailing of any cannabis items to engage in the wholesaling of any cannabis items, or to own either whole or in part, or to be a shareholder, officer or director of a corporation or association, directly or indirectly, interested in any commercial cannabis or medical cannabis manufacturer.

This basically means that, if you own a cannabis dispensary in New Jersey, you won’t be able to have a controlling interest in any cannabis wholesaling operation. 

During the first 24 months, the holder of a Class 3 Cannabis Wholesaler License won’t be able to hold a license over a Class 2 Cannabis Manufacturer. However. the holder of a Class 3 Cannabis Wholesaler license to operate as a cannabis wholesaler may hold one other Class 4 Cannabis Distributor license to operate as a cannabis distributor.

A licensed wholesaler in New Jersey is authorized to concurrently hold a Class 4 Cannabis Distributor license. In no case may a holder of a Class 3 Cannabis Wholesaler license concurrently hold a license of any other class of cannabis establishment or concurrently hold a license as a cannabis delivery service.

If you need more information about the licensing process, it is recommended that you contact an expert in the field so that you can get the necessary guidance in your endeavor.

Picture of Thomas Howard

Thomas Howard

A seasoned commercial lawyer and the Managing Director of Collateral Base. With over 15 years of experience, Tom specializes in the cannabis industry, helping businesses navigate complex regulations, secure licenses, and obtain capital. He has successfully assisted clients in multiple states and is a Certified Ganjier. Tom also runs the popular YouTube channel "Cannabis Legalization News," providing insights and updates on cannabis laws and industry trends.
Picture of Thomas Howard

Thomas Howard

A seasoned commercial lawyer and the Managing Director of Collateral Base. With over 15 years of experience, Tom specializes in the cannabis industry, helping businesses navigate complex regulations, secure licenses, and obtain capital. He has successfully assisted clients in multiple states and is a Certified Ganjier. Tom also runs the popular YouTube channel "Cannabis Legalization News," providing insights and updates on cannabis laws and industry trends.

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