The Garden State is Going Green: Recreational Cannabis on the Horizon for New Jersey
Updated: May 26, 2019
New Jersey may not have the nation’s largest medical marijuana market, but the budding medical cannabis program has experienced a significant spike in growth within the last year, making the potential and possibilities noteworthy. With the accelerated progress of the current medical program, it’s no wonder New Jersey is at the forefront of cannabis conversations, not to mention the speculation of legalizing recreational cannabis.
New Jersey legalized medical marijuana in 2010, known as the Compassionate Use of Medical Marijuana Act (CUMMA), which provided access to medical cannabis for patients with qualifying medical conditions from six state licensed, non-profit dispensaries (alternative treatment centers). Since Gov. Phil Murphy took office in January, the medical marijuana program in New Jersey has experienced a significant expansion. With the addition of 5 qualifying conditions, the number of registered medical marijuana patients has grown by 10,000, for a total of 25,000 patients and 1,000 caregivers with an average growth rate of 500 new patients per week.
The increase in patients resulted in a medical cannabis supply crisis, causing significant strain on existing dispensaries. Gov. Murphy initiated the expansion of the medical marijuana program with the addition of six dispensaries. A telltale sign of the robust interest in New Jersey’s expanding medical marijuana program is the number of applications submitted competing for one of six new retail dispensaries that would provide medical cannabis to more than 30,000 patients. The New Jersey Department of Health is reviewing 146 applications for two licenses each in North, Central and South Jersey.
The six new medical marijuana providers would follow suit of the existing six by being a vertically integrated operation, meaning they grow, process and sell cannabis and cannabis products, and would likely be operational by spring of 2019 at the earliest.
There are other reasons existing cannabis organizations and entrepreneurs have their heart set on New Jersey. The state is home to several pharmaceutical and biotech companies, as well as many medical research facilities, all of which make it a prime location for the advancement of medical cannabis.
Many cannabis industry experts predict the state will allow for additional cannabis business licenses for cultivation, product manufacturing and dispensing, rather than the current type of license for a vertically integrated business model.
Recreational Cannabis on the Horizon for New Jersey
For the past year, there has been a lot of speculation that New Jersey is on the cusp of legalizing recreational cannabis. New Jersey state legislators have proposed the latest bill that would legalize recreational cannabis and lay the foundation for a commercial cannabis business industry. The bill would legalize the possession and personal use of small amounts of cannabis for persons 21 years of age and older, and propose a 10% cannabis tax, which would tie Nevada for the lowest tax in the country. Additionally, the bill would allow dispensaries to apply for a “consumption space,” which would allow a space separate from the dispensary for legal consumption and legalize the delivery of cannabis and cannabis products.
The bill proposes no limit on the number of cannabis licenses issued, although it does require that 25% of licenses go to cannabis businesses that are owned by women, minorities or veterans, and 10% to microbusinesses. The proposed bill may be found here. The bill has not been officially introduced to the New Jersey legislature, so major revisions and changes to the bill is possible.
Available Cannabis Business License Types
If recreational cannabis is legalized in New Jersey, the types of commercial cannabis business license as outlined in the proposed bill may be:
Cultivation: license to grow cannabis, process and package cannabis and sell to other cannabis establishments, but not to consumers.
Production: license to purchase, process, manufacture and package cannabis and cannabis-products and sell to dispensaries, and wholesalers, but not to consumers.
Wholesale: License to purchase cannabis, cannabis products and/or cannabis paraphernalia for the purpose of resale either to a licensed cannabis wholesaler or to a licensed cannabis retailer, but not to consumers.
Dispensary: license to purchase cannabis and cannabis products from cultivators, product manufacturing facilities and wholesalers to sell to consumers.
Microbusiness: a cannabis cultivator, processor, wholesaler or retailer that operates on a smaller scale with limitations to the square footage of cultivation are and the amount of cannabis and cannabis products that may be purchased or processed over the course of one month.
Independent Testing: license to analyze and certify the safety and potency of cannabis products.
Transportation: license to transport cannabis through and within the State of New Jersey to consumers and to maintain a warehouse.
In comparison to the Garden State, New York, and Pennsylvania have limited medical marijuana programs. If New Jersey legalizes recreational cannabis, it may see a massive influx of customers flooding the state from its neighboring states to purchase legal cannabis.
Start Your Cannabis Business Today
Although the application window is closed, there are steps you can take right now to be prepared for when the state re-opens the program for licensing, or recreational cannabis is legalized. Starting early, being well-capitalized, and getting guidance from those who have been successful and compliant operators is the key to putting yourself in the best competitive position to secure a license. Entrepreneurs and organizations that act now will be best positioned to carve out a slice of the newly expanding cannabis market.
At The J. Whitney Group, we are experienced cannabis consultants providing business solutions to meet all your needs. If you are looking to break into the New Jersey cannabis industry, and need application assistance or operational guidance, The J. Whitney Group is here to ensure you succeed. Contact us today to request a free consultation.