A look at how cannabis license is progressing in the Garden State and what to expect next.

New Jersey voters legalized recreational marijuana in the November 2020 election. The law allows people in New Jersey over the age of 21 to purchase up to one ounce of marijuana at a time (registered medical marijuana patients may purchase and possess up to 3 ounces of cannabis every 30 days), and allows them to carry it freely. Now, a year after voters agreed to get things moving, the state is starting to give out cannabis license. That’s good news for cannabis consumers in Jersey, the law there doesn’t allow people to grow their own cannabis plants at home.

New Jersey Legal Cannabis Roadmap

As of December 15th, 2021, the Cannabis Regulatory Commission (CRC) will be looking over license applications so people can cultivate, manufacture, and test marijuana. The CRC says nearly 500 business accounts for license applications were made within the first 3 hours of applications being accepted.

“And they haven’t stopped coming in,” the CRC said on Facebook. “Exciting times for the CRC and for prospective cannabis entrepreneurs across the state.”

When things do get up and running, the state of New Jersey is expecting to see a $1 billion market. Sales of recreational marijuana will be taxed by the state at 7%, and localities have the option to include their own sales tax of 2% or less. There could also be a social equity excise fee that would apply to marijuana growers whose profits could fluctuate depending on the average retail price of the cannabis they’re growing.

Tax Dollar Breakdown

Proceeds from the social equity excise fee and from 70% of the sales tax would go to programs targeting communities affected by the War on Drugs. “Our current marijuana prohibition laws have failed every test of social justice, which is why for years I’ve strongly supported the legalization of adult-use cannabis. Maintaining a status quo that allows tens of thousands, disproportionately people of color, to be arrested in New Jersey each year for low-level drug offenses is unjust and indefensible,” said New Jersey Governor Phil Murphy in a news release. “This November, New Jerseyans voted overwhelmingly in support of creating a well-regulated adult-use cannabis market. Although this process has taken longer than anticipated, I believe it is ending in the right place and will ultimately serve as a national model.”

Medical marijuana patients have a lower tax rate, so people coming in from out of state who are registered medical cannabis patients there can apply for a temporary registration in New Jersey to take advantage of a lower tax rate, plus access to a larger amount per purchase and a guaranteed supply.

When Will Recreational Marijuana Dispensaries Open in New Jersey?

Unfortunately, the application process didn’t go particularly smoothly and timelines for opening are somewhat murky. People hoping to apply for licenses reached out to the CRC over Twitter with complaints about the systems crashing. “Did your systems crash?” asked a Twitter user named Luis Urueta. “I’ve yet to receive my verification email in order to submit.” The next day, he added to his tweet to CRC, “Still waiting.” “Unfortunately the application system is not working for everyone and tech support does not respond. Hoping day 2 of the application rollout is more equitable than day one so everyone who wants to apply can,” wrote a user named Sun Extractions on Twitter. That user describes themselves as “reliable, consistent, high quality cannabis extracts” that the poster says wishfully will be coming soon to the Garden State. “24 hrs later and still no verification email sent. Help desk is no help. NIC help desk is no help either,” wrote a user named Slim Waters. “No response from anyone.” The state could also see some problems with supply. Right now, there are only 13 dispensaries that sell medical marijuana and just 12 vertical MMJ licenses in New Jersey. Those operators can sell recreational marijuana but they still have to keep up with demand from their medical market. Some of those operators are expanding their cultivation facilities to try to keep up.

Application Abundance

The Garden State’s government is allowing extra MMJ licenses, but litigation has put approval of those on hold. Right now, there’s no limit on how many applications will be made available for cannabis businesses overall, and there’s no due date for the license applications. There is, however, a limit on cultivators. Those licenses, known as Class 1, are being held to 37 in total until February 22, 2023, when more could be added if needed. Individual municipalities can decide how many licensed businesses to allow in the town, but they cannot ban delivery services to the area or prohibit marijuana in any way if they don’t want it in their area. 30% of all licenses have to go to businesses owned by women, minorities, and disabled veterans.

When choosing who will get a license, priority is given to areas the state has deemed as having been negatively affected by the War on Drugs or by unemployment and poverty. The CRC aims to give 25% of all licenses to applicants who fall within that category, or to those who make sure 25% or more of their employees come from those areas. From there, priority falls to people who have lived in New Jersey for 5 years or longer, and who have at least 5% investment interest in something within New Jersey.

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Types of Recreational Cannabis License Available

Applications for Class V Retailers can be submitted starting March 15th, 2022. The job duties of the people who apply for each license are as follows:

• Class 1: Cultivator
  • Grow recreational use cannabis
• Class 2: Manufacturer
  • Produce recreational use cannabis
• Class 3: Wholesaler
  • Store, sell or otherwise transfer, recreational use cannabis items between cannabis cultivators, wholesalers, or retailers
• Class 4: Distributor
  • Transport cannabis items in bulk between cannabis cultivators, manufacturers, or retailers within the state of New Jersey
• Class 5: Retailer
  • Purchase recreational use cannabis from licensed cultivators, manufacturers, or wholesalers and sell those items to consumers in a retail store
• Class 6: Delivery
  • Transport a consumer’s purchases of recreational use cannabis and related supplies from the retailer to that consumer
• Conditional License
  • Begin building out operations for the cultivation, manufacture, dispensing, wholesale, distribution, or delivery of recreational use cannabis while working towards meeting the requirements for a cannabis cultivator, manufacturer, dispensary, wholesaler, distributor, or delivery license

Despite the flurry of movement following the start of the licensing process, there’s still no firm date for when recreational sales are expected to begin in the Garden State. In September, Gov. Phil Murphy told News 12 New Jersey he expected to see sales, “first or second quarter from a medical dispensary and then a little bit behind that from a standalone retail shop.” For the time being, that timeline still seems possible.