
Daniel T. McKillop
Partner
201-896-7115 dmckillop@sh-law.comFirm Insights
Author: Daniel T. McKillop
Date: July 17, 2018
Partner
201-896-7115 dmckillop@sh-law.com“We look forward to the opening of six new dispensaries so we can ensure that all qualifying patients who want access to medicinal marijuana can have it,’’ Gov. Phil Murphy said in a statement. “We have seen the addition of 10,000 new patients. Accordingly, we have to expand the number of businesses who are growing product and serving patients.”
The state’s decision to double the number of alternative treatment centers (ATCs) represents a significant opportunity for businesses seeking to enter New Jersey’s legal marijuana industry. To capitalize, applicants must be well-prepared to act quickly. The Department of Public Health (Department) will make applications available on August 1 via its website.
A mandatory pre-application conference is scheduled for August 9 at the Department of Health headquarters in Trenton. Any entity interested in submitting an application in response to the RFA is required to attend. According to the Department, the purpose of the conference is to give potential applicants a chance to have questions answered about the process. The agency will electronically accept questions until 4 p.m. on August 7 from all potential applicants via email at mmpquestions@doh.nj.gov.
Completed applications, along with all supporting documents, must be submitted by August 31. Applicants chosen to proceed in the permitting process will be announced November 1, 2018.
While applicants may submit applications for more than one region, they must submit a separate application for each region. The fee for applying is $20,000, although $18,000 of that fee will be returned to unsuccessful applicants.
Existing ATCs, including affiliates, can’t participate in the Request for Applications (RFA). In addition, individuals and entities with a 25 percent stake (in the form of debt, equity, or other financial relationship) in any of the currently permitted ATCs, or entities responsible for the management of currently permitted ATCs are also ineligible to apply.
While the Department has not yet published the application, businesses seeking to apply to become an ATC should act now. To get started, the RFA details the mandatory documentation that each applicant will be required to provide, including the legal name of the corporation, a copy of the articles of incorporation and by-laws, evidence that the corporation is in good standing with the New Jersey Department of the Treasury, and a certificate certified under the seal of the New Jersey State Treasurer as to the legal status of the business entity.
The Department uses a specific methodology when evaluating ATC applications under which certain criteria are weighted on a 1000-point scale. Pursuant to N.J.A.C. 8.64-6.2, the criteria falls within several broad categories:
Ability to meet overall health and safety needs of qualified patients and safety of the public.
Community Support and Participation
Ability to provide appropriate research data
As highlighted above, ATC applicants must show that they are prepared to handle all aspects of the cannabis industry, with cultivation, manufacturing, and dispensary operations accounting for 300 points. The ability to demonstrate prior business experience and compliance is also important. (225 points total).
Additional opportunities to participate in New Jersey’s medical cannabis industry are also forthcoming. According to the Department, it anticipates the release of two additional Requests for Applications in the fall of 2018 and winter of 2019. The first will be for additional cultivators and manufacturers, and the second for additional dispensary locations.
For entities that are interested in entering the New Jersey cannabis industry, there are numerous legal, logistical and operational issues that must be addressed. Prospective ATC applicants should contact a knowledgeable attorney to discuss this process in greater detail.
Disclaimer: Possession, use, distribution, and/or sale of cannabis is a Federal crime and is subject to related Federal policy. Legal advice provided by Scarinci Hollenbeck, LLC is designed to counsel clients regarding the validity, scope, meaning, and application of existing and/or proposed cannabis law. Scarinci Hollenbeck, LLC will not provide assistance in circumventing Federal or state cannabis law or policy, and advice provided by our office should not be construed as such.
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