Apply for a Marijuana Dispensary License for Recreational Use in New Jersey

NJ Businesses May Not Yet Apply For a Recreational Use Marijuana Dispensary License, However, It Is Not Too Soon To Prepare For the Process

New Jersey businesses may not yet apply for a recreational use marijuana dispensary license. However, it is not too soon to start preparing for the process.

Sen. Nicolas Scutari’s proposed legislation (Senate Bill 830) would legalize the possession and personal use of small amounts of cannabis for individuals age 21 and over. While it may still undergo changes before being signed into law by Gov. Phil Murphy, the basic regulatory structure set forth in the law is most likely to form the basis for New Jersey’s recreational use cannabis program.

Proposed NJ Recreational Use Cannabis Licensing Structure 

Sen. Scutari’s proposed bill establishes the Division of Marijuana Enforcement within the state Department of Law and Public Safety, which would be tasked with adopting rules and regulations to implement the bill. It also establishes several different classes of cannabis licenses.

Below is a brief summary:

• A cannabis producer must have a Class 1 Cannabis Cultivation Facility license issued by the division for the premises at which the cannabis is produced.
• A cannabis processor must have a Class 1 Cannabis Product Manufacturing Facility license issued by the division for the premises at which the cannabis is processed.
• A cannabis wholesaler must have a Class 2 Cannabis Wholesaler license issued by the division for the premises at which the cannabis is warehoused.
• A cannabis retailer must have a Class 3 Cannabis Retailer license issued by the division for the premises at which the cannabis is retailed.
• A cannabis transporter must have a Class 4 Cannabis Transportation license issued by the division.

Requirements for Obtaining a New Jersey Marijuana Retailer License

Under SB 830, a “marijuana retailer” means an entity licensed to purchase marijuana from marijuana cultivation facilities and marijuana items from marijuana product manufacturing facilities or marijuana wholesalers and to sell marijuana and marijuana products to consumers. All such entities must hold a Class 3 Marijuana Retailer license.

Under the bill, each application for an annual license to operate a marijuana establishment would be submitted to the division. A separate license would be required for each location at which a business seeks to operate. 

To obtain a retailer license, applicants must provide prove that they have been a New Jersey resident for two or more years, and are 21 years of age or older. They must also

undergo a criminal history record background check, and submit to being fingerprinted. Applicants will bear the cost for the criminal history record background check, including all costs of administering and processing the check.

The Director of the Division of Marijuana Enforcement may not approve an applicant for a Class 3 Marijuana Retailer license if the criminal history record background information of the applicant reveals any disqualifying conviction.  If the applicant is disqualified because, the division will provide written notice that identifies the conviction that constitutes the basis for the disqualification.

To obtain a Marijuana Retailer license, applicants must also comply with any regulations promulgated by the Division of Marijuana Enforcement. While these rules have yet to be drafted, SB 830 directs that they must: 

• Require a marijuana retailer to annually renew a license issued under this section; 
• Establish application, licensure, and renewal of licensure fees for marijuana retailers; 
• Require marijuana sold by marijuana retailer to be tested in accordance with the law;
• Require marijuana retailers to submit, at the time of applying for or renewing a license, a report describing the applicant’s or licensee’s electrical and water usage; and 
• Require a marijuana retailer to meet any public health and safety standards, industry best practices, and all applicable regulations established by the division by rule related to the sale of marijuana.

Under the proposed bill, the director must approve or deny an application within 60 days after receipt of a completed application. The denial of an application would be considered a final agency decision, subject to review by the Appellate Division of the Superior Court.  The director may also suspend or revoke a Marijuana Retailer license for cause, which would also be subject to review by the Appellate Division of the Superior Court.

Once an entity has been issued a license, it must be displayed at the premises at all times when marijuana is being warehoused. The bill further provides that a licensee must report any change in information to the director not later than 10 days after such change, or the license will be deemed null and void.

What’s Next?

In additional to SB 830, several other cannabis-related bills were recently introduced in the New Jersey Legislature. At this point, Sen. Scutari’s bill seems to have the most support.

We will continue to track its progress and post updates as they occur. For entities that are interested in entering the New Jersey cannabis industry, there are numerous legal, logistical and operational issues that must be addressed, and it is never too early to start your preparations.

This article is a part of a series pertaining to cannabis legalization in New Jersey and the United States at large. Prior articles in this series are below:

• AG Sessions Targets Cannabis Industry by Rescinding Cole Memo
• Business of Cannabis in New Jersey – 2017 In Review
• New Jersey Must Consider Marijuana Reclassification

If you have any questions or if you would like to discuss the matter further, please contact me, Dan McKillop, at 201-806-3364.

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.