How to Become One of New Jersey’s Six New Medical Marijuana Dispensaries

New Jersey is moving forward with efforts to expand its medical marijuana program. The state is currently seeking applicants to operate six new medicinal marijuana dispensaries — two each in the northern, central and southern regions of New Jersey.

“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.”

NJ Marijuana Businesses Must Act Quickly 

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.

Applying to Become a Medical Marijuana Dispensary

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.

ATC applicants must also provide the following information for their business, as well as for each subcontractor or affiliate to the entity named in the application:

• Documentation of a valid Business Registration Certificate on file with the New Jersey Department of the Treasury, Division of Revenue and Enterprise Services;
• If an applicant is a non-profit, proof of non-profit status;
• Submission of completed ATC Entity Disclosure forms, with all supporting documentation, for each applicant, subcontractor and affiliate;
• Submission of completed Personal History Disclosure forms, with all supporting documentation, for all principals, directors, board members, owners, and managers;
• Evidence that all principals, directors, board members, owners and employees will cooperate with a criminal history record background check pursuant to N.J.A.C. 8:64-7.2, including payment of all applicable fees associated with the criminal history record background check, which shall be paid by the ATC or the individual;
• If a principal, director, board member, owner or employee has a disqualifying conviction, evidence that the individual has been rehabilitated;
• The by-laws and a list of the members of the ATC’s medical advisory board, or a proposed plan to organize a medical advisory board;
• The mailing and physical addresses of the proposed alternative treatment center and evidence of site control for all proposed locations in the form of proof of ownership or a lease;
• Written verification of the approval of the community or governing body of the municipality in which the alternative treatment center is or will be located*;
• Evidence of compliance with local codes and ordinances including, but not limited to, the distance to the closest school, church, temple or other places used exclusively for religious worship or a playground, park or child day care facility from the alternative treatment center;
• A legible map or maps of the service areas by zip code to be served by the alternative treatment center showing the location of the alternative treatment center; and
• Text and graphic materials showing the proposed exterior appearance of the ATC and its site compatibility with commercial structures already constructed or under construction within the immediate neighborhood.

Scoring Medical Marijuana Dispensary Applications 

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.

• Past business experience of applicants (100 pts)
• Business operations and compliance (125 pts)
• Security (100 pts)
• Cultivation, manufacturing, and dispensary operations (300 pts)
• Financing (100 pts)
• Value and Affordability for Patients (50 pts)
• Market Diversification (25 pts)

Community Support and Participation

• Community support and participation (50 pts)
• Corporate responsibility (50 pts)
• Diversity (50 pts)

Ability to provide appropriate research data

• Commitment to Clinical Research (50 pts) 

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 in NJ Cannabis Industry

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.