
Daniel T. McKillop
Partner
201-896-7115 dmckillop@sh-law.comFirm Insights
Author: Daniel T. McKillop
Date: September 9, 2021
Partner
201-896-7115 dmckillop@sh-law.comOn August 20, 2021, the New Jersey Cannabis Regulatory Commission (CRC or Commission) released its much-anticipated initial rules, which will govern the cultivation, manufacture, and sale of recreational cannabis in the state. The rules became effective upon filing with the Office of Administrative Law and will be in effect for up to one year.
“We were ambitious with our timeline to make personal-use cannabis available, and I am pleased the Commission was able to create these regulations in record time,” Governor Phil Murphy said in a press statement. “The regulations adopted today reflect the CRC’s commitment to transparency and social equity. Prioritizing applications from women and minority entrepreneurs, from business owners living in economically disadvantaged communities, and from small business owners will ensure the market grows the way we envisioned—in a way that is socially equitable and reflective of our state’s diversity.”
As discussed in prior articles, the New Jersey Cannabis Regulatory, Enforcement Assistance, and Marketplace Modernization Act (Act) tasks the CRC with promulgating regulations to govern the medical and adult-use industries. The CRC is also responsible for licensing cannabis businesses.
The CRC’s initial rules span more than 160 pages and, therefore, can’t be adequately summarized in this brief article. Therefore, we encourage businesses interested in entering the New Jersey adult-use market to thoroughly review them with experienced counsel. Below are some key highlights to get started:
The CRC has also published a Fee Schedule, which lists the fees for applications, certifications, and licenses. The application submission fees are intentionally low, with the cost of applying for a standard license set at $400. Microbusinesses are eligible for a lesser fee of $200. The fees for businesses applying for a conditional license are $200 for a standard business and $100 for a microbusiness. For existing ATCs seeking to expand to recreational cannabis, the fee for a Medical Cannabis Cultivator Expansion is $400,000, the fee for a Medical Cannabis Manufacturer Expansion is $300,000, and the fee for a Medical Cannabis Dispensary Expansion is $100,000.
Cultivator licensing fees are dependent upon the mature cannabis plant grow canopy area and start at $5,000. The Manufacturer Licensing Fee is $20,000 for premises of up to 10,000 square feet and $30,000 for more than 10,000 square feet. Retail licensees must pay $10,000, while testing laboratories must pay $4,000. For microbusinesses, the license fee for a cultivator, manufacturer, or retail license is $1,000.
While the initial rules are an important first step, the CRC still has a lot of work to do. It must still promulgate rules for delivery, distribution and wholesaling, which were not addressed in the initial rules. It must also release applications for all of the licenses categories.
The Act provides that within 30 days of the rules and regulations being adopted, or September 21, 2021, the CRC must begin processing licensing applications. The legalization statute also establishes timelines for approving licenses. The CRC must make decisions on conditional licenses by October 21, 2021. Decisions on other licenses must be made by December 20, 2021. Finally, adult-use sales must begin within six months of the CRC adopting rules and regulations, making February 22, 2022 the latest date sales can begin.
If you have any questions or if you would like to discuss the matter further, please contact Dan McKillop, or the Scarinci Hollenbeck attorney with whom you work, at 201-896-4100.
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:
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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