Operating in NJ
The state of New Jersey voted to legalize adult-use cannabis in 2020. The Cannabis Regulatory Commission (CRC) is up and running, so it’s a great time to dive in and open a cannabis dispensary.
Like most states, in New Jersey, opening any kind of cannabis business requires serious planning and forethought. There are quite a few steps that have to be taken to complete the process, from getting to know the new laws to securing funding.
The process of opening a dispensary can vary depending on whether you open a medical or adult-use dispensary. Medical dispensaries can require a few additional steps because New Jersey considers these dispensaries Alternative Treatment Centers (ATCs). Detailed information about opening an ATC and applying for the necessary licensing can be found in the Division of Medical Marijuana Request for Applications manual published by the NJ Department of Health (NJDOH).
The CRC published a 160-page report of rules and regulations that covers how to open an adult-use dispensary in NJ. This is a great place to start if you’re serious about getting into the business. Compared to medical dispensaries, it can be somewhat easier to open an adult-use dispensary. Both processes require a lot of planning, many steps along the way, as well as adequate funding.
The CRC began accepting applications on March 15th, 2022. NJ has not set limits on how many applications it will accept or approve for recreational dispensary licenses, but it’s a possibility in the future.
1. Familiarize yourself with New Jersey state and local cannabis laws
When planning to open a dispensary in NJ, you should first take the time to read through the laws set by either the CRC and/or the NJDOH. Find out about the local ordinances in the area in which you wish to operate. Localities have the opportunity to “opt-out” of recreational cannabis, at least 400 have already done so.
NJ has a well-established cannabis program, so there are many regulations, and prohibitions in place that outline things like:
- Where a dispensary can be located
- Who can be approved for a cannabis business license
- What type of technology the business must have in place, such as inventory tracking system
- How the dispensary should be managed
- How you can legally market your dispensary
- What types of products are allowed as inventory
NJ prioritizes businesses in zones unfairly impacted by prior cannabis laws. It has rules in place to prioritize businesses that are diversely owned. Additionally, cannabis businesses are required to provide educational materials to customers, connect with local communities, and control odors at their business.
2. Create an in-depth business plan for your NJ dispensary
When you apply for your license, one requirement is a detailed business plan for your dispensary. Make sure your plan supplies information on:
- The physical location of the business
- How the business will be funded
- An inventory fulfillment plan
- Potential revenue of the business
- Marketing plans
- How you will staff the business
- Diversity and equity objectives
3. Secure funding for the business
Opening a cannabis dispensary in NJ can be costly. As traditional funding from public institutions may not be an option, you will need a plan for funding the business. Personal loan options, venture capital options, or even capital brokers may be needed to find the funds you need. In order to complete your application to obtain a cannabis business license, the CRC requires proof of funding.
4. How to submit your cannabis license application
There are six types of licenses to choose from available through the CRC. Generally, dispensary owners will require a cannabis retailer and possibly a cannabis delivery license. At least one owner of the intended business must have been a resident of NJ for at least two years. Other requirements include:
- Business and business funding plan
- Background check verification
- Prior year’s tax returns
- Personal history disclosures and entity disclosure forms
- Application fee payment
- Social Equity Business attestation (if applying for points for being a socially Equitable Business)
When the application is approved, you will then be responsible for paying the approval fee of $800 as well as the licensing fees, which are covered more in-depth below.
How Much Does it Cost to Operate a Dispensary in NJ?
The cost of opening a dispensary in New Jersey will likely be between $250,000 to $2,000,000. The cost varies because of cost factors, such as the type of license you acquire and location of your dispensary. Opening a micro business dispensary typically costs less.
Application & Certification Fees For NJ Cannabis Businesses
Application Submission Fee
Conditional License Applicant:
Standard Business $200, Microbusiness $100
Annual License Applicant:
Standard Business $400, Microbusiness $200
Approval Fee
Conditional License Applicant:
Standard Business $800, Microbusiness $400
Annual License Applicant:
Standard Business $1,600, Microbusiness $800
Conditional Conversion Submission Fee
Conditional License Applicant:
Standard Business $200, Microbusiness $100
Annual License Applicant:
Standard Business N/A, Microbusiness N/A
Conditional Conversion Approval Fee
Conditional License Applicant:
Standard Business $800, Microbusiness $400
Annual License Applicant:
Standard Business N/A, Microbusiness N/A
Testing Laboratory Application Submission Fee
All applicants $400
Testing Laboratory Approval Fee
All applicants $1,600
Expanded ATC Certification Fee
Medical Cannabis Cultivator Expansion $400,000
Medical Cannabis Manufacturer Expansion $300,000
Medical Cannabis Dispensary Expansion $100,000
Vertically Integrated ATC with 1 dispensary $800,000
Vertically Integrated ATC with 2 dispensaries $900,000
Vertically Integrated ATC with 3 dispensaries $1,000,000
