New Jersey Announces New Cannabis Social Equity Funding Program

The New Jersey Economic Development Authority (NJEDA) last week announced the creation of a grant program to help small businesses with the costs associated with starting a business in the state’s regulated cannabis industry. The new initiative, known as the Cannabis Equity Grant Program, will distribute up to $10 million in grants, with the majority earmarked for social justice applicants.

The new scholarship program was unanimously approved by the NJEDA Board of Directors at its monthly meeting last week. In a statement, New Jersey Gov. Phil Murphy said the grants will help level the playing field for entrepreneurs from underserved communities to participate in the recreational marijuana new economy that emerged after the passage of a statewide referendum in was legalized in 2020.

“My administration is redoubling efforts to cultivate small businesses in emerging industries with massive untapped potential,” Murphy said. “Establishing the Cannabis Equity Grant Program will help aspiring small business owners meet the cost of starting up in a critical sector of our state’s ever-growing economy. Most importantly, the program will remove significant barriers to entry for communities of color, which this program will help equip them with the resources they need to not just enter, but thrive, in this exciting new industry.”

The program approves up to $10 million in small business grants, including $6 million reserved for cannabis social equality applicants such as: The pilot grant program was approved by legislation sponsored by Senate President Nicholas Scutari and Assembly Budget Committee Chair Eliana Pintor Marin, and signed by Murphy in June.

“This program can have a positive impact by supporting diversity in the New Jersey cannabis industry during its infancy,” Scutari said in a statement. “As the market continues its successful growth, these grants will help provide more opportunities for a larger number of operators in a larger number of communities to participate.”

$6 million for social justice applicants

Up to $6 million in grants will be awarded to companies that have received conditional operating licenses from the state’s Cannabis Regulatory Commission (CRC) that are located in economically disadvantaged areas and plan to hire 50 or fewer employees. The grants of up to $250,000 may be used by companies incorporated in designated zones of impact after March 2020 to cover the start-up costs of establishing a licensed cannabis business, including rent, utilities, wages and regulatory fees.

“The Governor and Legislature have made a commitment that the cannabis market will be accessible to women and minority entrepreneurs,” said Rep. Verlina Reynolds-Jackson. “The cannabis market is supposed to be a boon for equity, but we find that for some people the cost of entry is too high. We hope that this scholarship program will help level the playing field. We want to ensure that those most affected by the War on Drugs and our underserved communities have an opportunity to be a part of the process.”

Impact zones are defined by the CRC as areas with ZIP codes that meet certain socioeconomic criteria, including poverty and unemployment rates, and that have been heavily impacted by arrests for marijuana crimes. Entrepreneurs who are awarded the grants also take part in technical assistance and business training courses offered by the NJEDA. Companies located in Impact Zones applying for grants may waive the $1,000 application fee.

“Part of the impetus for passing legislation to legalize it was the recognition that cannabis prohibition for decades has disproportionately and negatively impacted young people in Black and Hispanic communities,” said Senator Nellie Pou. “As Chair of the Legislative Latino Caucus, I am pleased that NJEDA is launching this Cannabis Equity Grant Program to help fund the start-up costs of new businesses in the very communities that have been so adversely affected. This is another important part of the Social Justice Treaty that remains at the heart of cannabis legalization in New Jersey.”

The remaining $4 million in grants will be made available to all business units that have secured a site for the company and received municipal approval. Both are requirements that must be met in order to apply for an annual license from the CRC. The application window for the scholarships will be open 180 days after the start of the program, according to state officials.

“We recognize the importance of empowering cannabis companies, many of which have historically faced barriers to accessing finance capital,” said Tai Cooper, NJEDA’s Chief Community Development Officer. “Communities that have unjustly suffered from the criminalization of cannabis need a chance to take advantage of the new business opportunities created by cannabis legalization and regulated sales. We want these opportunities to expand to those businesses that are helping to fill storefronts, warehouses and other commercial properties that have closed their doors during the pandemic, and creating new jobs in communities where the need is greatest.”