New Jersey Introduces Deadlines for Processing Cannabis Business Applications

At its November 10, 2021 meeting, the New Jersey Cannabis Regulatory Commission announced that it would accept cultivation, manufacturing, and testing laboratory license applications from December 15, 2021, and retail license applications from March 15, 2022.

Proposals are announced as being accepted and approved on an ongoing basis (pun is always intended), although certain proposals may “cut the line”. Conditional applications (in which applicants only tick certain boxes and then find a suitable property 120 days after approval and seek approval from local authorities) are preferred to annual approval applications. In addition, priority is given in the following order: companies with social justice, companies in different ownership, companies in the impact zone, applicants with bonus points and then the rest of the applicants. To clarify, it can be helpful to think of a conditional social justice applicant in various ownership as gas and a standard annual license applicant as the most inactive of all Schwag!

Photography by Steve Kelley aka Mudpig / Getty Images

In relation to the total number of concessions, only one restriction is given at state level, namely that no more than 37 new cultivation concessions will be awarded in the first two years. It follows that the true limit on the number of licenses of each type that can be issued is based on the upper limits that each municipality sets for each license type.

One downer for the communities is that 70% of them have opted out of allowing cannabis stores. The deadline for opting out (or the standard opt-in for 5 years) came days after the CRC published provisional, partial regulations. Communities that chose to do this essentially had to put on a blindfold and smoke a state-rolled joint without knowing what the regulations might entail!

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The problem now is that a number of these communities have to re-enroll and then create and approve the rules for cannabis companies within their borders before they can approve companies. This could give applicants another incentive to purchase conditional licenses, which would allow applicants to obtain a municipal permit after obtaining a conditional state permit.

In another important development, the CRC announced that it would issue a definitive list of impact zones in the state. This is especially important for applicants who are not social justice companies or variously owned companies as it is the most effective way for such applicants to lower the limit on standard annual license applications.

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New Jersey’s legalization law required that adult cannabis sales begin by mid-February 2022. However, it is almost certain that only the existing large medical cannabis licensees will be able to start selling by this date. Start through new industry participants. Unfortunately, given the overall frequency of lawsuits resulting from the application process in multiple states, and the complex nature of this prioritization process, new applicants should also expect and prepare for litigation that could delay the granting of licenses.

Jon Purow is a counsel in Zuber Lawler’s New York office, helping clients with their legal issues related to cannabis and / or intellectual property. When he’s not serving as a masked vigilante or fighting crime, Jon hosts the Cannabis Last Week podcast, a hybrid news / analytics excerpt from over 420 sources.

This article originally appeared on Zuber Lawler and was republished with permission.