By Thomas Howard. He has over 10 years of experience in corporate and cannabis laws nationwide.
If you’re an entrepreneur seeking a New Jersey cannabis license, it’s important to understand the costs involved. From application fees to renewal costs, there are several factors that can affect the total expenses incurred in obtaining and maintaining a license. In this blog post, we’ll take a closer look at the different types of cannabis business licenses available in New Jersey and outline the associated fees and other cost considerations. Take note, under the new rules, Social Equity applicants will be given priority and exclusive access to licenses for Wholesaler, Distributor, and Delivery service class licenses. The New Jersey Cannabis Regulatory Commission’s (CRC) will exclusively accept certain marijuana license applications from social equity applicants starting on September 27, 2023.
Types of Cannabis Business Licenses in New Jersey
New Jersey offers various types of cannabis business licenses, including cultivator, manufacturer, wholesaler, distributor, retailer and delivery. In addition to these standard licenses, the state also has conditional and micro business licenses available. The application process for each license includes eligibility requirements and prioritization processes outlined in the Notice of Application issued by the Cannabis Regulatory Commission. Social equity businesses, diversely-owned businesses and impact zone businesses are given priority review for applications that receive bonus points on their scores.
Cultivator License
The application fee for a Class 1 Cultivator License in New Jersey is $20,000. This non-refundable fee must be paid upon submitting the application. Renewal fees are also required for all licenses annually.
In addition to the application and renewal fees, former medical cannabis cultivators in New Jersey must also provide a security deposit of $250,000 for a conditional license or $500,000 for an annual license. The deposit will be returned to the licensee once their license has been terminated without violating any rules or regulations set forth by the Cannabis Regulatory Commission.
Manufacturer License
Manufacturers looking to obtain a cannabis license in New Jersey should be aware of the various costs involved. These include application fees, renewal fees, and compliance and safety plan review costs. The application fee for a Class 2 Manufacturer License is $10,000, while the renewal fee is $5,000. Additionally, businesses will need to cover any compliance and safety plan review costs incurred during the licensing process. It’s important to budget accordingly for these expenses in order to ensure a smooth licensing process.
Wholesaler License
When applying for a Class 3 Wholesaler License in New Jersey, it’s important to consider the associated fees. The application fee for a Wholesaler License is $200 and must be submitted with your application. Additionally, there is an annual license fee of $10,000 that must be paid annually to maintain an active license. As part of the licensing process, applicants will also need to undergo background checks which come with their own fees.
Keep in mind that businesses seeking conditional licenses will have different fees based on their individual circumstances. However, understanding the standard costs associated with obtaining and maintaining a Wholesaler License can help entrepreneurs plan and budget accordingly as they work towards entering into this sector of the cannabis industry in New Jersey.
Distributor License
When applying for a Class 4 Distributor License in New Jersey, businesses should be aware of the associated fees. An application fee is required at the time of submission and must be paid before the application can be reviewed. License applicants will have to provide thhe following documentation; a Comprehensive Business Plan and Management Profile, Liability Insurance Plan, and the Regulatory Compliance Plan. Those 3 requirements will be scored by the CRC. Finally, once you get the conditional license, you will have to provide more documentation that proves your capability to operate the business. It’s important to consider the application and operation costs when creating a budget for your cannabis business in New Jersey.
Retailer License
When applying for a Retailer License in New Jersey, there are several fees to keep in mind. The application fee is $1,000 and the initial license fee for each dispensary location is $20,000. Additionally, biennial licensing fees of $10,000 apply to dispensaries located in municipalities with a population of 20,000 or more. It’s important to budget accordingly when planning your cannabis business venture and consider any potential costs associated with obtaining licenses from the Cannabis Regulatory Commission.
Delivery License
When applying for a Class 6 Delivery License in New Jersey, businesses should expect certain costs. These include the application fee and biennial licensing fee. Additionally, due to COVID-19, there is a registration process required to ensure compliance with social distancing guidelines. It’s important for entrepreneurs seeking to obtain a New Jersey cannabis license to budget accordingly and factor in all associated fees when planning their business operations.
Diversely-Owned Business License
Entrepreneurs who own diverse businesses can apply for a Diversely-Owned Business License, which offers priority review, scoring and approval. This license is limited to certified minority-owned, woman-owned or disabled veteran-owned businesses.
Registration Fees For Diverse Owned Businesses(Reimbursement)
The NJ Economic Development Authority provides reimbursement of registration fees for socially and economically disadvantaged business owners.
Licensing Fees (Annual)
Diversely owned businesses must pay annual licensing fees to maintain their licenses.
Assistance from the NJ Economic Development Authority
The NJ Economic Development Authority also offers resources and assistance to diversely owned cannabis businesses that are looking to expand their operations or access financing.
Social Equity Business License
The Social Equity Business License is a specialized license that aims to create opportunities for communities disproportionately impacted by cannabis prohibition. This license gives priority review, scoring and approval to the applicants who meet specific eligibility criteria, including residency in an economically disadvantaged area.
Eligibility for the Social Equity Business License includes:
- Residency in an economically disadvantaged area
- Prior conviction of a cannabis-related offense or having a parent, guardian or spouse with such a record
- Ownership stake of at least 51% of the business by individuals meeting one or both of these criteria
Additionally, social equity businesses are eligible for resources such as mentoring services and low-interest loans from New Jersey’s Cannabis Regulatory Commission.
Impact Zone Business License
For entrepreneurs seeking to establish their cannabis business in an Impact Zone, the New Jersey Cannabis Regulatory Commission offers a specialized license. This type of license gives priority review, scoring, and approval to businesses that will operate in areas identified as having high unemployment rates or high numbers of cannabis-related convictions. The goal is to spur economic development within these zones while also promoting social equity by providing opportunities for those who have been disproportionately impacted by past drug policies.
Here are some essential points to note about the
- Businesses must be located within an approved Impact Zone.
- Owners or employees must either reside in an approved zone or have prior drug convictions from one.
- Applicants can receive bonus points for hiring residents from these designated zones and meeting other criteria outlined in the Notice of Application.
- Priority review means that applications will be processed ahead of others, giving businesses a quicker path towards opening their doors.
Conditional License
An Interim Step Towards a Full License
A conditional license is an interim status that gives applicants 120 days to find a site, secure municipal approval, and apply for conversion to an annual license. It’s designed to help businesses move forward with their plans while they’re waiting for the final approval of their application. However, it’s important to note that there are specific criteria that need to be met before you can obtain a conditional license. These include having a complete application with all supporting documents, being in good standing with the Cannabis Regulatory Commission (CRC), and not having any outstanding debts or fines owed to the CRC. If approved for a conditional license, you will still need to comply with all regulations set forth by the CRC during your temporary licensing period.
Microbusiness License
A $100 nonrefundable online application fee is required for a New Jersey Microbusiness License. If awarded the license, an annual licensing fee must be paid at each renewal, which varies based on the size of your operation and can cost anywhere from $500 to $5,000.
Fees for New Jersey Cannabis Licenses
The New Jersey CRC released a Fee Schedule that became effective on March 6. 2023. When applying for a New Jersey cannabis license, there are several fees to keep in mind. These include the application fee, which ranges from $50-$10,000 depending on the type of license being sought. Additionally, there is a license renewal fee that must be paid annually and varies based on the type of license held. Other fees to consider include investigation fees and miscellaneous charges such as change-of-location or duplicate-license requests. Understanding these costs can help entrepreneurs plan their budgets accordingly when seeking to obtain a New Jersey cannabis license.
Application Fee
A non-refundable fee is required for submitting a license application in New Jersey. The amount of this fee varies based on the type of license being applied for and must be paid upfront before the application can be reviewed.
License Renewal Fee
An annual fee is required to maintain an active cannabis license in New Jersey. The amount of the renewal fee depends on the type of license and can vary from year to year. It’s important for entrepreneurs seeking a New Jersey cannabis license to factor in these costs when budgeting for their business operations.
License Transfer Fee
When transferring ownership or control of a licensed cannabis business to another entity or individual, a license transfer fee is required. The amount of the fee may vary depending on whether it’s a partial or complete transfer. It’s important to understand these costs involved in order to properly budget for them and ensure compliance with regulations.
Investigation Fee
Required fee for conducting background checks and other investigations during the licensing process, The amount can vary depending on the scope and complexity of the investigation. As part of your application for a New Jersey
cannabis license, you will be required to pay an investigation fee in addition to other fees such as application fee, renewal fee, transfer fee, and miscellaneous fees. This investigation fee is necessary to cover the cost incurred by regulatory authorities in verifying the information contained in your application.
Here are some key points regarding
- The amount varies based on the scope and complexity of each individual case
- Investigation Fee must be paid before any initiation of background check or verification process
- The investigation usually includes criminal record checks for business owners/managers
- Additional investigative procedures may also include interviews with references provided.
Miscellaneous Fees
Additional fees can arise during different stages of the licensing process, such as inspections, fingerprinting, legal review, and more. It’s important to plan and budget accordingly because these fees can add up quickly. The exact amounts will depend on several factors like location, size of facility and number of employees.
Here are some miscellaneous fees that may come up during the licensing process:
- Fingerprinting fee: $75
- State Application fees: $500 – $1,000
- Local Application fee: $2,000 – $5,000
Factors Affecting New Jersey Cannabis License Fees
The cost of obtaining a New Jersey cannabis license is influenced by several factors. Business type, license category, duration, location of business and number of licenses issued are all important considerations that affect the fees charged for cannabis licensing in New Jersey. Each category has its own set of requirements and fees that must be met before an application can be approved. It’s important to carefully assess the costs involved before applying for a license to avoid unexpected expenses down the line.
Business Type
When applying for a New Jersey cannabis license, entrepreneurs must first decide on the type of business they want to establish. There are various options available such as sole proprietorship, partnership, and corporation. Additionally, businesses can choose between non-profit and for-profit models depending on their goals and objectives. Each business type has its own advantages and disadvantages in terms of tax implications, liability protection, ownership structure etc., so it’s important to consider all factors before making a decision.
License Category
When it comes to the license category for cannabis businesses in New Jersey, there are a few options to consider. Dispensary, cultivation, and manufacturing licenses are available for both medical use and adult-use purposes. Medical use licenses are strictly for registered patients with qualifying conditions, while adult-use licenses cater to the larger market of consumers aged 21 years or older. Each type of license allows for specific activities related to cannabis business operations such as growing plants (cultivation), producing goods (manufacturing), or selling products (dispensary). It’s important to note that social equity businesses, diversely-owned businesses, and those located in impact zones receive priority review when applying for these licenses.
License Duration
Annual Renewal Fees for New Jersey Cannabis License holders are required to keep their licenses active and in good standing. These fees must be paid within a certain period, as specified by the regulations. Failure to pay on time can result in Late Renewal Penalties being applied, which can significantly increase the overall cost of holding a cannabis license in New Jersey. It is essential for entrepreneurs seeking to obtain New Jersey Cannabis Licenses that they understand these costs involved and budget accordingly to ensure their business remains compliant with all regulations.
Location of Business
When it comes to setting up a cannabis business in New Jersey, there are two local government fees and taxes that you need to consider. These include zoning permit costs and other regulatory compliance expenses. Below is a list of some key things you should know:
- Zoning permit costs: The cost for obtaining zoning permits varies by location, but on average ranges from $200$1,000.
- Local Government Fees and Taxes: As with most businesses in New Jersey, cannabis businesses are subject to various local taxes such as property tax or sales tax. Regulations around these fees vary based on the location of your business so be sure to research your specific area’s requirements before opening up shop.
It’s important to note that regulations around the location of cannabis businesses can be strict due to public safety concerns. Therefore, it’s crucial that you comply with all requirements set forth by your municipality or county when establishing your business.
Number of Licenses Issued
The cost of obtaining a New Jersey cannabis license includes an application fee based on the license type. The following are the fees for each category:
- Class 1 Cultivator License: $20,000
- Class 2 Manufacturer License: $30,000
- Class 5 Retailer License: $10,000
There is currently no limit to the number of licenses available statewide. However, priority review and approval will be given to Social Equity Businesses, Diversely-Owned Businesses, and Impact Zone Businesses that receive bonus points during the application process.
How long does it take to receive a New Jersey cannabis license?
The timeline for receiving a New Jersey cannabis license can vary depending on several factors, including the type of license being applied for and the completeness and accuracy of the application. Generally, the Cannabis Regulatory Commission will review and score all license applications within 90 days of receipt.
However, the actual time it takes to receive a license can be longer if additional information or documentation is needed, or if there are any issues with the application. It is important to ensure that all necessary forms and supporting documents are included with the application to avoid any delays in the process. Additionally, applicants who qualify for priority review or who receive bonus points may receive expedited processing of their application.
Overall, entrepreneurs seeking to obtain a New Jersey cannabis license should be prepared for the possibility of a several-month process, and should work closely with legal and regulatory experts to ensure a successful outcome.
What documents are needed to apply for a New Jersey cannabis license?
If you’re looking to apply for a New Jersey cannabis license, there are several documents that you’ll need to provide. The exact requirements may vary depending on the type of license you’re applying for, but here are some of the common documents that you’ll likely need to submit:
1. Business Structure Documentation: This includes documents like your Certificate of Incorporation or Organization, Operating Agreement, and any other legal documents that establish your business entity.
2. Proof of Legal Authority to Operate: This can include things like a Certificate of Good Standing from the NJ Division of Revenue, a Business Registration Certificate from the NJ Division of Revenue, and any other licenses or permits required by your local municipality.
3. Premises Information: You’ll need to provide detailed information about the location where you plan to operate your cannabis business, including the address, square footage, and lease or ownership agreement.
4. Security Plan: You’ll need to provide a detailed security plan that outlines how you’ll ensure the safety and security of your cannabis business, including measures to prevent theft, diversion, and unauthorized access.
5. Financial Information: This includes things like a business plan, financial projections, and proof of sufficient funds to cover startup costs and ongoing expenses.
6. Applicant Information: You’ll need to provide detailed information about yourself and any other individuals or entities involved in the cannabis business, including background checks, personal history disclosures, and entity ownership disclosures.
7. Other Supporting Documentation: Depending on the type of license you’re applying for, you may also need to provide additional documentation such as product testing plans, standard operating procedures, and marketing plans.
It’s important to note that the New Jersey Cannabis Regulatory Commission may require additional information or documentation beyond what is listed above, so it’s crucial to carefully review the Notice of Application and any other regulations or guidance provided by the Commission. Working with experienced legal and regulatory professionals can help ensure that your application is complete and meets all requirements, increasing your chances of a successful outcome.
Cannabis Real Estate Issues in New Jersey
One of the key requirements for obtaining a New Jersey cannabis license is securing a suitable location for your business. The Cannabis Regulatory Commission requires detailed information about the premises you plan to use, including the address, square footage, and lease or ownership agreement.
In addition to meeting these basic requirements, there are several other real estate considerations to keep in mind when applying for a cannabis license in New Jersey. For example, the location of your business must comply with local zoning regulations, which can vary widely from one municipality to another.
Another important factor to consider is security. Because cannabis businesses are often targets for theft and other criminal activity, the Cannabis Regulatory Commission requires applicants to provide a detailed security plan that outlines measures to prevent unauthorized access and protect against theft and diversion.
Finally, it’s worth noting that the cost of real estate in New Jersey can be quite high, particularly in densely populated areas. As a result, you may need to budget significantly for rent or purchase costs in order to secure a suitable location for your cannabis business.
Overall, securing the right real estate location is a critical component of a successful New Jersey cannabis license application. By carefully considering the location, security, and other real estate requirements, you can increase your chances of obtaining a license and launching a successful cannabis business in the state.
Conclusion
In conclusion, obtaining a New Jersey cannabis license is a complex process that involves significant costs. From application fees to operational expenses, entrepreneurs need to carefully consider all the financial implications before entering this industry. However, with proper planning and expert guidance, it is possible to build a successful business in this emerging market.
In summary, while the required written plan and expenses associated with acquiring a New Jersey cannabis license may seem daunting at first glance, they are necessary investments for anyone looking to enter this fast-growing industry. We are offering proven and tested application templates for all the different types of licenses in New Jersey. Contact our team of Experts in the field so that you can get the necessary guidance in your endeavor.
About the Author
Tom Howard, Cannabis Industry Lawyer and Consultant has practiced commercial law since 2008 when he graduated law school and got his Series 7 & 66 Securities licenses. He pivoted to practicing litigation for financial institutions before helping cannabis teams form, capitalized and get licensed. He has concentrated in cannabis business since Illinois legalized in 2019. He won licenses for clients in Illinois, Connecticut, New Jersey, New Mexico, Massachusetts, Missouri and has gotten into lotteries in Ohio, Maryland and Maine. He became a Certified Ganjier in 2021. He chairs the ISBA’s section council for Cannabis Law in 2023.
