New Jersey Conditional Cannabis License Applications
Updated: 2022
New Jersey is prioritizing the conditional cannabis license application with its highest priority status. Any type of cannabis business license has a conditional component and if you want to get a cannabis business license in the Garden State – you need to do it by applying as a conditional applicant, preferably a social equity or Diversely owned applicant!
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The New Jersey Cannabis Regulatory Committee (CRC) regulations were released on late August 2021, by state officials, outlining the future of the cannabis industry. If you want to take a look at New Jersey’s initial rules for the cannabis market, check out our post about it.
A New Jersey Conditional Cannabis License is a temporary license designated as either a Class 1 Cannabis Cultivator license, a Class 2 Cannabis Manufacturer license, a Class 3 Cannabis Wholesaler license, a Class 4 Cannabis Distributor license, a Class 5 Cannabis Retailer license, or a Class 6 Cannabis Delivery license that allows the holder to lawfully act as a cannabis cultivator, cannabis manufacturer, cannabis wholesaler, cannabis distributor, cannabis retailer, or cannabis delivery service as the case may be, which is issued after an abbreviated application process, after which the conditional license holder shall have a limited period of time in which to become fully licensed by satisfying all of the remaining conditions for licensure which were not required for the issuance of the conditional license.
In simpler terms: as some of the conditions for obtaining a full license approval may take several months, a New Jersey Conditional Cannabis License would allow a
licensee to function pending the receipt of certain -and specified- final conditions. In this sense, the applicant would go in an abbreviated process and could begin operations before having a full license, under the risk of losing its license if the final conditions are not met after a certain timeframe.
How to apply for a New Jersey Conditional Cannabis License
The timeframe for the New Jersey Conditional Cannabis License Application
The Cannabis Regulatory Commission (CRC) will start accepting and processing applications within 30 days after the CRC’s initial rules and regulations have been adopted. Within 14 days of receipt, the CRC will forward a copy of each application to the municipality in which the applicant desires to operate the cannabis establishment, distributor, or delivery service.
The CRC will start accepting and processing applications from applicants within 30 days after the CRC’s initial rules and regulations have been adopted pursuant to the legislation on the matter.
What Percentage Are New Jersey Conditional Cannabis Licenses?
The CRC must ensure that at least 35% of the total licenses issued for each class of cannabis establishment, and for cannabis distributors and delivery services, are conditional licenses, which 35% figure shall also include any conditional license issued to an applicant which is subsequently replaced by the commission with an annual license due to that applicant’s compliance for the annual license pursuant to the legislation.
WANT HELP: Get our team working for your application here.
How to apply for a New Jersey Conditional Cannabis License
According to New Jersey’s initial rules, conditional applicants will simply need to submit background disclosure information, a business plan, and a regulatory compliance plan to the CRC.
If they are accepted, they will have 120 days to identify a suitable location, obtain municipal approval, and apply for conversion to an annual license.
Conditional license holders who convert to annual licenses will not be required to submit the parts of the application that require applicants to establish prior experience in the regulated cannabis sector, as required by legislation.
The CRC has to verify the following information in order to grant a license:
- That the application includes at least one significantly involved person who has resided in New Jersey for at least two years as of the date of the application.
- A listing included with the application, showing all persons with a financial interest who also have decision making authority for the proposed cannabis establishment, distributor, or delivery service detailed in the application.
- Proof that the significantly involved person and any other person with a financial interest who also has decision making authority for the proposed cannabis establishment, distributor, or delivery service is 21 years or older.
- The name, address, date of birth, and resumes of each executive officer, all significantly involved persons, and persons with a financial interest who also have decision making authority for the proposed cannabis establishment, distributor, or delivery service, as well as a photocopy of their driver’s licenses or other government-issued form of identification, plus background check information in a form and manner determined by the commission in consultation with the Superintendent of State Police; concerning the background check, an application shall be denied if any person has any disqualifying conviction pursuant to the legislation, based upon an applicable class of cannabis establishment for which the application was submitted, or based upon the application being for a cannabis distributor or delivery service, unless the commission determines pursuant to the legislation in the matter that the conviction should not disqualify the application.
- Proof that each person with a financial interest who also has decision making authority for the proposed cannabis establishment, distributor, or delivery service has, for the immediately preceding taxable year, an adjusted gross income of no more than $200,000 or no more than $400,000 if filing jointly with another.
- A certification that each person with a financial interest who also has decision making authority for the proposed cannabis establishment, distributor, or delivery service does not have any financial interest in an application for an annual license under review before the commission or a cannabis establishment, distributor, or delivery service that is currently operating with an annual license.
- The federal and State tax identification numbers for the proposed cannabis establishment, distributor, or delivery service, and proof of business registration with the Division of Revenue in the Department of the Treasury.
- Information about the proposed cannabis establishment, distributor or delivery service including its legal name, any registered alternate name under which it may conduct business, and a copy of its articles of organizations and bylaws.
- The business plan and management operation profile for the proposed cannabis establishment, distributor, or delivery service.
- The plan by which the applicant intends to obtain appropriate liability insurance coverage for the proposed cannabis establishment, distributor or delivery service.
- Any other requirements established by the commission pursuant to regulation.
WANT HELP: Get our team working for your application here.
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WANT HELP: Get our team working for your application here.
Expedited Determination Process for Conditional Applicants
Not more than 30 days after the receipt of an application the CRC has to make a determination as to whether the application is approved or denied, or that the commission requires more time to adequately review the application.
The CRC also has to verify the information contained in the application and review the qualifications for the applicable license class, and regulations concerning qualifications for licensure promulgated by the commission for which the applicant seeks licensure, and not more than 90 days after the receipt of an application, make a determination as to whether the application is approved or denied, or that the commission requires more time to adequately review the application.
Further, the CRC shall approve a license application that meets the requirements established by the legislature unless the CRC finds by clear and convincing evidence that the applicant would be manifestly unsuitable to perform the activities for the applicable license class for which licensure is sought.
If the application is approved, upon collection of the license fee, the commission shall issue an annual license to the applicant no later than 30 days after giving notice of approval of the application unless the commission finds the applicant is not in compliance with regulations for annual licenses enacted pursuant to the provisions in the legislation or the commission is notified by the relevant municipality that the applicant is not in compliance with ordinances and regulations made pursuant to the provisions of the legislation and in effect at the time of application, provided, if a municipality has enacted a numerical limit on the number of cannabis establishments, distributors, or delivery services and a greater number of applicants seek licenses, the commission shall solicit and consider input from the municipality as to the municipality’s preference or preferences for licensure.
If the application is denied, the commission shall notify the applicant in writing of the specific reason for its denial, and provide the applicant with the opportunity for a hearing in accordance with “Administrative Procedure Act”
What happens if my New Jersey Conditional License Application is Approved?
If the application is approved, upon collection of the conditional license fee, the commission shall issue a conditional license to the applicant, which is non-transferable for its duration, no later than 30 days after giving notice of approval of the application, unless the commission finds the applicant is not in compliance with regulations for conditional licenses enacted pursuant to the provisions established in the legislation or the commission is notified by the relevant municipality that the applicant is not in compliance with ordinances and regulations made pursuant to the provisions on the legislation and in effect at the time of application, provided, if a municipality has enacted a numerical limit on the number of cannabis establishment, distributors, or delivery services and a greater number of applicants seek licenses, the CRC must solicit and consider input from the municipality as to the municipality’s preference or preferences for licensure.
For each license issued, the CRC shall also provide the approved licensee with documentation setting forth the remaining conditions to be satisfied under the current legislation or relevant regulations based upon the applicable class of cannabis establishment for which the conditional license issued, or based upon the conditional license issued for a cannabis distributor or delivery service, and which were not already required for the issuance of that license to be completed within 120 days of issuance of the conditional license which period may be extended upon request to the commission for an additional period of up to 45 days at the discretion of the CRC.
After the applicant is issued a conditional license, a conditional license holder will then be required to solidify the permanent site for their business, gain control of the property through lease or purchase, and gain municipal approval.
Conditional license-holders can add new owners in the conditional license phase, provided that the majority of the equity in the business remains with the persons or entities that can qualify for the conditional license. Once ready, the license-holders can then submit a conversion application, which includes submitting standard operating procedures for the business, an environmental impact plan, a workforce development plan, and a security plan.
What Happens if a New Jersey Conditional License Application is denied?
The CRC shall deny a license application to any applicant who fails to provide information, documentation, and assurances as required by the legislation or as requested by the CRC, or who fails to reveal any material fact to qualification, or who supplies information which is untrue or misleading as to a material fact pertaining to the qualification criteria for licensure.
If the application is denied, the commission shall notify the applicant in writing of the specific reason for its denial, provide with this written notice a refund of 80% of the application fee submitted with the application, and provide the applicant with the opportunity for a hearing in accordance to the “Administrative Procedure Act”.
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Additional Requirements
Further, the CRC shall require all applicants for cannabis licenses, other than applicants for conditional licenses for any class of cannabis establishment or for a cannabis distributor or delivery service, or for either a conditional or annual license for an establishment, distributor, or delivery service that is a microbusiness pursuant to subsection F of the legislation to submit an attestation signed by a bona fide labor organization stating that the applicant has entered into a labor peace agreement with a bona fide labor organization. The maintenance of a labor peace agreement with a bona fide labor organization by a licensed cannabis establishment that is a microbusiness, shall be an ongoing material condition of the establishment’s, distributor’s, or delivery service’s license.
The submission of an attestation and maintenance of a labor peace agreement with a bona fide labor organization by an applicant issued a conditional license for a cannabis establishment, distributor or delivery service, other than an establishment that is a microbusiness, shall be a requirement for final approval for an annual license.
Further, failure to enter, or to make a good faith effort to enter, into a collective bargaining agreement within 200 days of the opening of a licensed cannabis establishment, distributor, or delivery service, other than an establishment that is a microbusiness, shall result in the suspension or revocation of the establishment’s, distributor’s, or delivery service’s license.
Each license application shall be scored and reviewed based upon a point scale with the commission determining the amount of points, the point categories, and the system of point distribution by regulation. The commission shall assign points and rank applicants according to the point system.
The commission may, pursuant to a process set forth in regulation and consistent with this subsection, adjust the point system or utilize a separate point system and rankings with respect to the review of an application for which a conditional license is sought, or for which a microbusiness license is sought. If two or more eligible applicants have the same number of points, those applicants shall be grouped together and, if there are more eligible applicants in this group than the remaining number of licenses available, the commission shall utilize a public lottery to determine which applicants receive a license or conditional license, as the case may be.
An initial application for licensure shall be evaluated according to criteria to be developed by the commission. There shall be included bonus points for applicants who are residents of New Jersey.
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