New Jersey Adopts Initial Rules for State’s Adult-Use Cannabis Program

It’s been roughly nine months since New Jersey voters approved adult-use cannabis legalization in the 2020 election, and on Aug. 19, the state’s Regulatory Commission (CRC) took steps to get the market off the ground when it voted to adopt the first set of rules to regulate the industry.

“We were ambitious with our timeline to make personal-use available, and I am pleased the Commission was able to create these regulations in record time,” Gov. Phil Murphy said in a public statement. “The regulations adopted today reflect the CRC’s commitment to transparency and social equity. Prioritizing applications from women and minority entrepreneurs, from business owners living in economically-disadvantaged communities, and from small business owners will ensure the market grows the way we envisioned—in a way that is socially equitable and reflective of our state’s diversity.”

The initial rules aim to address anticipated barriers to entry in the state’s forthcoming adult-use market in a few different ways.

First, the CRC will prioritize applications from certified minority-, women- and disabled veteran-owned businesses, as well as from applicants who live or will locate their business in one of several designated “Impact Zones” or economically disadvantaged areas.

“We are pleased to see the Cannabis Regulatory Commission is prioritizing applications from minority-, women- and disabled veteran-owned businesses,” John Fanburg, co-chair of the Cannabis Industry Practice at Brach Eichler, said in a public statement. “It is a recognition as to the failed efforts of prohibition when it comes to cannabis and its impact upon the minority community.  We are hopeful that as this process continues to evolve the commission will update their rules and regulations to be more reflective of the industry and the population of applicants going forward.”

The regulations also include flexible application requirements for microbusinesses and those applying for conditional licenses, as well as application fees as low as $100.

The new rules create 37 adult-use cultivation licenses, which must be issued by February 2023. The regulations do not limit the number of manufacturing, delivery, wholesale or retail licenses, and microbusinesses—defined as having 10 employees or less—will not count toward any license limits ultimately set by the CRC, according to an NJ.com report.

The state’s 12 licensed medical cannabis businesses can also seek adult-use licenses, but must show that they can legally operate in the adult-use market within their municipalities, certify that they have enough product to serve both patients and adult-use customers, and not make any operational changes that favor adult-use customers over patients, according to NJ.com.

“All the commissioners have worked diligently since the CRC was launched in April to bring these rules to fruition,” Commission Chair Dianna Houenou said in a public statement. “We know that there is a lot of interest in getting this market up and running and we were duty-bound to do it right. We are honored to be able to lay the foundation for an economically sound, socially equitable, and safe market.”

Murphy signed cannabis legalization bills into law in February that laid out the types of adult-use cannabis business licenses that will be available

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