New Jersey Marijuana Delivery License

What Is a Marijuana Delivery License in New Jersey?

A New Jersey cannabis delivery license is granted to a cannabis business that acts as a courier for licensed cannabis retailers. A cannabis delivery licensee is permitted to accept direct orders from customers that will be fulfilled by a cannabis retailer. The licensee may also pick up the product from the certified cannabis handler working with a retailer for delivery to a consumer.

Per the New Jersey Cannabis Regulatory Enforcement Assistance and Marketplace Modernization Act (CREAMMA), persons or businesses acting as couriers for the delivery of marijuana products must obtain marijuana delivery licenses to legally operate in the state.

How to Apply for a Marijuana Delivery License in New Jersey

Cannabis delivery license applicants are required to meet certain requirements in order to qualify for approval. These requirements include that the persons:

• Apply for the delivery license in the manner described in Section 18 of P.L.2021, c.16 (C.24:6I-35)
• At least one substantially engaged individual who has resided in New Jersey for at least two years as of the application date is required. The applicant must also provide evidence that this individual, as well as any other person with a financial stake who has decision-making power over the cannabis delivery service mentioned on the application, is 21 or older.
• Meet the requirements set by any rule or regulation adopted by the Cannabis Regulatory Commission (CRC)
• Provide for each of these persons to undergo a criminal history record background check:
  • any person described as an owner
  • any person other than an owner who owns less than 5% of the cannabis delivery operation or who is a group member that owns less than 20% of the cannabis delivery service and no member owns more than 5% of the total investment, and who does not have the power to make controlling decisions regarding the cannabis delivery service
  • any operator
  • any officer
  • any employee

In addition to these requirements, an application for a cannabis delivery license must include:

• A social responsibility and research statement, which may include but are not limited to:
  • A community impact plan outlining how the applicant plans to benefit the community in which the proposed cannabis delivery business will be situated, including an economic impact plan and a description of outreach efforts;
  • A written description of the applicant's record of philanthropy, social responsibility and ties to the proposed host community; a summary of any research the applicant has conducted on the negative effects of cannabis use or addiction, and the applicant's involvement in or support of cannabis-related research and educational activities; and
  • A detailed plan detailing any research and development linked to the harmful effects of cannabis, as well as any cannabis-related educational and outreach initiatives that the applicant expects to undertake if the CRC grants the applicant a license.
• Workforce development and job creation plan, which may include information about the applicant's history of job creation and future job creation at the proposed cannabis delivery business; education, training, and resources to be made available to employees; any applicable certifications; and an optional diversity strategy.
• A business and financial plan that includes, but is not limited to:
  • An executive summary of the applicant’s business strategy;
  • A demonstration of the applicant's financial ability to execute the business plan, which may include, but is not limited to, bank statements, company and personal financial statements and debt and equity financing statements; and
  • A description of the applicant's plan to comply with the Financial Crimes Enforcement Network's cannabis guidance issued under 31 U.S.C. s.5311 et seq., the federal "Bank Secrecy Act," as demonstrated by the submission of letters regarding the applicant's banking history from banks or credit unions certifying they are aware of the applicant's business activities, or entities with knowledge of the applicant's business activities
• Whether any of the applicant's majority or controlling owners has previously been approved by the commission to serve as an officer, principal, or key staff of an alternative treatment center, personal use cannabis organization, distributor, or delivery service, provided that the individual served in that capacity for a minimum of six months.
• Any additional information the commission considers pertinent in deciding whether to issue the applicant a license.

A New Jersey cannabis delivery license application will be disqualified unless it includes documentation demonstrating that the applicant will retain final control of the proposed premises upon approval of the application, such as a lease agreement, contract for sale, title, deed, or similar documentation. If the applicant intends to lease the premises, the application will be rejected unless the applicant can provide certification that the landlord is aware that the tenant's use of the premises will involve operations as a cannabis delivery service.

An application for a New Jersey cannabis delivery license must also not include a proposed site that would locate the delivery service's premises within or adjacent to a grocery store, delicatessen, indoor food market, or other store engaged in retail food sales, or within or adjacent to a store engaged in licensed retail sales of alcoholic beverages.

CRC rules for reviewing applications for cannabis delivery licenses also lean on the social equity concept common in several other states in the United States. The CRC initial rules address social equity by expanding possibilities for members of statutorily designated target groups in the cannabis sector. The CRC regulations designate three distinct kinds of businesses for priority assessment and approval throughout the cannabis license application process:

• Social Equity Businesses: These are those that are owned by people who have either lived in economically disadvantaged parts of New Jersey or have previously been convicted of cannabis-related offenses. \ Economically disadvantaged areas are locations with zip codes that earn less than 80% of the state's average median household income; have health uninsured rates that exceed 150% of the state's health uninsured rate; and have poverty rates that exceed 150% of the state's poverty rate, as determined annually by the United States Census Bureau.
• Diversely Owned Businesses: These are those that are owned by women, disabled veterans, and people classified as minorities that are certified by the New Jersey Department of the Treasury to be in one or more of the categories listed.
• Impact Zones Businesses: Businesses situated in Impact Zones, owned by residents of Impact Zones, or employing residents of Impact Zones. Impact Zones are communities in New Jersey having big populations, high unemployment rates, or high rates of crimes or arrests for marijuana.

Regardless of when they submit, individuals or entities in these three groups will have their applications reviewed ahead of other applicants.

Applications for delivery licenses will be evaluated and examined on a point scale, with the CRC establishing the point total, point categories, and point distribution method. The CRC aims to complete the review of license applications within 90 days of submission and to award licenses within 30 days after notification of approval.

What are Conditional Marijuana Licenses in New Jersey?

Conditional cannabis licenses are cannabis licenses issued to small entrepreneurs to help them break into the New Jersey cannabis market. A conditional license allows the holder to function legally in the same way a fully licensed cannabis entrepreneur would, but only for a limited period of time. By obtaining a conditional license, typically through a shortened application process, an applicant may begin operations without receiving a full license, but risk losing it if the final requirements are not fulfilled within a certain period.

Does New Jersey Issue Conditional Licenses to Cannabis Delivery Businesses?

Yes, persons interested in obtaining cannabis conditional delivery licenses may do so by applying to the CRC. The application process and requirements are not as lengthy as the procedure for annual cannabis delivery license applicants. Conditional license applications can be filed by persons who made less than $200,000 in the previous tax year. Conditional license applicants can change their locations and bring on new owners to raise capital, provided the applicant remains a minority owner. Pursuant to CREAMMA, the CRC must ensure that 35% of the total licenses issued for cannabis delivery businesses in the state are conditional licenses.

Per the CRC rules, applicants who are granted conditional cannabis delivery licenses have 120 days to identify a suitable location, obtain municipal approval, and apply for conversion to an annual license.

How to Apply for a Conditional Marijuana Delivery License in New Jersey?

To begin the application process for a conditional cannabis delivery license, the applicant must submit to the CRC background (criminal) disclosure information, a business plan, and a regulatory compliance plan. If the application is approved, the applicant has 120 days to find an appropriate site, obtain municipal approval, and apply for the conversion of the conditional license into an annual license.

For each conditional delivery license issued, the CRC will also provide the approved licensee with documentation outlining the remaining conditions to be fulfilled under the current legislation or relevant regulation based to obtain the full license within 120 days of issuance. This period may be extended on request but at the discretion of the CRC.

Conditional delivery licensees who convert to annual licenses are exempt from submitting the sections of the application that require applicants to demonstrate previous experience in the regulated cannabis industry. Such an applicant, however, will be expected to submit standard operating procedures for the cannabis delivery company, an environmental impact statement, a workforce development plan, and a security plan.

To apply for a conditional cannabis delivery license, the following information must be provided, and criteria met:

• The application must include at least one individual who has resided in New Jersey or a minimum of 2 years as of the date of the application
• A list of all persons with a financial interest who also have decision-making authority for the proposed wholesaler cannabis business.
• Proof that the significantly involved individual and any other person worth a financial interest who also has decision-making authority for the wholesaler business is aged 21 or older.
• Proof that each individual with a financial interest in the proposed company who also has decision-making power has an adjusted gross income of no more than $200,000, or no more than $400,000 if filing jointly with another person, for the immediately previous taxable year.
• A certification that no person with a financial interest who also has decision-making authority over the proposed business has a financial interest in an application for an annual license that is currently being reviewed by the CRC or in a cannabis business that is currently operating under an annual license.
• The name, date of birth, address, and resumes of each executive officer, any significantly involved persons, and persons with financial interest who also have decision-making authority for the proposed wholesaler business. Additionally, photocopies of their driver's licenses or other government-issued identification, as well as background check information, must be supplied in the format and manner specified by the CRC in conjunction with the Superintendent of State Police.
• Federal and state tax identification numbers for the prospective cannabis company, as well as evidence of registration with the Department of the Treasury's Division of Revenue.
• Information about the prospective cannabis company, including its legal name, any registered alternative names under which it may do business, and a copy of the proposed cannabis firm's articles of incorporation and bylaws.
• The planned cannabis company's business plan and management operation profile.
• The applicant plans to obtain the relevant liability insurance coverage for the proposed business.
• Any other requirements established by the CRC pursuant to regulation.

Following approval, the CRC will issue an applicant a conditional license which will be non-transferrable for the duration of its validity. The approval will come no later than 30 days after the applicant has received a notice of approval. Note that a conditional license application may be denied if the municipality in which the proposed business premises will be located has enacted a numerical limit on the number of cannabis businesses in its jurisdiction.

If the application is denied, the CRC will inform the applicant in writing of the exact reason for the denial, refund the applicant 80% of the application fee, and provide the applicant with an opportunity for a hearing according to the Administrative Procedure Act.

Are there Local Regulations for Cannabis Delivery License Businesses in New Jersey?

Yes. Municipalities in New Jersey have the authority to impose limitations on delivery businesses and other cannabis companies as they see proper. The recently published CRC's initial rules acknowledge the importance of New Jersey municipalities in regulating the state's budding cannabis industry. While the CRC's rules establish the structure for managing the state's cannabis industry, municipalities retain the authority to decide how that framework is implemented in their jurisdictions. The CRC will license delivery businesses in New Jersey only if they have secured support from municipalities through zoning approvals and have been confirmed to operate in compliance with any local limitations.

Municipalities have the power under New Jersey P.L. 2021, c.16, to control operating hours, the number and types of licensed businesses operating inside their borders, and whether to levy a 2% transfer tax on all cannabis-related transactions. They may also impose on cannabis enterprises any obligations or restrictions applicable to other types of businesses, such as requiring compliance with all applicable laws and ordinances.

Municipalities will also have a role in determining which applicants seeking to operate in their territories receive licenses from the CRC. Note that municipalities are not authorized to prohibit the distribution of cannabis goods to customers inside their jurisdiction or the transit of cannabis within their jurisdiction.

Municipalities that adopt an ordinance regulating or prohibiting cannabis delivery businesses by August 21, 2021, have the authority to amend their rules at any time and must notify the CRC if a cannabis delivery business violates their regulations.

How Much Do Marijuana Delivery Licenses Cost in New Jersey?

For conditional license applicants, the application submission fee is $200, while the approval fee is $800. Microbusiness applicants are charged half of these conditional license fees ($100 for application submission and $400 for application approval). The CRC charges a $400 application submission fee for any standard cannabis license and requires an approved applicant to pay a $1,600 approval fee. For a microbusiness wishing to enter the New Jersey cannabis delivery market, the application and approval fees are $200 and $800 respectively.

Successful businesses awarded the New Jersey Class 6 Cannabis Delivery Services license must pay a $3,000 licensing fee. If they are a microbusiness, they must pay a $1,000 license fee.

Can Marijuana Delivery Licensees Hold Other Cannabis Licenses in New Jersey?

Ownership of multiple cannabis business licenses is highly regulated in New Jersey. During the 24 months following the enactment of CREAMMA), most license holders can only hold one license. However, after the 24-month post-enactment period, the ownership rules are loosened with business entities allowed to concurrently hold a delivery, retailer, manufacturer, and cultivator license but not more than one of each.