New Jersey Marijuana Distribution License

Does New Jersey Require a License to Distribute Marijuana and Marijuana Products?

In New Jersey, business entities or individuals looking to distribute marijuana must have a Class 4 Cannabis Distributor license according to Senate Bill 21, known as New Jersey Cannabis Regulatory, Enforcement Assistance, and Marketplace Modernization Act. Applicants may apply to the New Jersey Cannabis Regulatory Commission (CRC) to get this license. The CRC is responsible for regulating the licensure of marijuana business entities, including business entities involved in distributing marijuana in New Jersey. The CRC is authorized to determine the number of distributor licenses available to distributors. Hence, the CRC can call for new license applications at its own discretion. An applicant seeking a Class 4 Cannabis Distributor license may request a full, annual, or conditional license. A conditional license is a short-term license that is first issued to an applicant, then replaced with a full license. An applicant may also either register as a microbusiness or a standard business. A microbusiness is a business with a smaller footprint than a standard cannabis business regarding its business operations, capacity, and quantity of product.

The CRC decides and regulates the procedure for licensure. It has established a point scale for scoring Class 4 Cannabis Distributor license applications; hence, simplifying the application process. The CRC decides the point classification, the number of points, and the point distribution system. When assessing applications, the CRC also reviews applicants’ financing plans, environmental plans, operating plans, safety and security plans, and others. The CRC is authorized to adopt a modified or completely new point system for any conditional license application. The CRC prioritizes applications from impact zones or municipalities adversely impacted by past marijuana enforcement activity, unemployment, or poverty during application. Similarly, an applicant who employs at least 25% of their employees from impact zones may also have a high chance of getting a license. The CRC may also consider as an added advantage whether the applicant took part in a collective bargaining agreement with a bona fide labor organization representing or actively seeks to represent cannabis workers in New Jersey or other states.

The CRC requires that a Class 4 Cannabis Distributor license applicant is a state resident of at least five years. An applicant must also be a significantly involved person. This means that they must hold a minimum of 5% investment interest or must be a member of a group that holds a minimum of 20% investment interest and is authorized to make controlling decisions. Generally, the CRC issues licenses covering distribution, cultivation, manufacturing, retail sale, delivery, wholesale, and testing.

What Distribution Activities are Covered by New Jersey Marijuana Distribution License?

In New Jersey, the Class 4 Cannabis Distributor license enables distributors to transport marijuana items in bulk intrastate from one licensed marijuana establishment to another. These marijuana items may include marijuana products that have been properly processed, tested, packaged, sealed, and labeled. Holders of the Class 4 Cannabis Distributor License may also store the marijuana or marijuana products briefly if necessary to fulfill their duties in transporting the goods. Licensed distributors are allowed to transport marijuana between establishments licensed for cannabis cultivation, manufacturing, distribution, and retail. The law does not specify whether distributors can move marijuana products to testing facilities.

Does New Jersey Offer Transport-Only Distributor License?

No. New Jersey only has an all-encompassing distribution license that authorizes the holder to distribute marijuana between marijuana establishments.

How to Get Marijuana Distribution License in New Jersey

The New Jersey Cannabis Regulatory Commission (CRC) is in charge of issuing distribution licenses in the state. Business entities involved in the distribution of marijuana may apply to the Cannabis Regulatory Commission. The CRC also issues licenses for marijuana cultivation, manufacture, and sale in the state. New Jersey Administrative Code 1730 Personal Use Cannabis lays out the necessary documents to be submitted when an Alternative Treatment Center (ATC) is applying for a Class 4 Cannabis Distributor license. They include:

• A letter of intent informing the CRC of the license by the ATC
• Municipal approval for a distributor’s license, which shall include:
  • The ordinance(s) adopted by the municipality approving the operation of a Class 4 Cannabis Distributor license being sought by the ATC. If this is unavailable, a statement declaring that there are no municipal ordinances prohibiting the Class 4 Cannabis Distributor license and showing that all classes of licenses are allowed pursuant to N.J.S.A. 24:6I-45 may also be provided.
  • An attestation by the ATC that, as a condition of licensure, it shall conform to all restrictions on the location, mode, and time of operation of cannabis cultivation businesses established by the municipality.
  • Zoning approval from the municipality’s governing body, or a letter from the highest-ranking municipal official, as applicable, that authorizes the ATC to cultivate cannabis items at the ATC’s current premises; and
• A list of owners, principals, financial sources, management services contractors, and vendor-contractors associated with the proposed cultivation of cannabis items. Note that new owners, principals, financial sources, management services contractors, and vendor-contractors may be required to comply with the provisions of N.J.A.C. 17:30-7.11, 7.12, and 7.13.
• An attestation signed by a bona fide labor organization declaring that the ATC has entered into a labor peace agreement with such bona fide labor organization.
• A criminal history background check of each owner, principal, employee, or volunteer associated with the proposed cannabis business. The CRC will require each person to fund the background check. Persons who have been previously convicted of drug-related crimes, fraud, etc., shall be disqualified.
• A certification to the CRC that the ATC has adequate quantities of medical cannabis available to meet the reasonably expected needs of registered qualifying patients.
• A certification that the ATC shall not make operational changes that will limit access to medical cannabis for existing and prospective qualifying patients to run a cannabis business. The certification is required to include a detailed plan for prioritizing and meeting the needs of registered qualifying patients.

The Cannabis Regulatory Commission will also require the applicant’s information and some documents created in the planning phase; including:

• Research contributions
• Articles of incorporation/by-laws - background of principals, board members, and owners
• Minority-owned, women-owned, or veteran-owned business certification
• Distribution plan
• Workforce and job-creation plan
• Financing plan
• Safety plan
• Community engagement plan
• Environmental impact plan
• Quality control and quality assurance plan
• Labor compliance plan
• Labor Peace Agreement

When the documents have been submitted, the application will be processed. However, the Cannabis Regulatory Commission may request any additional information required to determine whether to accept the ATC’s certifications after the initial submission process. The CRC has not released a Class 4 Cannabis Distributor license application form, but it will be uploaded on the Cannabis Regulatory Commission website when available. Queries may be directed to the CRC via email at crc.info@crc.nj.gov.

An Alternative Treatment Center may apply to the CRC for expansion. However, in addition to the requirements mentioned above, the CRC will evaluate the following:

• The current medical cannabis canopy of the ATC;
• Total qualifying patient enrollment in the statewide medical cannabis program;
• The total medical cannabis canopy required to serve the total number of qualifying patients in the medical cannabis program on an ongoing basis;
• Qualifying patient enrollment at the ATC;
• Statewide sales of medical cannabis and medical cannabis products, and sales at the ATC;
• Statewide inventory and inventory of the ATC;
• The total medical cannabis canopy needed to serve the ATC’s qualifying patients on an ongoing basis; and
• The operational plans and capacity of the ATC to maintain or expand medical cannabis access for qualifying patients.

When an ATC’s application has been reviewed, the CRC may issue a written notice of its approval to an expanded ATC if:

• The ATC pays the conversion fee;
• The CRC accepts the ATC’s certifications; and
• The ATC has submitted complete, accurate, and verifiable information, as determined by the CRC.

The Cannabis Regulatory Commission mandates that an Alternative Treatment Center seeking expansion requests an onsite assessment after completing any necessary construction or preparation of the expanded ATC. The assessment is to verify that the premises, operations, and procedures align with the ATC’s application and comply with the Act. The CRC shall communicate the denial to the ATC in writing if the application is denied after the assessment. It shall include:

• Notice of the denial of the expanded ATC; here, the particular reason for the denial will be provided
• The opportunity to apply for an administrative hearing within 45 days after the date of the denial

If an application for an expanded ATC is denied, the CRC the applicant may seek a judicial review by the Appellate Division of the Superior Court.

How Much Does Marijuana Distribution License Cost in New Jersey?

The fee schedule does not specify how much distributor licenses cost in New Jersey. However, the general application fees are as follows:

• An annual license applicant for a microbusiness pays $200 as the application submission fee and $800 as the approval fee.
• An annual license applicant for a standard marijuana business pays $400 as the application submission fee and $1,600 as the approval fee.
• A conditional license applicant for a microbusiness pays $100 as the application submission fee and $400 as the approval fee.
• A conditional license applicant for a standard business pays $200 as the application submission fee and $800 as the approval fee.
• The conditional conversion submission fee for a microbusiness is $100.
• The conditional conversion submission fee for a standard business is $200.
• The conditional conversion approval fee for a microbusiness is $400.
• The conditional conversion approval fee for a standard business is $800.

The payment of an approval fee will be required after the CRC approves an application, but this fee will not be required if the application is denied. The submission fee is to be paid when the application is being submitted, and it will be refunded if an individual’s application is denied. After the first year of licensure, an applicant can renew their license by paying the actual amount of the application fee, excluding the approval and submission fee.

Can Licensed Marijuana Distributors Also Get Other Cannabis Licenses in New Jersey?

No, the law does not make provision for marijuana distributors to get other marijuana licenses in the state.