New Jersey Marijuana Manufacturing License

Does New Jersey Require a Marijuana Manufacturing License to Make Cannabis Products?

Yes. New Jersey requires a marijuana manufacturing entity to obtain a Class 2 Cannabis Processor license. The Senate Bill 21, New Jersey Cannabis Regulatory, Enforcement Assistance, and Marketplace Modernization Act, provides that this license is required for facilities involved in manufacturing, preparing, and packaging cannabis products. The New Jersey Cannabis Regulatory Commission (CRC) regulates the licensure of manufacturing entities in the state. The CRC’s regulatory jurisdiction also covers the number of processor licenses available to manufacturing entities in the state. The CRC may request new license applications when it deems it necessary, in accordance with the Act. A Class 2 Cannabis Processor license may be requested as a full, annual, or conditional license. A conditional license refers to a temporary license that is first issued then replaced with a full license. An applicant may either apply as a standard business or a microbusiness. The CRC issues at least 35% of the total number of available licenses as conditional licenses. Also, it issues at least 10% of the licenses to microbusinesses.

The CRC determines when applications will be requested as well as the procedure for application. The scoring of Class 2 Cannabis Processor license applications is based upon a point scale. The CRC regulates the point categories, the number of points, and the point distribution system. In assessing applications, the CRC reviews applicants’ financing plans, environmental plans, operating plans, and safety and security plans, amongst others. The CRC may decide to adopt a modified or completely new point system for any conditional license application. Importantly, the CRC considers whether the applicant is from an impact zone or municipality adversely impacted by past marijuana enforcement activity, unemployment, or poverty. Also, an applicant who employs at least 25% of their employees from impact zones may also have a high chance of getting a license.

In addition, if the applicant previously participated in a collective bargaining agreement with a bona fide labor organization that represents or actively seeks to represent cannabis workers in New Jersey or other states, it may be considered an added advantage. A Class 2 Cannabis Processor license applicant must be a state resident of not less than five years. They must also be “significantly involved.” A significantly involved person refers to a person who holds a minimum of 5% investment interest or is a member of a group that holds a minimum of 20% investment interest and is authorized to make controlling decisions.

The CRC issues licenses covering manufacturing, retail sale, cultivation, distribution, and other cannabis business activities.

Does New Jersey Require Licensed Cannabis Manufacturers to Have Cultivation Licenses?

New Jersey does not mandate that a licensed cannabis manufacturer gets a cultivation license. However, during the 24-month period beginning from February 22, 2021, a licensed manufacturer may decide to get a cannabis cultivator license. A licensed manufacturer may purchase or obtain marijuana from other licensed cultivators and manufacturers. In addition, licensed manufacturers will be allowed to develop, produce, manufacture, prepare, or otherwise create and package cannabis products. They may possess, transport, supply, distribute, or sell cannabis and cannabis products to other cannabis manufacturers. They may also sell usable cannabis and cannabis products to cannabis retailers or wholesalers.

Note that the ATC (Alternative Treatment Center) license granted to medical marijuana dispensaries in New Jersey covers both cannabis cultivation and manufacturing. However, an ATC licensee can only grow and manufacture cannabis and cannabis products for their dispensary.

How Does New Jersey Classify Marijuana Manufacturing Licenses?

New Jersey only classifies marijuana manufacturing licenses according to the size of the marijuana manufacturer’s premises. While it issues the same manufacturing licenses for businesses of all sizes, it charges different licensing fees for those with up to 10,000 square feet of manufacturing space and facilities occupying spaces bigger than 10,000 square feet.

What are the Different Types of Cannabis Manufacturing Licenses in New Jersey?

The Cannabis Regulatory Commission does not differentiate manufacturing licenses in the state pursuant to New Jersey Administrative Code 1730: Personal Use Cannabis. Manufacturing establishments are required to obtain a state-issued manufacturing license. The manufacturing license is the same regardless of the manufacturing establishment’s production methods, types of chemicals used for extraction and post-processing, or whether the establishments are in shared or single-use facilities.

However, New Jersey issues different types of cannabis manufacturing licenses based on other factors such as facility and business sizes, target marijuana market, and special-interest groups. The state has a conditional manufacturing license granted as a pre-qualification for its standard manufacturing license. Its ATC (Alternative Treatment Center) license may also allow cannabis manufacturing but for medical cannabis dispensaries and patients. Lastly, New Jersey has a microbusiness license for small businesses with fewer than 11 employees who may seek permission to engage in cannabis manufacturing.

Does New Jersey Require a Separate License to Manufacture Edibles?

No, New Jersey does not require a separate license to manufacture edibles. Marijuana edibles can only be used for medical purposes by persons with qualifying medical conditions. Hence, they must be dispensed to these patients with prescriptions. The law only permits marijuana edibles to be made in the form of pills, capsules, drops, chewables, lozenges, syrups, tablets, or oil.

How to Get a Cannabis Manufacturing License in New Jersey

A manufacturing establishment may apply to the Cannabis Regulatory Commission to obtain a manufacturing license in New Jersey. All cannabis manufacturing must take place in an enclosed and secure facility and be overseen by a qualified manufacturing supervisor. The New Jersey Cannabis Regulatory Commission is responsible for issuing licenses for marijuana cultivation, manufacture, and sale in the state. The New Jersey Administrative Code 1730 Personal Use Cannabis provides that Alternative Treatment Centers (ATC) applying for Class 2 Cannabis Processor licenses should submit the following:

• A letter of intent informing the CRC of the licenses sought by the ATC
• Municipal approval for a processor's license, which shall include:
  • 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
  • The ordinance(s) adopted by the municipality authorizing the operation of a Class 2 Cannabis Processor license being sought by the ATC. In the absence of any, a statement declaring that no municipal ordinances are prohibiting the Class 2 Cannabis Processor 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 signed by a bona fide labor organization indicating that the ATC has entered into a labor peace agreement with such bona fide labor organization.
• 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 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.
• 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.
• A criminal history background check of each owner, principal, employee, or volunteer associated with the proposed cannabis business. These persons will be required to fund the background check based on the fees specified by the Division of State Police. Applicants shall be disqualified if the background check reveals that they have been previously convicted of drug-related crimes, fraud, etc.

In addition to the above, the CRC will require the applicant’s information and some documents created in the planning phase. These include:

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

After submitting the required documents, the Cannabis Regulatory Commission may request any other information to determine whether to accept the ATC’s certifications. The CRC is yet to release a Class 2 Cannabis Processor license application form. When it is available, it will be uploaded on the Cannabis Regulatory Commission website. The CRC may be reached via email at crc.info@crc.nj.gov.

If the application is from an Alternative Treatment Center seeking expansion, the CRC will also evaluate the following:

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

After examining an ATC’s application, the CRC may issue a written notice of its approval to an expanded ATC if:

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

An Alternative Treatment Center seeking expansion will be required to request an onsite assessment after the completion of any necessary construction or preparation of the expanded ATC. The assessment ascertains that the premises, operations, and procedures are consistent with the ATC’s application and compliant with the Act. If the application is denied after the assessment, the CRC shall provide the denial to the ATC in writing. It shall include:

• Notice of the denial of the expanded ATC in which 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.

While the CRC typically has a binding decision on every application for an expanded ATC, an applicant may seek a judicial review by the Appellate Division of the Superior Court.

How Much Does a Cannabis Manufacturing License Cost in New Jersey?

The fee schedule for all cannabis processor licenses in New Jersey is as follows:

• Up to 10,000 square feet – $20,000
• More than 10,000 square feet – $30,000
• Microbusiness - $1,000
• Medical cannabis manufacturer expansion - $300,000

Applicants are required to pay licensing fees as soon as their applications are approved. Licensing fees will also be due every year the application is renewed. In addition, the fee paid during application submission and the approval fees will be deducted from the licensing fee paid for the first year of operation.

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

After the CRC approves the application, applicants will be required to pay approval fees. However, if the application is denied, the submission and approval fee will not be necessary; they will be refunded. ATC applicants seeking expansion are to pay the Expanded Certification Fees when they ATC submit the required certifications to the CRC.