NJCRC Issues 81 Licenses, Discusses New Rules, Financial Assistance

The NJ Cannabis Regulatory Commission (NJCRC) approved 81 adult-use cannabis licenses and announced the highlights of permanent regulations.

NJCRC Executive Director Jeff Brown announced that of the 81 New Jersey adult-use cannabis licenses won, 41 percent were standard size, and 15 percent were microbusinesses. That included 22 Cultivation, 11 Manufacturing, and 48 Dispensary Licenses.

NJ Conditional Adult-use Cannabis Winners

Progress

“I am happy to see we are chugging through the applications,” NJCRC Chair Diana Houenou said.

There have now been 229 New Jersey adult-use cannabis license issues and 56 medical cannabis licenses issued for a total of 285, with several adult-use companies holding both cultivation and manufacturer licenses and some medical cannabis dispensaries with adult-use licenses.

Brown noted that 1200 adult-use cannabis license applications had been received. Only 350 applications have not gone through initial review.

“Staff is moving this as fast as possible,” he said.

Application Issues

Brown said more applicants are being told they need to redo their paperwork than winning. He said they have guidelines on their website.

“We’re seeing a number of applications attesting to designation without submitting the proof of their social equity business,” Brown said.

Or they applied without including the certification they are officially a Minority and/or Woman-owned business by the State.

“You need to have the requisite information to prove your priority,” Brown said. “They are able to process certifications pretty quickly. Come to us when you’re ready to apply. There are a lot of applicants waiting to hear one way or another. It’s the summer of licensing.”

The next NJCRC meeting on July 28^th, Peruvian Independence Day, will likely have many more licenses announced since there is no meeting scheduled for August. That, of course, is subject to change.

Brown noted conditional conversion applications are under review. This means that some conditional license award winners have applied for a full or annual license.

During previous adult-use cannabis license award announcements, 11 dispensaries, 92 cultivation, and 45 manufacturing New Jersey adult-use licenses were awarded. Among those, 64 percent are Social Equity businesses, Brown said. Sixty of them are micro-businesses. A significant amount of them are Black and Hispanic-owned.

“Congratulations to Hillview Med. They were issued the first permit from the 2019 RFA. They hold the record for the fastest implementation. That’s the first of many to come in the future,” Brown said, referring to one of the winners that won a medical cultivation license after an ultimately 29-month process. From the time Hillview Med won in October to June was eight months.

New Permanent Rules Announced

The process for the permanent regulations was outlined by Brown. The interim regulations were adopted last year to be in place for about a year. They were said to codify the interim regulations largely.

NJCRC Chief Counsel Christopher Riggs said they also include the rules for wholesalers, distribution, and delivery services.

Brown said they want to ensure those with past convictions get a leg up.

“We have some of the lowest application fees in the county,” he said.

They want to expand flexibility for microbusinesses. Brown specifically clarified that bathrooms and breakrooms don’t count for their limited 2500 sq ft. They also want to enforce purchase limits.

“As the retail price of cannabis, the excise fee on cultivation per oz will increase as per this fee schedule,” he noted.

Feedback is encouraged.

Riggs explained the interim rules are set to expire on August 19^th but could be extended to be in effect till February 15, 2023. The rules will be published on August 1^st. The Public Comment period will also open that day and closes on September 30^th.

“The regulations are just another milestone for the CRC,” Riggs said.

They did not mention manufacturers being allowed to make a range of edibles that were excluded from the interim rules to the dismay of many. Brown has noted the NJCRC is working with the NJ Department of Health on kitchen safety standards for edibles.

The rules passed unanimously 5-0.

Funding Cannabis Companies & Uses of Adult-use Cannabis Revenue

NJRCRC Vice Chair Sam Delgado noted Social Equity Excise Fee revenue is being collected on adult-use cannabis purchases. The money needs to be stored in a fund the NJCRC manages. Fifteen percent needs to be dedicated to underage deterrence of the use of cannabis.

“It is a flat fee on cannabis sold in the market,” he explained.

It is set at 1/3 of 1 percent of the avg price of cannabis which amounts to 1.10 per oz.

“The Commission is prioritizing financial assistance as a key recommendation,” he said.

Delgado noted the challenges involved in access to capital and the need to assist applicants, especially by geographically targeting regions and communities most negatively impacted by cannabis convictions.

“The Cannabis Regulatory Commission recommends investing the fund in grants and low-interest loans for entrepreneurs from Impact Zones and EDA or urban enterprise zones,” he said.

He noted that financial assistance could help with the substantial expenses, including rent, mortgage, and utilities.

“We are recommending funding a housing component for first-time homebuyers for those most harmed by the War on Drugs,” Delgado added.

Hearings on Spending Tax Revenue

Delgado noted regional meetings were held on how the money should be held on where the money should be spent. The four major themes heard during those meetings were economic development, justice reinvestment, public health, workforce development, and education.

He noted many advocates noted that police arrest minorities disproportionately arrest more minorities than Whites, and many do not wish the money to go to law enforcement. However, they are required by law to fund underage deterrence, Delgado noted. They also want to help felons reenter society and fund Public Health programs as well as Harm Reduction Services. They are also recommending funding youth Centers for tutoring and after-school programs.

Money will also go to workforce development, including job training, scholarships, apprenticeships, financial literacy, and business classes.

Delgado noted cannabis is a growing industry to get a job in.

About $192,000 was generated from the sales of adult-use cannabis from April 21st to June 30th, the end of the Fiscal Year for New Jersey.

“There is still a significant need to support our cannabis industry. The social excise fee is just a small start,” Commissioner Charles Barker said. “The Governor and the legislature recognize the significant capital necessary to sustain a cannabis business. I sincerely hope both branches consider more money for it.”

He spoke positively of the bill by NJ Senate President Scutari to ensure the NJ Economic Development Authority (NJEDA) dedicates a portion of the money to helping certain cannabis companies in Impact Zones.

Barker said they will monitor the allocation of funds to ensure the industry “reflects our homegrown diversity of the Garden State.”

The report was approved 4-1, with Barker voting no.

NJCRC Budget

Brown explained the NJCRC’s budget will amount to $17 for the Fiscal Year 2023 starting tomorrow. That’s up from $10 million last year. $11.5 million is set to be spent on staff, $2 million on infrastructure, $2 million on worker education, $1 million on software, and half a million on communication and outreach.

They have gone from six people of the 5 NJCRC Commissioners and Brown to 50, he noted. With more money, personnel expansion will continue to speed up application review.

They also want to put more funding toward their working groups to address access to capital, business development, and worker education. There is also a promised increase for the Office of Diversity & Inclusion, headed by Wesley McWhite III.

“Great to see the budget proposes funding for several initiatives. This commission has … put in a lot of work, into you know, creating efforts to increase equity and representation in this industry. We hope to see funding put towards those efforts,” Houenou said.

“The CRC is moving our public meeting to in-person starting this fall starting with our September 22nd meeting. The regular meetings will be held in person,” she added.

Details are forthcoming.