The New Jersey Economic Development Authority (NJEDA) recently approved a $15 million pilot program to bridge capital access gaps for adult-use cannabis cultivators, manufacturers, and testing laboratories only.

The New Jersey Lending for Equity, Access, and Financing (NJ LEAF) Program will provide low-cost financing of up to $1.5 million to eligible cannabis companies.

NJ LEAF Cannabis Loan Program

According to the NJ-EDA, the NJ LEAF Program will provide flexible lending options for both fixed assets and working capital. The idea is to help eligible businesses grow and stabilize their operations in New Jersey.

Fixed asset loan amounts will range from $100,000 to a maximum of $1.5 million, and working capital support loans will go from $100,000 to $500,000.

The funding options offer valuable resources for businesses to invest in property, upgrade equipment, and cover day-to-day operational expenses.

“New Jersey is building an equitable cannabis market by supporting every link in the supply chain,” NJEDA CEO Tim Sullivan argued.

 “NJ LEAF will ensure companies that are cut off from traditional financial resources have access to the capital needed to succeed, helping to create jobs, strengthen communities. And solidify New Jersey’s long-term growth as a national leader in the cannabis market,” he added.

“New Jersey’s continued investment into this strategic sector is unlocking much-needed resources for diverse entrepreneurs, helping create jobs and strengthen communities,” NJEDA Chief Community Development Officer Tai Cooper said.

NJEDA Loan Details for Certain Cannabis Operators

Eligible businesses must hold a valid adult-use cannabis Cultivator, Manufacturer, or Testing Laboratory license issued by the New Jersey Cannabis Regulatory Commission (NJCRC).

In addition, businesses must be based in New Jersey, employ fewer than 250 full-time employees. Also, they must have operated for at least one calendar year with annual gross revenue of $5 million or less.

Only five percent of funding under the program will be set aside for businesses located in Impact Zones. They are areas designated by statute that were disproportionately impacted by cannabis prohibition. Most of the Impact Zones are in inner city neighborhoods where the number of arrests was high.

“It has been heartening to see the NJEDA’s commitment to financially supporting New Jersey’s cannabis entrepreneurs,” said NJCRC Chair Dianna Houenou.

“Our applicants and operators face obstacles that are unique to the industry without access to the financial tools available to other business owners,” she explained.

“I am grateful that NJEDA, with NJ LEAF and its grant programs, are attempting to close that gap,” Houenou added.

Hopefully it’s a successful attempt.

In May, the NJEDA approved the $5 million Cannabis Business Development (CBD) Grant Program. It was supposed to provide targeted financial support of up to $75,000 to eligible recreational cannabis entrepreneurs. The money was supposed to help alleviate and manage the cost of ongoing State and local compliance, as well as operating expenses.

In a press release, the NJEDA said it is “committed to making New Jersey a national model for inclusive and sustainable economic development.” They want to focus on strategies to help build dynamic communities and create good jobs for New Jersey residents. They also want to provide pathways to a stronger and fairer economy.

For more information on eligibility and funding uses, visit www.njeda.gov/nj-leaf or email businessbanking@njeda.gov.

NJ Cannabis Capital/Money Issues

Many companies have a problem accessing capital or money. Some minority and female serial entrepreneurs have the assets and income from other businesses to get a loan. But marijuana is a Schedule I Narcotic which complicates everything.

So, the NJEDA is trying to make progress when many recognize the difficulty of the situation of fostering an industry that is federally prohibited.

The NJEDA’s new cannabis program follows their Seed Equity and Joint Ventures Grant Programs. They have delivered nearly $14 million. According to them, the NJEDA has supported 40 cannabis businesses across New Jersey to date that have opened.

In its first try, the NJEDA gave out loans to women and minorities from out of State who had businesses. It unfortunately and perhaps unintentionally was at the expense of many local minority and women-owned businesses. Some of those who did not get it likely could not open.

Some of them likely gave up on their dream without the grant.

It is unclear who got the grants designed for Social Equity in the second program. The NJEDA refused to release the list of winners and seemed to have sworn some winners to omerta silence.

So unfortunately, Heady NJ cannot call that effort successful.

In their defense, no other legal cannabis state has launched a similar program that can be said to be flawless.

Making Legitimate Efforts Toward Progress

However, the NJEDA might be sincerely trying to address an issue many realize is a significant problem. It is noteworthy and admirable that they sent staff to the cannabis industry convention NECANN to maintain a booth and speak on a panel to promote their services.

The efforts do go well toward showing that it was not the State’s intention under Governor Phil Murphy (D) for a few large corporate Multi-State Operators (MSOs) and opportunists to set prices and dominate the NJ cannabis industry.

Because many cannabis advocates and entrepreneurs have been skeptical.

For example, the Hispanic disabled veteran Dr. Alyza Brevard Rodriguez of the Other Side dispensary of Jersey City was very critical of the State and their efforts at last week’s NJCRC meeting.

She isn’t the only one.