How to Open a Dispensary in New Jersey: Operating & Marketing in NJ

Posted on April 28th, 2022 to Dispensary Marketing

After a vote to legalize adult-use cannabis in the state of New Jersey in 2020, The Garden State is well on its way to offering both medical and recreational cannabis. The Cannabis Regulatory Commission (CRC) is already up and running, and now’s a great time to jump in with a new dispensary.

As it is in most states, opening any kind of cannabis business in NJ requires some serious planning and forethought. From getting to know the evolving laws to securing funding, you have a few steps that have to be taken in the process. Here’s a closer look at how to open a dispensary in New Jersey to get you off to a good start.

First off, What Does it Cost to Open a Recreational Cannabis Dispensary in NJ?

According to NJ.gov:

“All fees are nonrefundable unless otherwise indicated by the Commission. Failure to pay the required fee at the designated time will result in denial or revocation of the license. Payment must be submitted as a certified check or money order, made payable to “Treasurer, State of New Jersey.” 

Please note: NOTE: Submission fees are due at the time an application is submitted. Approval fees are due upon Commission approval for licensure to operate. Applicants who are denied approval for licensure are not required to pay approval fees. Expanded ATC Certification Fees are due at the time the ATC submits its required certifications to the Commission.” – NJ.gov

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Application & Certification Fees For NJ Cannabis Businesses:

Application Submission Fee:

  • Conditional License Applicant:
    • Standard Business: $200
    • Microbusiness: $100
  • Annual License Applicant:
    • Standard Business: $400
    • Microbusiness: $200

Approval Fee:

  • Conditional License Applicant:
    • Standard Business: $800
    • Microbusiness: $400
  • Annual License Applicant:
    • Standard Business: $1,600
    • Microbusiness: $800

Conditional Conversion Submission Fee:

  • Conditional License Applicant:
    • Standard Business: $200
    • Microbusiness: $100
  • Annual License Applicant:
    • Standard Business: N/A
    • Microbusiness: N/A

Conditional Conversion Approval Fee:

  • Conditional License Applicant:
    • Standard Business: $800
    • Microbusiness: $400
  • Annual License Applicant:
    • Standard Business: N/A
    • Microbusiness: N/A

Testing Laboratory Application Submission Fee:

  • All applicants: $400

Testing Laboratory Approval Fee:

  • All applicants: $1,600

Expanded ATC Certification Fee

  • Medical Cannabis Cultivator Expansion – $400,000
  • Medical Cannabis Manufacturer Expansion – $300,000
  • Medical Cannabis Dispensary Expansion – $100,000
  • Vertically Integrated ATC with 1 dispensary – $800,000
  • Vertically Integrated ATC with 2 dispensaries – $900,000
  • Vertically Integrated ATC with 3 dispensaries – $1,000,000

To learn more about other NJ marijuana businesses and their associated fees, check out this doc from NJ.gov.

How to Open a Dispensary in New Jersey

Opening a dispensary can vary depending on whether you intend to open a medical or adult-use dispensary. Medical dispensaries can require a few added steps because NJ treats these dispensaries as Alternative Treatment Centers (ATCs). You can find in-depth information about opening an ATC and applying for the necessary licensing by reading through the Division of Medical Marijuana Request for Applications manual published by the NJ Department of Health (NJDOH).

In NJ, the CRC has also published a 160-page report of rules and regulations that covers a great deal about how to open an adult-use dispensary in NJ. If you’re serious about getting into the business, this is a good place to start. In general, it can be a little easier to open an adult-use dispensary, even though both objectives require several steps along the way, an adequate amount of funding, and a lot of planning.

One thing to note, NJ has not set limits on how many applications it will accept or approve for recreational dispensary licenses, but that is a real possibility in the future. The CRC began accepting applications on March 15th, 2022.

1. Get familiar with NJ and local cannabis laws

Anyone planning to open a dispensary in NJ should first take the time to read through the laws set forth by either the CRC or the NJDOH, and possibly both. It is also important to find out the ordinances in the specific area where you are located. All ordinances have the opportunity to “opt-out” of recreational cannabis, and as many as 400 ordinances have done so already.

Other than local ordinances, NJ has a relatively well-established cannabis program, so there are a lot of laws, regulations, and prohibitions in place that outline things like:

  • Where a dispensary can be located
  • What type of technology the physical business must have in place, such as an inventory tracking system
  • Who can be approved for a cannabis business license
  • How the dispensary should be managed
  • How you can legally market your dispensary
  • What types of products are allowed as inventory

NJ has some unique rule sets for cannabis businesses as well that should be reviewed. For example, the state prioritizes businesses in zones unfairly impacted by prior cannabis laws and has rules in place to prioritize businesses that are diversely owned. In addition, cannabis businesses must provide educational materials to customers, connect with local communities, and control odors at their place of business.

2. Create a business plan for your NJ dispensary

Draft a detailed business plan for your dispensary. When you apply for your license through the CRC, one requirement is that you offer an in-depth business plan. Therefore, make sure your plan offers information on:

The physical location of the business

  • How the business will be funded
  • The general inventory fulfillment plan
  • The potential revenue of the business
  • How you will staff the business
  • Diversity and equity objectives
  • Plans for marketing your dispensary

3. Secure capital for the new business

Opening a cannabis dispensary in NJ can be a costly endeavor, and traditional funding from public institutions may not be an option. Therefore, you will have to come up with a plan for funding the opening of the business. You may have to look at personal loan options, venture capital options, or even capital brokers to find the funds you need. Remember, in order to complete your application to obtain a cannabis business license, the CRC does require that you show proof that you have the funding to support the opening of the business.

4. Submit your application for a cannabis license

In total, there are six types of licenses available through the CRC, even though most prospective dispensary owners will only need a cannabis retailer and potentially a cannabis delivery license. Several contingencies must be met when you decide to apply for a cannabis business license in the state of New Jersey. For one, at least one owner of the intended business must have been a resident of NJ for at least two years. Other requirements include:

  • Submitting for a background check verification
  • Submitting both a business and business funding plan
  • Submitting the prior year’s tax returns
  • Submitting personal history disclosures and entity disclosure forms
  • Paying the required application fees upon submission ($200 for standard cannabis business)
  • Submitting a Social Equity Business attestation if applying for points for being a socially Equitable Business

If an application is approved, you will then be responsible for paying the approval fee of $800 and then the licensing fees, which are covered more in-depth below. It should be noted that applying for a license as a medical cannabis business does differ from the standard licensing process. Fees for applications can also be more expensive.

Types of Licenses Available in NJ

As noted above, NJ offers six primary classes of licenses for adult-use cannabis dispensaries. Below is a look at each of those licenses:

  • Class 1 Cultivator License – Up to $50,000; Allows for the cultivation of cannabis plants
  • Class 2 Manufacturer License – Up to $30,000 – Allows for the manufacturing of cannabis products
  • Class 3 Wholesaler License – Allows you to store, sell, and transfer recreational cannabis between retailers
  • Class 4 Distributor License – Allows you to transport bulk quantities of cannabis products between other entities
  • Class 5 Retailer License – $10,000; Allows you to purchase inventory from licensed entities and sell them in a retail store.
  • Class 6 Delivery License – Gives you the ability to transport cannabis purchases from the retailer to the purchasing consumer

Conditional licenses are also available, which allow business owners to work toward expanding the operations of their business. For example, if a retailer wants to also transition into manufacturing products, they would need a conditional license.

Stand Out with the Best Dispensary Marketing

Once you get your approval to open a dispensary in NJ, it will be time to forge ahead with getting your name out there. We can help you build a comprehensive digital marketing plan, which includes everything from email marketing to dispensary SEO. Reach out to us at CannaPlanners to get started.

Even though it has taken a bit for the state’s Cannabis Regulatory Commission to set the rules for marketing your dispensary in New Jersey, some guidelines are now in place. As you get your NJ dispensary up and running, there’s no better time than now to get your name out to the masses. Below is an overview of what you’ll need to know about marketing and advertising cannabis in NJ.

Marketing your Dispensary in New Jersey

The guidelines for advertising and marketing can always be expanded and revised. As of May 2022, NJ has nailed down six key areas as part of Section 17:30-14.2 – General Advertising Requirements and Prohibitions.

1. Age-Related Restrictions

Any cannabis dispensary is allowed to advertise to the public. However, the advertisement for the business or cannabis products or paraphernalia must be done in a way that is not intended to engage minors. The dispensary must have reliable evidence that no less than 71.6 percent of the ad’s audience is 21 years old or older.

The laws further state that ads cannot target or appeal to people under the legal age. Therefore, ads cannot:

  • Depict anyone under 21 using cannabis or cannabis-related products
  • Include anything that would appeal to someone under the age of 21, such as characters, toys, or cartoons
  • Be offered in any form within 200 feet of elementary or secondary school properties
  • Placed at or in connection with sports, artistic, social, or other events unless less than 20 percent of the audience is expected to be underage
  • Placed in an arena, shopping mall, fair, or stadium that receives allocations from the state of NJ unless the site is considered to be an adult-only place with no entry of anyone under the age of 21

2. Required Warnings

All ads for either cannabis products or paraphernalia must contain the following warning, verbatim:

“This product contains cannabis. For use only by adults 21 years of age or older. Keep out of the reach of children. There may be health risks associated with the consumption of this product, including for women who are pregnant, breastfeeding, or planning on becoming pregnant. Do not drive a motor vehicle or operate heavy machinery while using this product.”

3. Licensure Statements

The Commission requires that any advertisement the cannabis business offers states clearly that the business is licensed to operate in the state by the State of New Jersey.

4. General Advertising Restrictions

Marketing your dispensary in New Jersey is further complicated by a few other restrictions and prohibitions. Key points to remember with general advertising include:

  • No radio or TV advertising between 6 a.m. and 10 p.m.
  • No location-based advertising
  • No mobile advertising can be sent to cell phones unless there is an app the owner of the device specifically downloads that gives them access to easy opt-out functions; mobile apps must feature the warning that access is restricted to people 21 and older
  • No falsely disparaging products sold by another cannabis business
  • No suggesting that cannabis use is safe because they are regulated or have gone through testing
  • No promoting rapid or overconsumption of cannabis products
  • No deceptive or misleading advertising, which includes touting one brand or product as better or misusing favorable information from inadequate studies

5. Location-Based Advertising Restrictions

Dispensaries have guidelines to follow when it comes to certain aspects of location advertising, right down to how the prices are offered. The general guidelines state that a business cannot:

  • Display external signage on the building that advertises cannabis or cannabis brands or anything other than the location’s name
  • Display signage that is not in compliance with any ordinances in place by local authorities
  • Have a commercial mascot outside their business
  • Make either cannabis or cannabis paraphernalia inside the dispensary visible to the public outside
  • Post a billboard advertisement on the property

Dispensaries also cannot advertise prices except via a printed catalog or list inside the dispensary or on the dispensary website.

Cannabis businesses are also not allowed to create either promotional gifts or items that portray symbols related to cannabis or references to cannabis. Cannabis paraphernalia sold in the store is not included in this restriction.

6. Advertising Records

Cannabis businesses are required to keep records to prove their advertising efforts have met the requirements set forth by the NJ Cannabis Regulation Commission. The records should cover:

  • A description of the reasonably expected audience
  • A list of all advertising publications
  • A list of every venue used for advertising

To keep your dispensary out of hot water, be sure to keep these records in a detailed way, so they can be produced as requested by the Commission.

Stay Compliant Marketing Your Dispensary in New Jersey

Need help navigating the tricky task of marketing your dispensary in New Jersey? CannaPlanners helps you grow your brand with top-notch website design and marketing services. Feel free to reach out to us to get the conversation started.

Read Next: Full Guide to Dispensary Marketing

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This post was written by Zach Santarsiero, CMO at CannaPlanners.

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