How to Open a Dispensary in New Jersey

Posted on April 28th, 2022 to Entrepreneurialism

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

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.

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

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