New Jersey Regulatory Update
This article was originally posted by RDC here.
New Jersey’s Cannabis Regulatory Commission (CRC) is in the process of cannabis business licensing, with cultivation and manufacturing applications accepted as of December 2021 and the acceptance of cannabis retail applications starting on starting on March 15. Despite delays, personal use sales are still expected to begin within the first half of 2022.
While the state’s existing medical cannabis market has remained small due to license caps and scoring delays, the program has still produced an estimated $300 million in legal sales. The legalization of personal use cannabis is expected to increase the market size and value, and within the first 12 months of legal personal use sales, New Jersey’s combined medical and personal use markets could generate as much as $1.5 to $1.8 billion.
Though 67% of voters supported personal use cannabis legalization, nearly 400 of New Jersey’s 565 municipalities have opted to ban all cannabis business types. Despite this, most major cities have ‘opted in’ to allow personal use cannabis businesses, including Jersey City and Atlantic City, and more municipalities will likely come on board as the personal use market in the state matures.
Like any new legal cannabis market, the CRC has developed regulations and is establishing methods of verifying compliance to ensure the security and safety of the industry – beginning with the New Jersey Administrative Code and the cannabis business application.
Prospective business owners in New Jersey will need to demonstrate their commitment to compliance through written plans and SOPs, as well as site plans and floor plans submitted to the CRC. A letter of approval from the municipality in which they intend to operate will also be required prior to receiving state licensure.
Compliance for Site and Floor Plan Design
Since site plans and floor plans are required to win a cannabis business license in the State of New Jersey, prospective cannabis business owners should consult with experienced architects and designers to help with creating their application submission. In addition to regulations for all cannabis businesses, the New Jersey Administrative Code lists further requirements specific to license type.
Cannabis businesses must also take into account any laws or requirements that govern that business type under the International Building Code, as well as fire codes, zoning laws, ADA Standards for Accessible Design, and any other laws regulating business design and construction.
In addition to regulations regarding the layout and construction of a New Jersey cannabis business, the state has enacted laws that limit where these facilities can be legally located. In New Jersey, cannabis businesses are restricted from being located within close proximity to churches, synagogues, temples, or other places used exclusively for religious worship, as well as schools, playgrounds, parks, or child daycare facilities.
In compliance with state law, if operators intend to lease property for their New Jersey cannabis business, they must first obtain certification that the landlord is aware that the premises will be used as a licensed cannabis business. Zoning approval must also be obtained by local officials and any change or modification of the premises must be reported to regulators.
Class 1 – Cultivators
Though all cannabis businesses are required to identify the square footage available and provide descriptions of the functional areas of the cannabis business, businesses that engage in cultivating cannabis have additional square footage requirements with which to comply.
Businesses such as cultivation facilities and microbusinesses are limited in the square footage of the area used for cannabis plant grow canopy. If the square footage on the floor plan does not adhere to this restriction, applications will likely be denied, and it could be a while before the CRC reviews a resubmission.
Most cannabis cultivation will likely take place indoors since New Jersey’s cooler climate does not easily facilitate multiple harvests. Additionally, since state law requires that all cannabis cultivation takes place in an enclosed, locked area, or facility, this prevents cultivators from growing cannabis in open fields. Those that do wish to cultivate cannabis outdoors will need to make use of a lockable greenhouse or similar to adhere with regulatory requirements.
Class 5 – Retailers
Prospective cannabis business owners must ensure their site and floor plan designs are compatible with state and municipal law, as well as ensuring that the designed layout encourages a positive customer experience and successful operation. In New Jersey, the site plan and floor plan of the are required to be designed in such a way that access to the cannabis business is well-controlled.
While this is easy for cultivators and manufacturers who do not allow access to the public, a retailer must design their business in a way that facilitates access-control, while still remaining welcoming to customers. This may be done through the use of a comfortable lobby or waiting room where customers can have their identification verified before being allowed access into a locked retail area.
Retailers in the state will also be required to adhere to additional regulations that prohibit the cannabis business premises from being located in or upon the premises of specific businesses, such as grocery stores, delicatessens, indoor food markets, or other stores that engage in retail sales of food or alcoholic beverages.
New Jersey will allow retailers to conduct curbside sales once personal use licenses have been awarded. Retailers intending to offer curbside sales of cannabis should ensure that the parking spots and area designated for this purpose is identified on the site plan and floor plan submitted in the application.
