In a busy gathering for the New Jersey Cannabis Regulatory Commission last Thursday, the commission approved and formally proposed three new license types – Class 3 Cannabis Wholesalers, Class 4 Cannabis Distributors, and Class 6 Cannabis Delivery Services.
The proposed new license types will be approved in August, after a public review period. The CRC did not say when the application window would open.
Since New Jersey’s cannabis industry is not vertically integrated, applicants looking to break into the market will have to decide if they want to pursue growing and processing or distribution, delivery, and wholesale.
According to state officials, here are a few key points on what the proposed licenses can and cannot be used for:
Class 3 Cannabis Wholesalers can:
- Purchase usable cannabis, cannabis products from another cannabis wholesaler cultivator or manufacturer for the purpose of resale to another wholesaler, manufacturer or retailer
- Store and warehouse company and they can transport usable cannabis and cannabis products to a wholesaler manufacturer or retailer
Class 3 Cannabis Wholesalers cannot:
- Cultivate or package cannabis on their own
- Produce manufacture cannabis products and they cannot transport transfer sell cannabis or cannabis products or paraphernalia directly to a consumer for class for distributors
Class 4 Cannabis Distributors can:
- Transport unusable unusable cannabis between cultivators and manufacturers
- Transport usable cannabis and cannabis products between other cannabis establishments
- Possess and engage vertical storage of unusable unusable cannabis
Class 4 Cannabis Distributors cannot:
- Cultivate, manufacture or package cannabis or cannabis products
- Sell cannabis products paraphernalia directly to consumers
- Purchase or resell cannabis products
Class 6 Cannabis Delivery Services can:
- Obtain cannabis items cannabis paraphernalia and related supplies from a cannabis return to deliver to a consumer
- Transport that usable cannabis and cannabis products directly to a consumer
- Return sold usable cannabis and products and paraphernalia back to its originally originating cannabis retailer
Class 6 Cannabis Delivery Services cannot:
- Cultivate, package, or manufacture cannabis products
- Transport, transfer, or sell cannabis products or paraphernalia to other cannabis businesses other than a return to the retailer where the purchase order was filled
- Store any cannabis or cannabis products at their administrative office
State officials also moved to expand flexibility for New Jersey Microbusinesses, by clarifying that areas like break rooms and bathrooms do not count toward the 2,500 square foot limit established by the law. They also codified sales limits for recreational consumers – 1 ounce of cannabis flower, 4 grams of extracts or concentrates, or 1,000 mg of THC in edible form and moved to require retailers to provide information to consumers on safe cannabis use with the purchase of adult-use cannabis products.
State officials also moved to establish a Social Equity Excise Fee of ⅓ of 1% of average retail price $1.10 per ounce in Fiscal Year 2022, which is projected to amass $191,250 in Fiscal Year 2022 and $3.5 million in Fiscal Year 2023.
Although the Governor and Legislature will ultimately decide where the funding goes, the CRC can make recommendations for spending.
“We recommend investing the funds in grants and low-interest loans for aspiring entrepreneurs in impact zones and economically disadvantaged areas, or areas with other economic designations,” CRC Executive director Jeff Brown said.
The CRC also released data on the demographic makeup of conditional licenses to date, and the breakdown of racial and ethnic groups represented. As of June 9th, the majority of conditional licenses are not diversely owned.Here are some of the numbers from the state. You access the full presentation here.