Ohio has legalized recreational cannabis. Click HERE to learn more about cannabis business opportunities in Ohio.

How To Open A Dispensary In New Jersey
(2024 Complete Guide)

Table of Contents

Overview

Are you wondering how to open a cannabis dispensary in New Jersey? This page is dedicated to keeping you up to date on the latest news and information relevant to opening a cannabis business in New Jersey. This includes helpful insights on what is next to come for the state. 

Cannabis legalization in New Jersey has been a significant journey, marked by several key milestones. The process gained momentum in November 2020 when New Jerseyans overwhelmingly approved a ballot referendum, known as New Jersey Public Question 1, with 67% support. This referendum was crucial, especially after the state legislature’s unsuccessful attempt to legalize cannabis during its 2018-19 session. As a result, the amendment to the state constitution legalizing cannabis became effective on January 1, 2021.

However, the journey was not without its challenges. On February 19, 2021, the Senate Judiciary Committee advanced A.5342, a bill addressing penalties for underage cannabis use. This was a critical step, as disagreements over underage penalties had previously delayed the effective date of legalization from January 1 to February 22. Finally, on February 22, 2021, New Jersey officially became the 14th state to legalize cannabis for adults over 21. Governor Phil Murphy signed three pivotal bills (S.21, S.2535, and A.5342) into law, marking the culmination of a three-year campaign to regulate and tax cannabis. This legislative action followed the December 2020 passage of legislation creating a recreational marketplace.

The NJ Cannabis Regulatory Commission (CRC), established by the CREAMM Act, was launched on April 12, 2021, to regulate both the Medicinal and Recreational Cannabis Programs. By August 19, 2021, the CRC had adopted its first set of rules for adult-use cannabis, and by December 15, 2021, it began accepting adult-use cannabis license applications.

The year 2022 marked a significant advancement in the cannabis market in New Jersey. In March, the CRC approved licenses for seven alternative treatment centers, allowing sales of adult-use cannabis products to adults 21 and older without a medical card. The highlight came on April 21, 2022, when the adult-use cannabis market officially opened. Thirteen dispensaries began operations, and nearly $2 million in cannabis products were sold on the first day, signaling a robust start to the legal cannabis market in the state.

Continuing its regulatory role, the CRC amended and readopted its rules for cannabis regulation on March 7, 2023, reflecting the evolving landscape of cannabis regulation in New Jersey. For additional details on cannabis regulation in New Jersey, please explore the Laws and Statutes and Resolutions pages.

On May 8, 2023, New Jersey’s Governor, Phil Murphy, signed a bill into law that allows licensed cannabis companies to deduct certain business expenses on their state tax returns. This new legislation separates New Jersey’s tax laws from Section 280E of the federal tax code.

On June 1, 2023, the Cannabis Regulatory Commission decided to prioritize social equity applicants for specific licenses, including those with previous marijuana-related convictions and individuals from economically disadvantaged regions. However, after facing criticism that this approach might exclude other affected entrepreneurs, the commission later limited the priority period to three months for social equity applicants and three months for diverse-owned cannabis businesses, as of July 18, 2023.

On October 3, 2023, New Jersey announced the allocation of $12 million in grant funding to support 48 cannabis businesses, doubling the initially planned awards, thanks to additional funding from Governor Phil Murphy. This investment aims to empower entrepreneurs, particularly those from communities affected by the War on Drugs, in establishing and expanding their cannabis ventures in the state. The initiative offers a substantial $250,000 grant, the largest of its kind in the nation, to remove entry barriers and foster social equity. 

New Jersey is considering expanding the types of edible cannabis products available in licensed shops. Currently, they only allow non-perishable items like lozenges, pills, and gummies, which is more limited than in other states. The public comment period on the proposed rules closed on December 15, 2023.

We anticipate that further information about legalization, regulations, and applications will soon become available. As new information becomes available, we will update this page to provide the most up-to-date information. 

Here is important information for those looking to start a dispensary or cannabis business in New Jersey, as it pertains to both the medical and recreational programs. 

The Opportunity Size

In New Jersey, the cannabis industry has demonstrated strong growth, with sales reaching $578 million in the first three quarters of 2023. This robust performance indicates a thriving market, and projections suggest that sales are on track to surpass $1 billion in 2024. The growth encompasses both recreational and medicinal cannabis sectors, driven by an increasing number of dispensaries and a growing consumer base, signaling a sustained expansion of the industry.

Local Cannabis Restrictions & Laws

When you are looking to open a cannabis business in New Jersey, one of the most important considerations is location. There are particular municipalities where they have implemented an outright ban on all licenses of cannabis businesses. The CRC will only license cannabis enterprises that have municipal backing and zoning approval and are operating in accordance with municipal regulations. This means you might find it a challenge to set up recreational or medical cannabis businesses here.

According to an analysis of ordinances, more than 400 municipalities in New Jersey have decided not to participate in the recreational marijuana industry. They have passed ordinances that ban cultivation facilities, manufacturers, distributors, delivery services, and dispensaries.

Only 98 municipalities passed ordinances that allowed legal weed dispensaries inside their borders. Most of them were in South Jersey and Central Jersey. More than 40 other towns in New Jersey have passed ordinances that ban dispensaries but allow some of the other five types of New Jersey cannabis businesses, like cultivation centers and delivery companies.

Here is a map of New Jersey communities that shows their opt-in status for the retail sale of cannabis, including whether they permit medical dispensaries, recreational dispensaries, and/or consumption lounges or whether they outright prohibit it.

Medical Marijuana

Medical Marijuana has come a long way in New Jersey. In 2010 the Compassionate Use Medical Marijuana Act allowed medical cannabis use for individuals with particular conditions, including cancer, glaucoma, MS, HIV/AIDS, seizure disorders, Lou Gehrig’s disease, severe muscle spasms, muscular dystrophy, inflammatory bowel disease, Crohn’s, and any terminal illness where the patient has a year or less. Eventually, from 2016 through 2017, post-traumatic disorder, migraines, Tourette’s, autism-related anxiety, Alzheimer-related anxiety, and chronic pain in particular circumstances were added to the list for use. 

In July 2019, Jake Honig Compassionate Use Medical Cannabis Act was signed into law by Governor Phil Murphy. The bill intended to create affordable and accessible cannabis medical treatment for those that need it most. This includes:

  • Allowing physician’s assistants and advanced practicing nurses to prescribe patients marijuana
  • Authorize patients to be treated for up to 1 year
  • Employer protections

 

And as it pertains to New Jersey Dispensaries:

  • Home Delivery – Approves adoption of regulations to allow dispensaries to deliver to patients
  • Price Lists – Requires dispensaries to have a price list of all their medical marijuana products listed on their website. They will not be able to deviate from the pricing listed and cannot change pricing more than once per month.

 

The Cannabis Regulatory Commission – is a state-established regulatory commission in but not of the New Jersey Department of Treasury responsible for overseeing and enforcing the medical marijuana program and its legislative regulations.

As of January 15, 2024, there are 88,670 total patients participating in the Medicinal Cannabis Program.In NJ, medical cannabis licenses are granted to what is called “Alternative Treatment Centers” (ATC), which are defined as businesses that:

  • cultivate,
  • manufacture, and/or
  • dispense medicinal marijuana and related paraphernalia to qualifying patients according to the Compassionate Use Medical Marijuana Act

 

Here are the application instructions to start a medicinal marijuana business in New Jersey. However, as of August 27th, 2019, no new license applications for medicinal marijuana are being accepted. 

Existing ATCs won’t need to fill out a complete application if they want to start competing in the recreational cannabis market. Businesses must inform the CRC of their intentions and demonstrate that they have enough supply to cover the reassuringly expected demands of medical cannabis patients. Additionally, the municipalities where they are situated will need to approve them.

Recreational Use Legalization

On November 3rd, 2020, New Jersey’s referendum on the ballot passed overwhelmingly in favor of recreational marijuana legalization. New Jersey voters voted for adult-use legalization. Here’s why:

  • In a survey, 61% of New Jersey residents favored legalization.
  • Governor Phil Murphy is very pro-legalization, calling it an “incredibly smart thing to do” and a “no-brainer.”
  • New Jersey has been hit particularly hard by COVID-19 plummeting tax revenue and increasing costs associated at the same time. Even before COVID-19, there were state tax revenue issues. These challenges will put even more pressure on the state to find ways to gain more tax revenue. NJ Marijuana legalization could provide hundreds of millions of dollars in tax revenue. 
  • Criminal justice reform has never been more popular. This puts even more pressure on the state to legalize than ever before. 

Recreational Cannabis Program Opportunities 

Adult-Use Cannabis License Types 

  • Class 1 Cannabis Cultivator License – Authorized to grow adult-use cannabis. Indoor or outdoor growing is allowed, but only with a municipality’s approval.
  • Class 2 Cannabis Manufacturer License – Authorized to grow cannabis for adult use. Cannabis must be manufactured under the supervision of a manufacturing supervisor in a secure facility.
  • Class 3 Cannabis Wholesaler License – Authorized to store, sell, or move adult-use cannabis products between cannabis cultivators, wholesalers, and retailers.
  • Class 4 Cannabis Distributor License – Authorized to transport adult-use cannabis products bulk between cultivators, manufacturers, and retailers.
  • Class 5 Cannabis Retailer License – Authorized to buy adult-use cannabis from licensed growers, manufacturers, or wholesalers and sell it to consumers. Age verification measures will be required to ensure no one under 21 can acquire cannabis, and sales will be limited to one ounce per customer.
  • Class 6 Cannabis Delivery License – Authorized to transport adult-use cannabis and related supplies from retailers to consumers.

Conditional Applications VS Annual Applications

A conditional license represents a temporary grant that provides the holder with a specific period to fulfill all the remaining prerequisites for obtaining a full annual cannabis business license. It’s important to note that one doesn’t necessarily have to start with a conditional license application; if an applicant already meets all the necessary criteria for an annual license, they can directly apply for an annual license without going through the conditional licensing process.

Key Dates and Phases in Cannabis Business Applications

If you are interested in applying for cannabis business licenses, make sure to take note of the following important dates and phases. The Cannabis Regulatory Commission (CRC) has specific timelines for accepting applications for various license classes, so be sure to mark your calendars accordingly.

 

  1. December 15, 2021:
    • CRC (Cannabis Regulatory Commission) started accepting applications for Class 1 Cultivator, Class 2 Manufacturer, and Testing Laboratory on this date.
  2. March 15, 2022:
    • CRC began accepting applications for Class 5 Retailer.
  3. September 27, 2023:
    • CRC started accepting applications for Class 3 Wholesaler, Class 4 Distributor, and Class 6 Delivery Service. These applications will be exclusively from Social Equity Businesses.
  4. December 27, 2023:
    • CRC commenced accepting applications for Class 3 Wholesaler, Class 4 Distributor, and Class 6 Delivery Service. These applications is open to Diversely Owned Businesses, while still accepting applications from Social Equity Businesses.
  5. March 27, 2024:
    • CRC will initiate the acceptance of applications for Class 3 Wholesaler, Class 4 Distributor, and Class 6 Delivery Service from all other applicants. The applications will be reviewed based on the Application Priority listed in Section V.

Requirements To Get a Cannabis Business License In New Jersey

To open a dispensary or any cannabis-related business in New Jersey, understanding the licensing requirements set by the Cannabis Regulatory Commission (CRC) is crucial. In August 2022, the CRC published its inaugural set of rules and regulations, outlining the types of cannabis business licenses, approved conduct, and associated fees.

Key to these requirements is the CRC’s point-based system for evaluating license applications, as detailed in the current recreational marijuana bill. This system scores and reviews each application based on a variety of criteria, with the CRC determining the points, categories, and distribution system. Applicants are ranked according to their total points, reflecting a comprehensive assessment of their qualifications.

The point system evaluates a range of factors to gauge an applicant’s readiness and capability to operate a cannabis business successfully. These factors include, but are not limited to:

  • Environmental Impact Plan: Assessing the applicant’s approach to minimizing their environmental footprint.
  • Safety and Security Procedures: Evaluating the measures put in place to ensure the safety of the business and its customers.
  • Cybersecurity Plan: Understanding how the applicant will protect their business from digital threats. Learn more about cybersecurity here.
  • Emergency Management Plan: Preparedness for handling unexpected situations and crises.
  • Diversion Prevention: Strategies to prevent the illegal distribution of cannabis. For more details on diversion prevention strategies, click here.
  • Sanitation Practices Plan: Ensuring cleanliness and hygiene in all operations.
  • Procedures for Reporting Adverse Events: How the business will handle and report any negative incidents.
  • Proof of Financial Competence: Demonstrating the financial stability and capability to execute the proposed business plans.

How much does it cost to open a dispensary in New Jersey?

The costs to open a dispensary in New Jersey include:

  • Adult-use dispensary:

Type of Fee

Standard Business

Microbusiness

Licensing fee

$10,000 

$1,000

Application submission fee

$200 (conditional), $400 (annual)

$100 (conditional), $200 (annual)

Application approval fee

$800 (conditional), $1,600 (annual)

$400 (conditional), $800 (annual)

You can view the complete fee schedule provided by the NJ Cannabis Regulatory Commission here. Unless otherwise stated, all fees are nonrefundable.

  • Alternative Treatment Center:

Type of Fee

Standard Business

Application fee (nonrefundable)

$2,000

Application fee (can be canceled upon denial of license)

$18,000

Currently, the CRC is not taking applications for Alternative Treatment Centers. Once applications open, we’ll update this section.

The buildout cost for a retail dispensary can be between $250,000 and $300,000, according to Darrin Chandler Jr., Director of Cannabis Real Estate for RIPCO. 

The startup cost for a standard retail dispensary business can range from around $250,000 to $2,000,000. On the other hand, the start-up costs and licensing fees associated with a cannabis microbusiness model are much lower. 

How to get your  Cannabusiness Funded: Funding, Loans, Grants, And More

Start-up costs for most cannabis businesses depends on a variety of criteria such as location, size, and objectives. Costs may include application and licensing fees, staffing, rent, renovations, equipment, product, security, and more. Despite medicinal cannabis being legal in New Jersey, standard banking services and loans are still inaccessible to cannabis businesses as it is still illegal under federal law. Most startups can receive funding in a variety of ways including:

  • Self-Funding – Due to the difficulty in acquiring finance through traditional channels, cannabis entrepreneurs are likely to select this as their most popular alternative.
  • Friends and family – You can reach out to family and friends for financial assistance or even a no-interest loan. Getting loans from family and friends who believe in your business plan is a good idea because they fully understand the risks involved in lending money to your startup business.
  • Partners – The cannabis industry is full of people looking to break into it. Forming a partnership could benefit both parties, making this a great potential source of investment capital.
  • Personal Loans – You may be qualified for a personal loan if you have good credit and a consistent salary. When approving a loan, profit, time in business, and business credit score are not considered; nonetheless, you must specify how the cash will be used.
  • Cannabis Business Loans – A growing number of lenders willing to work with and fund cannabis businesses are emerging. You can get a loan from a cannabis-specific credit union or bank. 
  • Crowdfunding – Startups are increasingly turning to crowd funders for help with funding. This method, however, could take several months or even longer to raise the funds you’ll need to get your business off the ground.
  • Private Equity – The cannabis industry has attracted a significant amount of private equity capital. Private equity funds acquire and invest in privately held companies to increase their value, resell them, or hold them for a long time.
  • Angel Investors – An angel investor puts money into a startup that they feel will thrive in exchange for shares or future repayment. Since angel investors are individuals, they can choose which companies to invest in. 
  • Venture Capital – A venture capital firm is one possible alternate source of cannabis industry investment. Many VC companies have already entered the cannabis business. Notably, accepting VC investment means selling equity in your cannabis business and lowering your ownership stake.
  • Capital Brokers – Finding investors through the help of a capital broker who specializes in the cannabis industry is yet another excellent option to consider. It is their responsibility to locate and qualify potential marijuana investors interested in investing in the cannabis industry.

 

It is important to note that determining the best route for how you will fund and successfully carry your business into profitability starts with your business plan and pitch decks. Following your initial planning, research, and consultation, you should have a better sense of your initial startup financial needs.

Social Equity

People with prior experience living in an economically disadvantaged area of the state or who have prior convictions for cannabis-related crimes are eligible to run Social Equity Businesses. During the application process for the cannabis business license, social equity businesses are one of the types of cannabis businesses that will be given priority evaluation and approval.

Aside from social equity businesses, other types of priority applicants are diversely Owned Businesses and Impact Zone Businesses. Director of Diversity and Inclusion – New Jersey CRC Wesley McWhite, advises reading the descriptions of the various priority designations and applying for your highest priority the first time to avoid starting the curing process. Look at all the forms that must be included with your application. The social equity attestation form that must be completed and notarized, along with any other papers you might provide to show that you are a social justice candidate, is the most crucial.

“Securing funding is the biggest problem for minority applicants,” according to Warren Harasz, VP of Regulatory Compliance of Cannaspire. “Get a strong business model. Show how you’re going to succeed. Show the ins and outs of the business and educate yourself to be able to educate the municipality and the state about what a strong prospect this is going to be. No one wants to license a business that will fall flat on its face in six months.”

To get your license, whether you’re applying under social equity or not, you’ll need a full and thorough security plan. According to Dave Myers, VP of Security at Cannaspire, the best way for social equity applicants to create thorough security plans for their applications is to create something very comprehensive, including physical security features, operational features, and cyber security features. So it includes those technological features as well. 

You need to create your strategy. Darrin Chandler Jr., Director of Cannabis Real Estate at RIPCO, suggests determining which priority list you will use and if you will submit a conditional or annual application. If you want to go conditional, you may apply without a real estate or financial commitment, and you essentially just need a few key documents. If you already hold a conditional license, the conversion procedure is the next step. Finalize real estate, account resolution, financing, and then SOPs to re-apply again and get that conversion completed. Finish everything on the municipality level and then start construction and build up.

What you need to know to get started and get on the path to succeeding in the industry is discussed in Webinar: How to Get A Social Equity Cannabis Business License in New Jersey. You can watch the complete webinar here.

How To Choose Your Dispensary Location

There are a number of things to consider when choosing a location in New Jersey. You have to do your homework and search for it.

  • Look at what your business model is and what your plans call for.
  • Determine which areas are cannabis-friendly. You want to be in a cannabis-friendly municipality, especially in northern New Jersey. Counties and towns may prohibit cannabis companies, even in states that have legalized medicinal or adult-use cannabis.
  • Find a place that will accommodate your demands and allow for expansion.
  • Ensure passersby can see your dispensary. Even if you obtain a dispensary in a busy area, it won’t matter if people can’t see it.
  • Competition is another important dispensary site concern. If there are several dispensaries on the block where you want to invest, you should probably look elsewhere.

Designing Your Dispensary for Customer Experience

  • Strategic Layout: The layout of your dispensary is your first conversation with your customer. Design a space that is not only welcoming but also intuitive in its flow, from entry to checkout. Ensure that the layout is Americans with Disabilities Act Standards for Accessible Design (ADA) compliant, which states what is required for a building or facility to be physically accessible to people with disabilities.Ambiance and Branding: Your dispensary is more than a store; it’s an experience. Use lighting, décor, and color schemes that resonate with your brand’s ethos and create a comfortable environment for customers.
  • Educational Displays: In a market where knowledge is power, equip your dispensary with educational materials and digital displays. This approach empowers customers to make informed choices and positions your dispensary as a trusted source of information.
  • Inventory Management Mastery:Curated Product Range: Diversify your offerings to cater to various customer preferences, including a range of strains, edibles, and wellness products.
  • Efficient Stock Management: Implement a state-of-the-art inventory system to keep track of your stock levels, understand purchasing trends, and manage reorders effectively. Compliance with state tracking systems is non-negotiable.
  • Quality Assurance: Establish strict quality control protocols. Regularly inspect your inventory to ensure that all products meet both your high standards and state regulations.

Staff Training and Development

  • Recruitment: Hire a team that reflects your dispensary’s values. Look for individuals with a passion for cannabis and a talent for customer service.
  • Comprehensive Training: Develop an extensive training program covering product knowledge, customer engagement, legal compliance, and emergency response.
  • Continuous Learning: Encourage ongoing education among your staff. Stay abreast of the latest in cannabis research and industry trends, and ensure this knowledge is passed on to your team.

Security and Compliance

  • Robust Security Systems: Prioritize the safety of your inventory and customers. Install surveillance systems, secure storage solutions, and train your staff in security protocols.
  • Adherence to Regulations: Regularly review and update your operational practices to remain in strict compliance with New Jersey’s cannabis laws and regulations. For more information on security, you can visit Cannaspire’s Security Page.

Fostering Customer Relationships

  • Engagement and Personalization: Train your staff to not just sell but to build relationships. Understanding customer preferences and providing tailored recommendations will set your dispensary apart.
  • Feedback and Adaptation: Implement a system for collecting customer feedback. Use this valuable data to refine your product offerings and enhance the overall customer experience.

Marketing Your Dispensary Legally in NJ

Compliant Marketing Strategies

Marketing a cannabis dispensary in New Jersey requires navigating a complex web of regulations while creatively reaching your target audience. In this section, we delve into strategies that align with New Jersey’s legal framework, ensuring your marketing efforts are both effective and compliant. For a deeper dive into these strategies, check out our specialized services here.

  • Understanding the Legal Landscape: Familiarize yourself with New Jersey’s cannabis advertising regulations. This includes restrictions on targeting minors, location-based advertising, and digital marketing rules. Ensure all your marketing materials, including online content, comply with these regulations.
  • Digital and Social Media Marketing: Utilize digital platforms while adhering to their specific cannabis advertising policies. Focus on educational content, community engagement, and brand storytelling. Platforms like Instagram and Facebook have strict policies, so prioritize content that educates rather than directly promotes cannabis products.
  • Community Engagement and Education: Host educational seminars and community events to build brand awareness. These events can focus on cannabis education, addressing misconceptions, and highlighting the medicinal benefits of cannabis. This approach not only markets your dispensary but also positions it as a community-centric and responsible entity.
  • Leveraging SEO: Optimize your website with SEO best practices to ensure high visibility in search engine results. Focus on keywords related to cannabis in New Jersey, dispensary services, and educational content about cannabis use.
  • Case Studies: Examine successful marketing campaigns from NJ dispensaries. For instance, a dispensary in Newark launched a campaign focusing on the therapeutic aspects of cannabis, using patient testimonials and educational content. 

New Jersey Cannabis Business Technology, Products, and Partnerships You Need 

Whether you aim to open a cannabis dispensary or other type of marijuana business, there are a variety of products and technologies that you will need to become familiar with.    

Technology Requirements

Technology is very important for a cannabusiness. Not only is the technology required per state regulations, but a smart technology plan will give you a competitive advantage in the market. 

One example might be utilizing cloud video storage for your surveillance video needs to meet future compliance. You will likely need to look into the necessary technologies and potential tech partners that can help fill important knowledge gaps to save you time and money. 

Here are a few examples of tech necessary in a cannabis business. (Top Cannabis Softwares)

Product and Service Partners

When running a cannabis business, not only because in New Jersey, you won’t be able to “vertically integrate,” but also because cannabis businesses require a wide set of knowledge and skills to properly operate the business and achieve compliance, the quality of your product and service partners is critical to your business success. 

For example, in the past few years, there have been data breaches due to lax security of 3rd party vendors, such as software that exposed cannabis businesses’ client lists. For these reasons, it is essential to choose vendors and partners wisely. Considerations can include:

  • Trustworthy track record of staying compliant to government requirements;
  • Track record of product consistency;
  • Ability to handle scale;
  • Able to competently handle problems when they occur.

 

As you can see, aside from direct cannabis expertise, there are a wide variety of topics that you must be competent on including storage, inventory, security, sales, purchase limits, waste disposal, sanitation, and many many more. This is because each of the above topics is part of running a cannabis business, and any gaps in operational knowledge can impact long-term success. 

Due to what has been an unprecedented year for New Jersey, events are continuously unfolding that will affect when and how recreational legalization will happen. By adding yourself to our New Jersey Cannabis Mailing List (below), we will keep you updated on how to open a dispensary in New Jersey and all relevant NJ news that matters, including the not so easy to find news, and comments based on New Jersey Legalization below.

This includes but is not limited to

  • When will applications for new cannabis retailer licenses be available?
  • How much will it cost to open a dispensary in New Jersey?
  • What are the requirements to open a dispensary in New Jersey?
  • What special programs will be available?
  • And more 

 

Just fill out the information below to get access!

Subscribe

PLEASE SHARE THIS

YOU MIGHT ALSO LIKE​