NEW JERSEY: The New Jersey Cannabis Regulatory Commission took several significant actions during their public meeting on Wednesday, February 8 to spur the continued development of New Jersey’s burgeoning cannabis industry and improve the licensing process. The Commissioners considered proposed amendments to the Commission’s rules to reorder the criteria for priority applications, a recommendation to allow cannabis business vertical integration, a proposal to accept applications for additional cannabis license classes, and a recommendation to sunset the cap on cultivator licenses. 

Two of the Commission’s actions relate to how applications are processed. The Board voted to readopt the Commission’s rules with amendments and new rules, including guidelines for additional cannabis business classes. After the rules have been filed with the Office of Administrative Law and published in the New Jersey Register, the Commission will have rules for new license types: Class 3, wholesalers; Class 4, distributors; and Class 6, delivery licenses.

Additionally, the Commission approved an amendment to the Notice of Application Acceptance that will reorder the criteria for priority applications. The amendment means all Social Equity, Diversity-owned Businesses, and Impact Zone applications – including those for annual and conversion licenses, are reviewed before all other applications.

“The change in priority order ensures that annual license applications from priority designated businesses are promptly reviewed and approved, and that the priority designation applies for all stages and application categories. The change should help those businesses get up and running in time to boost competition in the industry,” stated Commission Chairwoman Dianna Houenou.

During the meeting, the Commission’s Permitting and Licensing Committee recommended that the current cap of 37 on cultivation licenses be allowed to expire on February 22, 2023 – the date included in the legislation. There are currently 17 operational cultivation facilities in the state with a total canopy of 418,000 square feet. The Commission has awarded 17 annual cultivation licenses since the agency began granting licenses.

Commissioner Maria Del Cid-Kosso, who sits on the Permitting and Licensing Committee, believes removing the cap is good for the market.

“The market is developing, and we don’t want to hinder that. The New Jersey canopy is currently only 418,000 square feet – far below the average of other states with legal cannabis. New Jersey currently has only *one cultivation license for every 197,000 residents. The national average is one license for every 31,000 residents*. We have a lot of room to grow. We expect that lifting the cap will open the space for more cultivators, ultimately resulting in more favorable pricing and better access for patients and other consumers,” she said.

The Permitting and Licensing Committee also reviewed the parameters of the expiration of the prohibition on certain vertically integrated businesses. After February 22, 2023, cannabis license holders will be able to hold a cultivator license, a manufacturer license, a retailer license, and a delivery service license at the same time. License holders will be able to have only one of each and in any combination. Additionally, wholesale license holders can also hold a distributor license. Expanded ATCs may cultivate, manufacture, retail, and deliver.

During the meeting, the Commission also awarded 49 conditional, 11 annual, and 11 condition-to-annual licenses. These awards bring the total annual licenses to 39 and the number of conversions to 33. Of the 1575 applications submitted overall, all applications have started the review process, and only 54 applications have yet to advance to completeness review.

The New Jersey Cannabis Regulatory Commission establishes and enforces the rules and regulations governing the licensing, cultivation, manufacturing, testing, selling, and purchasing of cannabis in the state.

*Cannabis cultivation licenses, by state U.S. 2022 | Statista