New Cannabis License Types Available in New Jersey Now!
Starting yesterday, March 27th, New Jersey, one of the few states that allows entrepreneurs to apply for a commercial cannabis license at any time, opened up 3 New License Types to all. In addition to these new licenses, the New Jersey Cannabis Regulatory Commission (NJ-CRC) also recently finalized the regulations allowing for the establishment of cannabis consumption lounges. The State sold $800,279,300 in cannabis in 2023, and has eclipsed over $2 billion dollars since 2018. With a market currently anticipated to surpass $1 billion in sales in 2024 alone, the introduction of these new licenses presents a significant opportunity for entry into the expanding New Jersey cannabis market.
Final Round of Delivery, Distribution, & Wholesale Licenses
While it was restricted to Social Equity and Diversely-Owned Businesses, starting yesterday, March 27th and extending onwards, Delivery, Distribution, and Wholesale licenses is available for all prospective applicants. This is an amazing opportunity for entrepreneurs from traditional business backgrounds, as these particular licenses lean into more traditional business models and skill sets rather than those specific to the cannabis industry.
These license types are described as follows:
Wholesaler
This is license type is relatively unique in the cannabis industry, found in few other states, but is based on the traditional wholesaler model found in the Agricultural Industry. Wholesaler Licensees do not have the right to cultivate, manufacture, or otherwise produce cannabis products of any kind, nor do they have the legal right to sell cannabis directly to consumers. Instead, Wholesaler Licensees purchase products from Cannabis Cultivators and Manufacturers, packaging under their own label (if they so choose), and then re-selling those products to Adult-Use Retailers. To give an example, think of a major produce brand like Green Giant. They purchase the vegetables from various farmers, package the product into their own brand, then go out and market and sell their product to grocery stores. In other words, the Wholesaler License is perfect for a white labeling play.
Distribution
Distribution Licensees provide transportation services at the wholesale level. Unlike Wholesale Licensee’s, they do not purchase or take title to cannabis products, but act as a transportation service provider for NJ cannabis producers. They are analogous to UPS or other product shipping providers in that they do not own what they ship, instead taking a fee from the shipper to take product from point A to point B. As with UPS, a Distribution Licensee’s customers (NJ Licensed Adult-Use Cannabis Cultivators and Manufacturers) have the ability to transport their own products, so a Distribution Licensee will need to show a business justification for cultivators and manufacturers to use their distribution services. This is a great opportunity for entrepreneurs with expertise in large scale logistics.
Delivery
Delivery licenses are seen as a relatively low-cost way for many to enter the cannabis industry. A delivery license allows a business to provide delivery services to New Jersey Adult-use Cannabis Retailers, much in the way that delivery services such as Grubhub or Delivery Dudes provide such services to restaurants. The key is that these businesses do not need major investments in real estate or security, only needing to provide a secure vehicle for the transport of the cannabis from the dispensary to the consumer and a small office for traceability and record keeping purposes. Like Distributors above, or Grubhub for that matter, Adult-Use Retailers can deliver their own products, so any Delivery Licensee will need to create a business incentive to use their service, such as greater delivery speed or economic efficiency. This is a great opportunity for entrepreneurs with expertise in “last-mile” logistics.
New Plans for 2024
The NJ-CRC unveiled new plans for 2024. Chief among these are the long awaited consumption lounge regulations, which will finally allow licensed New Jersey cannabis Retail Licensee’s to begin operating attached cannabis consumption lounges in municipalities that allow it. Those regulations and rules were finalized and are just waiting for the commission to adopt an update to their application acceptance process , with sub-licensing immediately following suit. In accordance with the regulations, establishments designated as consumption lounges are restricted from vending food or alcohol. However, individuals aged 21 and above are permitted to bring their own food or use delivery services, subject to local government regulations.
Ready to Become a Licensed Cannabis Business Owner in New Jersey?
Application access will be granted on a first-come, first-served basis for all license types. It is crucial for interested applicants to be prepared and ready to submit their applications early to take advantage of being among the first movers.