New Jersey Cannabis Laws

New Jersey’s cannabis laws, effective since April 21, 2022, allow adult-use cannabis for those over 21, regulated by the CRC. Dispensaries must implement stringent security and operational protocols to ensure compliance. Medical cannabis is exempt from sales tax, while recreational cannabis incurs a 6.625% sales tax and an additional social equity excise fee.

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New Jersey cannabis laws at a glance

Overview

On April 21, 2022, New Jersey legalized adult-use cannabis, allowing anyone over the age of 21 to consume the plant. This landmark change marked a significant shift in the state’s approach to cannabis regulation, creating new opportunities and responsibilities for dispensary operators. The New Jersey Cannabis Regulatory Commission (CRC) oversees and regulates the cannabis industry, ensuring compliance with state laws. Key regulations include maintaining odor control, prohibiting the sale of food, beverages, alcohol, or tobacco, and the requirement for cannabis businesses to develop and maintain an operations manual. Additionally, medical cannabis is exempt from sales tax, while recreational cannabis is subject to a 6.625% sales tax plus a social equity excise fee of 1/3 of 1%.

  • Adult-use cannabis: Legal for purchase by anyone aged 21 or older as of April 21, 2022.

  • Regulatory body: The New Jersey Cannabis Regulatory Commission (CRC).

  • Odor control: Dispensaries must prevent odors from escaping their premises.

  • Prohibited sales: Dispensaries cannot sell food, beverages, alcohol, or tobacco.

  • Operations manual: Required for all cannabis businesses.

  • Security: Dispensaries must take appropriate measures to protect their premises.

  • Medical cannabis tax exemption: Medical cannabis is not subject to New Jersey sales tax.

  • Recreational cannabis tax: Subject to a 6.625% sales tax plus a social equity excise fee of 1/3 of 1%.

This section sets the foundation for understanding the key points of New Jersey’s cannabis laws, helping dispensary operators navigate the regulatory landscape effectively.

Medical Marijuana Dispensary Licensing

Legal Reference

New Jersey’s medical marijuana dispensary licensing involves a comprehensive application process. The state requires detailed information about the applicant’s qualifications, experience, and knowledge of medical cannabis operations. This includes:

  1. State-Authorized Dispensation: Understanding the legal framework for dispensing medical cannabis to qualifying patients.
  2. Healthcare Knowledge: Familiarity with the treatment of patients with qualifying medical conditions.
  3. Product Evaluation and Recall Plans: Procedures for evaluating and recalling medical cannabis products if necessary.
  4. Packaging and Labeling: Compliance with state regulations for packaging and labeling cannabis products.
  5. Inventory Control and Point-of-Sale Systems: Robust systems for tracking inventory and sales.
  6. Patient Counseling Procedures: Protocols for advising patients on cannabis use.
  7. Odor Mitigation Practices: Strategies to prevent cannabis odors from escaping the dispensary.
  8. Recordkeeping: Both onsite and offsite recordkeeping to ensure accurate tracking and compliance.
  9. Waste Disposal Plans: Proper methods for disposing of cannabis waste.
  10. Compliance with Privacy Rules: Adherence to state and federal patient privacy regulations.

Additionally, applicants must provide:

  • Environmental Impact Plan: Assessment of the environmental impact of the dispensary’s operations.
  • Safety and Security Plans: Detailed security measures including surveillance, alarm systems, and employee screening procedures.
  • Business Experience Summary: Overview of the applicant’s business experience, particularly in regulated industries.
  • Location Description: Detailed description of the proposed site, including zoning approvals and community support.
  • Community Impact, Social Responsibility, and Research Statement: Plans for positive community impact, social responsibility initiatives, and cannabis-related research.
  • Workforce Development and Job Creation Plan: Plans for job creation and workforce development, including diversity initiatives.
  • Business and Financial Plan: Financial viability and compliance with tax obligations.
  • Medical Advisory Board Composition: Proposed members of the dispensary’s medical advisory board.
  • Partnership with Prisoner Reentry Programs: Details of any partnerships aimed at providing employment opportunities for former inmates.

For current ATCs (Alternative Treatment Centers) seeking expansion, the Commission requires less comprehensive applications but still mandates:

  • Letter of Intent: Notification of the desired licenses.
  • Municipal Approval: Confirmation from local authorities.
  • Certification of Sufficient Medical Cannabis Supply: Assurance that patient needs will be met.
  • Labor Peace Agreement: Agreement with a labor organization to maintain peaceful labor relations.

This section outlines the stringent requirements and detailed planning necessary to obtain a medical marijuana dispensary license in New Jersey.

Recreational Marijuana Dispensary Licensing

Legal Reference

New Jersey has established a comprehensive framework for recreational marijuana dispensary licensing, governed by the New Jersey Cannabis Regulatory Commission (CRC). This section outlines the key requirements and processes for obtaining and maintaining a recreational cannabis dispensary license.

Microbusiness Licensing

Definition: A microbusiness is a smaller-scale cannabis operation with specific limitations on its size and operations. The state of New Jersey has removed any caps or numerical restrictions on the number of microbusinesses that can operate, encouraging local entrepreneurship.

Requirements:

  1. Ownership and Residency: 100% of the ownership must be held by New Jersey residents who have lived in the state for at least two consecutive years.
  2. Local Residency: At least 51% of the total number of owners, principals, and employees must be residents of the municipality where the microbusiness will be located or a neighboring municipality.
  3. Employee Limit: A microbusiness can employ no more than 10 employees at any given time.
  4. Facility Size: The facility can occupy no more than 2,500 square feet, with cultivation areas also limited in size and plant count.
  5. Monthly Limits: There are strict monthly limits on the amount of cannabis that can be cultivated, manufactured, or sold.

Microbusinesses benefit from reduced fees, not requiring labor peace agreements, and have specific regulations designed to support small-scale operations.

Conditional Licensing

Eligibility: Applicants must meet certain criteria to qualify for a conditional license:

  1. Background Checks: All owners, principals, employees, and associated contractors must pass criminal history background checks.
  2. Residency and Income: At least one owner must have resided in New Jersey for at least two years, and each owner must have an adjusted gross income below specified thresholds.
  3. Ownership Restrictions: Owners of conditional licenses cannot have any ownership interest in a business holding an annual cannabis business license.

Application Process:

  • Disclosure: Applicants must disclose detailed information about their business structure, proposed location, business plan, regulatory compliance plan, and other necessary documentation.
  • Business Plan: A robust business plan outlining the management and operational profile.
  • Municipal Approval: Gaining approval from the local municipality is crucial.

Conversion to Annual License: A conditional license is temporary and must be converted to an annual license within a specified period. During the conditional phase, license holders must establish control of their site, gain municipal approval, and submit a conversion application.

Annual Licensing

Application Requirements:

  1. Documentation: Applicants must provide federal and state tax IDs, business registration certificates, organizational documents, and evidence of compliance with local codes and ordinances.
  2. Location Suitability: Detailed descriptions of the proposed location, including zoning approvals and proof of local support.
  3. Operational Plans: Comprehensive plans covering business operations, environmental impact, safety, security, and community impact.
  4. Labor Peace Agreement: Except for microbusinesses, annual license applicants must maintain labor peace agreements with bona fide labor organizations.
  5. Financial Viability: Demonstrating financial stability and the ability to sustain operations.

Renewal Process: Annual licenses must be renewed yearly, with applications submitted 90 days before expiration. Grounds for denial of renewal include failure to maintain compliance, provide accurate information, or uphold social equity and business status.

Social Equity, Diversely Owned, and Impact Zone Businesses

Special Designations: New Jersey encourages applications from businesses owned by minorities, women, disabled veterans, and those located in impact zones. These designations offer benefits such as reduced fees and potential prioritization in the application process.

Certification Requirements: Applicants must provide evidence and attestations supporting their qualifications under these categories.

General Requirements for Cannabis Business License Holders

Legal Reference

New Jersey cannabis businesses must adhere to a set of stringent requirements to maintain their licenses. These requirements ensure that businesses operate responsibly, maintain public safety, and comply with state regulations.

General Operational Requirements

  1. Licensing: No person or entity can operate a cannabis business without a license issued by the New Jersey Cannabis Regulatory Commission (CRC). Each business must operate under the name on their license, which must match their legal entity name as registered with the state.
  2. Qualification and Compliance: License holders, their owners, principals, employees, management services contractors, financial sources, and vendor-contractors must:
    • Maintain qualification to hold a license.
    • Comply with all state regulations and laws.
    • Cooperate fully with the CRC and its staff.
  3. Public Disclosure: Upon request, businesses must provide a redacted copy of any submission to the CRC that may be released to the public, ensuring that sensitive information is protected.
  4. Labor Peace Agreements: Except for microbusinesses, maintaining a labor peace agreement with a bona fide labor organization is a material condition for holding a cannabis business license. Failure to enter or make a good faith effort to enter into a collective bargaining agreement within 200 days of opening may result in license suspension or revocation.
  5. Employment Efforts: Businesses must make a good faith effort to recruit and employ individuals who qualify under the state’s social equity provisions, aiming to support those disproportionately impacted by past cannabis laws.
  6. Employee Limits for Microbusinesses: Microbusinesses are restricted to employing no more than 10 people at any given time.
  7. Sanitary Conditions: Businesses must maintain sanitary conditions throughout their premises, ensuring cleanliness and safety.
  8. Odor Control: Businesses must take steps to prevent cannabis odors from escaping their premises. Failure to do so can result in fines or other penalties.
  9. Sustainability Plan: Businesses are required to implement sustainability measures, which may include:
    • A waste reduction plan.
    • A water usage reduction plan.
    • Biodynamic farming practices.
    • A sustainable packaging plan that minimizes single-use plastics.
    • Utilizing renewable energy sources.
  10. Visitor Control: Visitors must be accompanied by a staff member with a Cannabis Business Identification Card at all times, except in the consumer area of a retail establishment. Vendor-contractor staff are considered visitors unless they possess a Cannabis Business Identification Card.

Additional Requirements for Alternative Treatment Centers (ATCs)

  1. Priority for Medical Patients: Expanded ATCs must prioritize the needs of registered qualifying medical patients over those of recreational consumers. They must not make operational changes that would reduce access to medical cannabis for patients.
  2. Sufficient Supply: ATCs must ensure they have adequate supplies of medical cannabis to meet the needs of their patients. If the CRC finds that an ATC does not have sufficient supplies, it may impose fines, limit retail sales, or temporarily suspend the ATC’s licenses.
  3. Annual Certification and Municipal Approval: Expanded ATCs must certify the continued accuracy of their operations and submit new municipal approvals for continued operations as part of their license renewal process.

Dispensary Prohibitions

Legal Reference

The state of New Jersey has set forth specific prohibitions that cannabis dispensaries must follow to ensure the safe and legal operation of their businesses. These regulations are designed to protect consumers, maintain public safety, and ensure compliance with state laws.

Key Prohibitions

  1. Consumption on Premises:
    • No Consumption: Dispensaries cannot allow any cannabis items or alcohol to be consumed on the premises. This includes public areas in the vicinity of the business.
    • No Public Consumption: The prohibition extends to preventing the consumption of cannabis in public areas near the business location.
  2. Sales Restrictions:
    • Food and Beverages: Dispensaries are prohibited from selling food, beverages, alcohol, or tobacco on their premises.
    • Age Restrictions: Individuals under the age of 21 are not allowed to enter the premises unless they are supervised by a parent or legal guardian. Selling or providing cannabis to anyone under 21 is strictly forbidden.
  3. Advertising and Naming:
    • Alternate Names: Dispensaries cannot use, display, advertise, or operate under any alternate name, including any “doing business as” (DBA) name, without proper authorization. This prohibition does not apply to alternative treatment centers (ATCs) that were issued a permit prior to specific legislative changes and have not changed their name or alternate name since the effective date of the relevant regulation.

Enforcement and Compliance

Dispensaries must ensure strict compliance with these prohibitions to avoid penalties, including fines and potential suspension or revocation of their licenses. The New Jersey Cannabis Regulatory Commission (CRC) monitors and enforces these regulations, ensuring that dispensaries operate within the legal framework established by the state.

Operations Manual

Legal Reference

New Jersey cannabis businesses must develop, implement, and maintain an operations manual that comprehensively outlines the procedures and policies necessary for the effective and compliant operation of the business. This manual is crucial for ensuring consistency, safety, and regulatory adherence across all aspects of the business.

Key Requirements

  1. Oversight Procedures:
    • Adverse Event Reporting: Establish protocols for documenting and reporting any adverse events related to cannabis use or business operations.
    • Quality Assurance and Quality Control: Implement procedures to ensure the quality and consistency of cannabis products.
    • Recall Procedures: Develop and maintain a system for recalling cannabis products if necessary.
    • Packaging and Labeling: Ensure all cannabis products are correctly packaged and labeled according to state regulations.
    • Inventory Control: Maintain accurate records of inventory to prevent diversion and ensure compliance with state tracking requirements.
    • Waste Disposal: Establish procedures for the safe and compliant disposal of cannabis waste.
    • Accounting and Tax Compliance: Implement processes for managing financial records and ensuring tax compliance.
    • Reporting of Test Results: Ensure accurate reporting of test results for cannabis products.
  2. Safe Cultivation, Manufacturing, and Sale:
    • Develop procedures to safely cultivate, manufacture, and sell cannabis products, ensuring that all activities comply with state regulations and industry best practices.
  3. Recordkeeping and Inventory:
    • Ensure accurate recordkeeping, including detailed inventory procedures to prevent unauthorized redistribution of cannabis products.
  4. Security Policies:
    • Develop and implement security policies for employees, visitors, and the facility, including access control measures and protocols for handling security breaches.
  5. Safety Procedures:
    • Establish safety procedures, including disaster plans for emergencies such as fire, personal safety protocols, and crime prevention techniques.
  6. Operational Details:
    • Include a detailed description of the business’s hours of operation, after-hours contact information, and fee schedule.
    • Outline confidentiality and privacy standards for business operations and consumer interactions.
    • For cannabis retailers, include criteria for refusing service to consumers exhibiting unacceptable behavior.
    • Ensure procedures are in place to verify consumer ages and comply with all legal requirements for age verification.

Compliance and Inspection

Cannabis businesses must ensure that their operations manual is readily available for inspection by the New Jersey Cannabis Regulatory Commission (CRC) upon request. This manual serves as a critical tool for maintaining operational standards and ensuring regulatory compliance across all facets of the business.

Security Requirements

New Jersey cannabis businesses must provide effective controls and procedures to protect their establishment against unauthorized access, theft, and diversion of cannabis. These measures include:

  1. Alarm Systems:
    • Install, maintain, and operate a safety and security alarm system that provides protection against theft and diversion.
    • The system should include immediate automatic or electronic notification to alert personnel and local police of unauthorized breaches or alarm failures.
    • A backup system must activate immediately upon loss of electrical support and notify police of such loss.
  2. Security Measures:
    • Implement measures to deter and prevent unauthorized entrance into areas containing cannabis.
    • Security measures should also protect the premises, consumers, and cannabis business personnel.
    • Establish protocols for regular testing and maintenance of the alarm system.
    • Conduct inspections and tests of the alarm system at least every 30 days, promptly addressing any necessary repairs.
  3. Electronic Monitoring:
    • Equip both interior and exterior premises with electronic monitoring, including video cameras and panic buttons.
    • Install a video surveillance system to monitor all critical control activities continuously.
    • Maintain an archive of the original tapes or digital images for at least 30 days.
    • Ensure the video surveillance system is supported by adequate security lighting, illuminating all entrances and exits.
  4. Access Control:
    • Keep access from outside the premises to a minimum and ensure it is well-controlled.
    • Limit entry into areas where cannabis is stored to authorized personnel only.
    • Ensure that visitors are accompanied by an escort with a Cannabis Business Identification Card at all times, except in the consumer area of a cannabis retailer.
  5. Lighting and Visibility:
    • Keep the outside areas and perimeter of the premises well-lighted to deter criminal activity and facilitate surveillance.
    • Ensure lighting does not disturb neighboring businesses or residents.
  6. Emergency Measures:
    • In case of an alarm system failure due to electrical loss or malfunction expected to last longer than eight hours, notify the Commission and provide alternative security measures or close the premises until the system is restored.
  7. Community Relations:
    • Provide local law enforcement and neighbors within 100 feet of the cannabis business with the contact information of a staff member to report any issues during and after operating hours.

Monitoring of these security measures and systems is required to be continuous, 24 hours a day, seven days a week, and may be conducted off-site.

New Jersey Cannabis Laws FAQs

How much cannabis can I buy in New Jersey?

Registered medical cannabis patients in New Jersey can purchase up to 3 ounces of cannabis or cannabis products every 30 days. Recreational cannabis consumers are allowed to possess up to 1 ounce of usable cannabis or its equivalent. This means:

  • Up to 1 ounce of dried flower, or
  • 5 grams of concentrates, resins, or oils, or
  • 1000 mg of ingestible products (10 packages of 100 mg each, such as gummies).

Is it legal to grow cannabis in New Jersey?

No, it is illegal for any individual to grow cannabis plants in New Jersey unless they have an approved cultivator license. Growing even a single cannabis plant can result in up to five years in prison and a $25,000 fine.

Is recreational cannabis legal in New Jersey?

Yes, recreational cannabis was legalized in New Jersey in 2020. However, the sale of legal cannabis products to persons 21 years or older did not begin until April 21, 2022. Both medical and recreational cannabis are now legal in the state.

Can I legally sell cannabis in New Jersey?

Yes, businesses with the proper licensing and approval can legally sell cannabis, either medically or recreationally. The following six classes of license types are available for personal use cannabis businesses under the CREAMM Act:

  1. Class 1 – Cultivator (grow)
  2. Class 2 – Manufacturer (produce)
  3. Class 3 – Wholesaler (buy, store, sell, or transfer cannabis between cultivators, manufacturers, wholesalers, and retailers)
  4. Class 4 – Distributor (transport cannabis in bulk between cultivators, manufacturers, wholesalers, and retailers)
  5. Class 5 – Retailer (sell cannabis to consumers)
  6. Class 6 – Delivery (deliver cannabis purchases from retailers to consumers)

Where can I smoke cannabis in New Jersey?

You can consume legal cannabis products on private property. Property owners have the right to restrict cannabis use on their property. Additionally, consumption is allowed in dispensaries that are licensed and zoned for onsite consumption.

How is cannabis taxed in New Jersey?

As of July 1, 2022, medical cannabis in New Jersey is no longer subject to sales tax. Recreational cannabis, however, is taxed at the state’s 6.625% sales tax rate, plus a social equity excise fee of 1/3 of 1%.

Disclaimer: The material contained on this website and any attached or referenced pages has been compiled by UZIO for informational purposes only. It is not intended to be and is not considered to be legal advice. This post is current as of [24-July-2024]. Cannabis regulations are rapidly changing, and legal advice of any nature should be sought from legal counsel.

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