New Jersey Cannabis had itself a week. Following a recent decision permitting the New Jersey Department of Health, Medical Marijuana Division (“DOH”) to continue scoring its 2019 Request for Applications (“2019 RFA”) and award twenty-four (24) additional medical cannabis licenses, New Jersey doubled down; with Governor Murphy not only signing into law the adult-use enabling legislation, but also finally appointing the remainder of the Commissioners to the five (5) person Cannabis Regulatory Commission (“CRC”). But what does this mean for what has quickly become the hottest cannabis marketplace in the United States? Well, a lot.
The confluence of these three events, in their own right, would have been notable – but all three happening at once creates the perfect opportunity for the rapid expansion of the industry and opportunities for cannabusinesses throughout New Jersey. Looking first at the medical marketplace, patient enrollment in the Medical Marijuana Program has continued with tremendous growth, with the program eclipsing 100,000 total patients by the end of 2020. These numbers are important, if only due to the fact that the DOH has identified its goal of having at least 1 dispensary for every 2,500 patients, meaning, the State has a need for at least 40 dispensaries, with only 13 currently existing and another 15 held up in the 2019 RFA pipeline.
But more so, even the adult use enabling legislation makes plain that medical license holders will be the first entities selling to the adult use marketplace. However, those existing medical operators may only begin adult use sales after first certifying to the CRC of their ability to continue to meet existing and growing patient demand. This means that the DOH must continue soliciting more medical licenses just to meet that growing demand and to permit the larger network of medical operators to produce enough excess to meaningfully commence sales to adult-use consumers.
And from there – the sky is the limit. Much has been made of the cap of only 37 permissible cultivators in New Jersey for the first twenty-four (24) months of the adult-use program (which is inclusive of medical cultivators as well). That being said, carved out from this number are any entities possessing a microbusiness cultivation license, which is, at its core, a craft grower license. This means that there is space not only for the biggest multi-state operators, but also craft growers looking to create more curated products. And no such caps are identified for the other license types envisioned under the adult-use program, i.e., processors/manufacturers, dispensaries, wholesalers, distributors, and delivery licenses.
Though we’ve had a medical program for several years, it’s important to remember that we are still creating a brand new adult-use marketplace from scratch. This is where the appointment of all five (5) Commissioners takes on paramount importance, as the CRC is the body that will create the initial rules and regulations for the adult-use program. Though the Legislature gave the Commissioners a mandate to make those rules expeditiously, even an aggressive timeline suggests that this will not be done in less than six (6) months, and it is only after those initial regulations are released that the CRC can begin soliciting those stand-alone adult-use licenses.
In short, and as is the case with many facets of life, timing is certainly everything – and the confluence of these three events, the 2019 RFA round proceedings, the Adult-Use Bill being signed into law, and all five (5) Commissioners being appointed, demonstrates that New Jersey is on the fastest possible trajectory towards an explosive cannabis marketplace. Based on these events, and the statute itself, New Jersey’s cannabis trajectory will likely be as follows over the course of the next year:
- February 22, 2021 – adult use implementation legislation signed into law.
- August 22, 2021 – interim rules and regulations adopted by CRC.
- August 22, 2021 – earliest date adult use sales could begin.
- August 22, 2021 – CRC must issue adult use RFA.
- September 21, 2021 – CRC begins accepting applications from applicants.
- October 21, 2021 – CRC must make decisions on conditional licenses.
- December 20, 2021 – CRC must make decisions on annual licenses.
- February 22, 2022 – latest date when adult use sales must commence
In any event, buckle up, because New Jersey Cannabis is certainly racing forward.
Originally Published To JD Supra at