New Jersey Regulators Remove Cap on Cannabis Cultivation Licenses

nj weed cultivation

The New Jersey Cannabis Regulatory Authority has given a boost to the legal cannabis market in the state. The commission recently voted to eliminate that cap that limits the total legal weed growers in the state. Currently, the NJ cannabis license allows only 37 growers. Regardless, only 11 companies cultivate weed for recreational and medical use. Another six companies grow weed for medical use only. The commission agreed to allow the current cannabis license NJ cap set to expire on February 22. 


The CRC does not want to hinder the developing market

The recommendation to remove the cap on cultivation licenses is aimed at allowing the developing market to grow. In her public statement, one of the Permitting and Licensing Committee members, Commissioner Maria Del Cid-Kosso, said the NJ cannabis market is developing. She added that the commission does not intend to hinder that growth. Currently, the New Jersey cannabis license allows the cultivation of 418,000 square feet only.  

This cultivation area is way below the average canopy allowed in other states where cannabis is legalized. The state allows one license per 197,000 residents against the national average of one license per 31,000 residents. The growers believe the removal of the cap will open opportunities to expand the market. They believe it will allow more cultivators to be licensed, which will help make cannabis prices favorable to users. 


Nearly 850 more growers are needed based on the national average

The CRC surveyed at least 15 states where cannabis is legal. Unfortunately, NJ ranked lowest in terms of total growers per state. If the state were to meet the national average, the CRC would need to issue an extra 850 grower licenses. Recreational cannabis use in New Jersey started in April 2022. On the first day, users ordered cannabis worth $1.9 million. To date, a large number of multistate medical cannabis growers supply the recreational weed market.  

Stakeholders argue it is high time that CRC started to issue New Jersey Cannabis licenses to smaller growers. The CRC recommended further amendments to the laws that will change the basis for priority applicants. The recommendation will allow more NJ cannabis license classes to be added to the current ones. Once the process is through, the state will have additional cannabis licenses NJ, such as Class 3, Class 4, Class 6, wholesaler, and distributor. 


Change in priority order to ensure prompt review and approval of licenses

Another success for growers was the approval of an amendment that would change the basis for reviewing and approving priority-designated companies. Businesses considered for priority applications include Social Equity companies, Diversity Owned companies, and Impact Zone businesses. Priority applications target specific communities or people such as women, minorities, people with disabilities, and cannabis convictions. 

When companies in such categories apply for a New Jersey cannabis license, the application will be reviewed by the commission before any other application. The amendment will not only allow for prompt review and approval, but it will also apply in all licensing phases. It will include all cannabis license NJ application categories. In her public statement, the CRC chairperson Diana Houenou said the new amendments would help the priority businesses get started and run fast to allow competition in the weed market. 

The vertically integrated cannabis companies are also destined to benefit from the new laws. This was after the Permitting and Licensing Committee amended the expiration date on the NJ’s ban. The expiry that was tagged on February 22 will not apply. Furthermore, growers who currently hold an NJ cannabis license may apply for additional activities. 

They can apply for a cannabis license NJ to cultivate, manufacture, retail, and deliver finished cannabis products into the market. Nevertheless, applicants will only be allowed to hold one license for each activity. Vertically integrated cannabis companies are those businesses that are allowed to control everything from production to distribution and retail. 

The companies grow their own cannabis, harvest it, process it, and deliver it to the end user. They go under other names, such as seed-to-sale and farm-to-table companies. Many cannabis businesses favor such a system because it retains all profits in the entire supply chain. It provides them with a better way to control product quality and lower costs within the supply chain. 


An extra 49 conditional licenses awarded

In another boost to the cannabis market, the Cannabis Regulatory Commission awarded a further 49 conditional licenses. The award included 11 annual and another 11 conditional to annual cannabis licenses. The state now has a total of 39 annual licenses and 33 conversions. Some stakeholders argued that the state has failed to fulfill its promise to focus the sector on issues of social justice. They noted the sector to date is highly dominated by companies owned by the white community. 

Currently, New Jersey is availing $10 million in grants to former cannabis convicts who wish to start weed businesses in the state. The removal of the cap gave growers a shot and renewed their hope of operating in a well-regulated and vibrant cannabis market in New Jersey. The weed market in the state is destined to grow and attract new players who are willing to invest millions of dollars in the sector. Massive growth will also open new job opportunities to many Americans seeking employment. 

The recreational market was legalized in the state after voters approved Question 1 during the voting process held in November 2020. The New Jersey weed market has been recording slow growth recently. Elimination of the cap will help kick-start the market and give it a fresh boost. A team of members working with the state’s Economic Development Authority urged the CRC to discuss the thorny issues of supporting the economically disadvantaged, people of color, and those with prior cannabis convictions. 

The $10 million grant is expected to be distributed equally to aspiring entrepreneurs with prior cannabis convictions. The grant will be distributed under several programs. One of the programs will give $150,000 for technical assistance. It will target 24 Social Equity applicants. Another program will grant $250,000 to applicants with already running cannabis businesses. It will target 24 conditional license holders.

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