Dispensary Laws in New Jersey
Medical marijuana has been legal in New Jersey since 2010, though heavily regulated. With the state marijuana regulators approving 30 additional MMJ dispensaries, the state of 8.8 million which only had 23 dispensaries, will now have more than double the number of MMJ dispensaries. The numbers are quite low when compared to a state like Arizona that has more than 120 dispensaries, even though it has a lower population (7.2 million) and medical marijuana has been legal in Arizona since 2010 as well.
The state allowed for six total medical dispensaries in the initial 2010 legalization. It then took its sweet time in giving them out, only approving the sixth initial MMJ dispensary in 2017.
Can I currently open a medical dispensary in New Jersey?
The Cannabis Regulatory Commission will start accepting applications for medical cannabis dispensary in early 2023.
Meanwhile, starting April 2022, the state Cannabis Regulatory Commission has initiated issuing licenses to medical cannabis dispensary to sell recreational marijuana. Dispensaries will be officially known as alternative treatment centers, and only seven licenses will be issued.
Now recreational marijuana is expected to be legal in New Jersey too, thanks to a ballot initiative that passed in November 2020.
As of April 2022, the 13 recreational dispensaries in New Jersey located in Maplewood, Phillipsburg, Rochelle Park, Bloomfield, Paterson, Elizabeth, Lawrence Township, Egg Harbor Township, Williamstown, Deptford, Vineland, Bellmawr, and Edgewater Park.
The state legislature then passed a bill in December that will allow up to 37 cultivation licenses. This was signed into law in February 2021 after a dispute over underage drug laws between legislators and the governor was resolved.
There are still many unknowns. The state has until August to come up the rules for the recreational program, including how many total dispensary licenses will be available.
Can I currently open a recreational dispensary in New Jersey?
Yes, you can. For now the Cannabis Regulatory Commission has issued seven licenses to medical cannabis dispensaries to sell recreational marijuana.
The Cannabis Market in New Jersey
One thing that’s for sure – there’s good money to be made in legal cannabis in New Jersey if you’re willing to overcome all the bureaucratic red tape and some stiff competition from established players.
The most recent numbers released by the state show all the dispensary companies in New Jersey bringing in hefty yearly revenues:
On the medical side, one of the largest dispensary owners in New Jersey is Curaleaf. In Q1 of 2020 alone, it reported record-high sales of $20 million before taxes and interests across the 17 states it currently operates in.
Other notable companies that you’ll be competing with include:
- Apothecarium Dispensary (Phillipsburg)
- Garden State Dispensary (Middlesex)
- Breakwater Alternative Treatment Center (Middlesex)
- Zen Leaf (Union County)
- Columbia Care (Cumberland)
- The Botanist (Compassionate Care Foundation) (Atlantic)
- Ascend Wellness, (Essex)
- Harmony Dispensary (Hudson)
- Rise (Passaic)
On the recreational side, Marijuana Business Daily estimates that the New Jersey adult-use market will generate $850 million-$950 million by 2024, more than states like Nevada and Oregon.
Even the state itself has estimated that it would need 50-90 more cannabis dispensaries to keep up with demand.
So unlike other markets, there’s no need to worry about oversaturation, especially when retail dispensaries are expected to attract lots of people from nearby states like New York and Pennsylvania.
Cannabis Taxation In New Jersey
Sales tax on medical cannabis products purchased at licensed dispensaries in New Jersey has been done away with from July 2022. In 2019 a law was signed that contained a provision to phase out the sales tax for cannabis products.
How to Open a Dispensary in New Jersey
Now that we’ve covered the basics, let’s get down to brass tacks about starting a marijuana dispensary in New Jersey. These instructions are based on the current regulations for medical marijuana dispensaries, since the rules for adult-use dispensaries have yet to be released.
Step 1: Establish Your Business
New Jersey cannabis companies have to incorporate as non-profits. How you do that is beyond the scope of the article, but it involves creating or getting the documents above (this is from the 2019 application for ATCs, or Alternative Treatment Centers, as New Jersey calls medical marijuana dispensaries) and creating both a standard of board of directors and a medical advisory board.
This is also when you should consider bringing in your first, key directors and managers, preferably experienced in cannabis or at least retail, to help with building your company.
Step 2: Planning
Here, you put together a detailed business plan for your business. This should include:
- Financing plan
- Quality control and quality assurance plan
- Dispensary/operations plan
- Labor compliance plan
- Workforce and job creation plan
- Security plan
- Environmental impact plan
- Anything else you think would help you stand out and attract investors
Step 3: Get Funding
To secure funding for your cannabis business, start with family and friends and with investment firms that specialize in funding cannabis companies, since most banks and mainstream investment firms won’t touch you with a ten-foot pole until federal legalization occurs.
Make sure to keep track of all your sources of funding. You’ll have to list any funding above a certain threshold in your application.
How Much Does It Cost to Open a Dispensary in New Jersey?
Right now the only way to open a dispensary in the state would be to buy an existing MMJ dispensary. This would likely cost you at least several millions dollars.
On the bright side, New Jersey’s recreational law is designed to help smaller businesses get in to the market. It has provisions favoring microbusinesses of 10 employees or less. It also aims to provide a certain number of licenses to female, minority, and disabled veteran business owners, and to businesses in low income “impact zones”.
So you may have a decent shot at opening a recreational dispensary even if you aren’t Mr. or Mrs. Moneybags.
Step 4: Find a Home
Example of evidence of local support from Verano’s New Jersey dispensary application from 2018.
New Jersey requires you to have control of a property in an area approved for a marijuana dispensary ready before you apply for a license. You need to comply with local zoning laws and get proof of support from the city government where you’re locating your dispensary. This could be a copy of a city law or simply a letter of support from the mayor and/or city council.
Your dispensary needs to be a certain amount of distance away from locations like schools and day care centers. Other states require you to locate your dispensary a certain distance from other cannabis businesses as well, though this isn’t a problem in New Jersey yet since so few dispensaries have been approved.
It’s not ideal to have to rent out a property before you can even start opening your business, and having to continue renting it out for months while government officials review your application, but that’s the way it is.
Step 5: Apply for a License
New Jersey doesn’t have any active dispensary application forms available right now to view, but you can view this past example to get an idea of what you’re in for.
Dispensary applications can run into the hundreds or even thousands of pages. You’ll be submitting a lot of the documents you created in the planning phase, plus additional info such as:
- Articles of incorporation/by-laws
- Approval from local municipality
- Mockup of expected exterior appearance of dispensary
The application fee is $20,000, with $18,000 of that refundable if your application is rejected.
Step 6: Setting Everything Up
Now that you have your license, it’s time you start working on your store and the IT side of things. You’ll need a good construction company.
And of course, if you’re not a vertically-integrated company, you’ll have to find cultivators, manufacturers, or distributors that will provide you products to sell. Hopefully you’ll already have some connections with these companies, or you’ve hired an experienced cannabis buyer to manage this aspect of your business for you.
Tech is a critical aspect of your dispensary too, definitely not an area to cut corners on. Your POS – and therefore all your sales – requires fast and reliable hardware and software.
New Jersey requires you to maintain a security surveillance system and to retain your security footage for a certain number of days, or risk having your license revoked for lack of compliance. And you have to maintain impeccable records of all your inventory, finances, personnel, and other aspects of your business.
For your IT you will need at least the following;
- A point of sale software
- POS tablets or terminals
- Receipt printers
- Cash drawers
- Barcode scanners
- A network switch
- Patch cables
- Security cameras
- An NVR
- Wireless access point
- Other back-office hardware and software
These are all links to our new cannabis e-commerce and IT services venture, Cure8, where you can find recommended, curated dispensary hardware, as well as request services including design, planning, installation, and management.
We recommend you rely on a partner like Cure8 to set up your IT for you. Your tech is your foundation – it’s better to get it right the first time and have it propel your growth, rather than do it haphazardly and have to redesign your IT at much larger scale and complexity later on.
Step 7: Launch
With everything good to go, it’s time you launch your store.
How to get the word out? Double-check New Jersey law to see what options you have. The New Jersey Administrative Code mentions some restrictions on what you can put on the outside of your business (black text on a white background only on signs, labels, and brochures, with no illuminated signs allowed) and prohibits dispensaries from advertising their pricing.
Otherwise it seems that most forms of advertising and marketing are open to you, including TV, radio, and print ads, flyers, trade shows, and PR/press coverage.
Can I Start a Cannabis Delivery Service in New Jersey Too?
Only the 20 licensed medical dispensaries in the state are currently allowed to deliver.
You can apply for a delivery license for adult-use cannabis once the recreational program opens up, however.
Need Help with Tech? Rely on Cure8
Cure8 is experienced at providing IT services to businesses in the cannabis industry. We’re proud members of the NCIA and CCIA, and we’re here to help you with everything from planning to installations to management of your POS, seed-to-sale system, networks, and security systems.
We’re here to help you both with long-term planning and scaling of your dispensary, as well as swift resolution of issues such as POS and network outages and security breaches.
Otherwise best of luck with your new dispensary!
Read more about Dispensary Point of Sale Systems