New types of New Jersey cannabis licenses available in 2023
The roll-out of New Jersey’s adult-use cannabis program has come in stages with cultivation and manufacturing license applications available three months prior to the retail applications. Further, while over a thousand applications for different types of licenses have been received, to date most of the adult-use cannabis in New Jersey’s legal market comes from former and current medical cannabis licensees with only 18 new, adult-use only licenses issued as of November, 2022. However, things are speeding up, with the New Jersey Cannabis Regulatory Commission (CRC) having licensed nearly half as many applicants at their last October meeting (296) as they had so far this year.
Another bright spot is that, after over a year delay, the CRC has published rules and regulations for three new license types: Delivery, Distribution, and Wholesale Licenses. These 3 license types, while ancillary to the cultivation, manufacture, and retail sale of adult-use cannabis, are still highly anticipated for the unique market segments they will open up.
Delivery: Delivery licenses are seen a s a relatively low cost way for many to enter the cannabis industry. Delivery licenses allow 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. A major thing to note is that Adult-Use Retailers can deliver their own products, so any Delivery Licensee will need to create a reason for these Retailers to use their service, such as being able to deliver for less or with more efficiency.
Distribution: Distribution licenses are similar to delivery licenses; except they work at the wholesale level. In other words, Distribution Licensees will operate similarly to UPS, accepting products from cultivators and manufacturers and transferring them exclusively to a licensed cannabis operator. Just like retailers, cultivators and manufacturers are allowed to transport their own products, so a Distribution Licensee will need a business reason to entice cultivators and manufacturers to use their distribution services. Also, Distributor Licensees are strictly service providers – they do not actually take title/ownership of the products they distribute.
Wholesaler: This is a particularly unique cannabis license type that is found in few other states. Wholesaler Licensees operate much like Distributor Licensees in that they do not produce cannabis products of any kind, nor do they have the legal right to deliver cannabis directly to consumers, only cannabis licensees. What sets them apart, however, is that Wholesaler Licensees can purchase and sell cannabis products. 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. Wholesaler Licensees will operate similarly, purchasing products from cultivators and manufacturers, packaging under their own label (if they so choose), and then re-selling those products to licensed retailers. In other words, the Wholesaler License is perfect for a white labeling play.
All of the above licenses are expected to become available early in 2023, though no licensing window has been announced to date. Please email us at [email protected] for help and information on how to better prepare to take advantage of these upcoming opportunities.