New Jersey Marijuana Legalization: How To Get A Marijuana License In Cutthroat Weed Market

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Want to sell marijuana – legally – in New Jersey?

Even before state lawmakers consider enabling legislation, some imperatives are emerging for those looking to acquire one of New Jersey’s precious few marijuana licenses, based on interviews with consultants in the trade, lawyers and other experts.

A location is necessary – a place to sell weed, with a landlord who allows it and a town that won’t stop it. Experience selling the drug will be preferred, even though it remains illegal under federal law. Applicants should have a perfect criminal and financial background, and investors to bankroll the whole thing.

And even then, one expert put the odds of receiving one of New Jersey’s golden tickets as high as 15 to 1.

Nonetheless, it’ll likely be a feeding frenzy.

New Jersey is primed to be among the toughest regulators in the country, with a reported 80 licenses to divvy up, less than a quarter of the 350 licenses that cannabis operations expert Brian Staffa believes are required to ensure the Garden State’s fledgling marijuana market doesn’t fall flat.

“The state is trying to balance the logistics of having thousands of people apply for hundreds of licenses,” Staffa said. “As of today, they have no department to facilitate this.”

Potential retailers will be required to submit “merit-based applications,” pitching state officials on what makes their business special – akin to a cannabis-infused game of “Shark Tank.”

It’s been a different story in Oregon and Colorado, where municipal approval all but guarantees a proprietor will receive a state license to sell cannabis. In New Jersey, applications will be scored on their:

•Operations plan, where an applicant’s experience in the marijuana industry – particularly in other states – can come into play.

•Security plan, including cameras and areas where the drug will be securely stored.

•Business history, giving applicants a chance to show regulators “what makes this team different.”

•Real estate location, including a signed deed, lease or notice from a town that indicates cannabis sales will be permitted.

And there’s no margin for error, Staffa said. One mistake – a bad loan or a DUI arrest by any member of the team applying for a license – spells doom for an application, based on his experience in other states with legal weed.

It’s a one-strike rule.

Last laugh

But the cutthroat nature of the marijuana industry has done little to dissuade entrepreneurs from looking to the cannabis industry as the next big thing.

In January, the New Jersey Cannabis Symposium welcomed over 750 people – applicants, investors and landlords who more resembled stock brokers than stoners – to the New Jersey Performing Arts Center in Newark. Check out highlights from the event in a video at the top of the page.

Donna M. Rappa wasn’t there, but had already decided to jump headfirst into cannabis after a lifetime in marketing and communications at nursing homes and assisted living facilities, watching how medical marijuana changed patients’ lives.

The Toms River resident has been a self-proclaimed “good girl” through it all: “I’ve never done a drug in my life, and I’m certainly not going to start at the age of 65,” Rappa said.

But Rappa’s pitch to her husband was simple: “A lot of people need help, and medical marijuana is a way to provide it,” she told him. “And there’s money to be made.”

Fast forward a few months, and the ball has started rolling, albeit slowly: Rappa has partners and investors, and they’ve already eyed a few possible locations for a dispensary.

And she’s not afraid of a little competition.

“I’m going to have the last laugh,” she said.

But not everyone is sold on the idea of legal cannabis. A Fairleigh Dickinson University poll released last week revealed that 42 percent of New Jerseyans supported legalization, while 26 percent favored decriminalization and 27 percent wanted to keep the state’s weed laws the way they are.

“We don’t want the saturation or the perception that there is a dispensary on every corner,” Staffa said. “It’s going to be hyper competitive. You’re trying to start a business and it’s already a competitive state.”

The Garden State would join Massachusetts – and soon, Vermont – as the only states east of the Mississippi River to legalize the drug, opening it as a “destination” to the 130 million people who live within a day’s drive of legal weed, Staffa said.

New Jersey would be the 10th state to legalize recreational marijuana.

Location, location, location

The most obvious hurdle for applicants to clear is location. An application with a commitment from a cannabis-friendly city is more likely to get a license than a similar application in a town that hasn’t taken a stance on the issue, Staffa said.

While real estate investment trusts have retrofit or developed cannabis cultivation facilities in other states, “there’s not a lot of help” for retail dispensaries, said Marianne Bays, a cannabis industry consultant with Kalyx Properties, a real estate investment trust with properties in Colorado, Oregon and Washington.

“People who have an interest in launching a dispensary business just need to look for a town that appears to be friendly,” she said. “Asbury Park has stepped up and said they’re open to it. Jersey City is open to it. But we’re a long way away from knowing what other towns are going to be doing.”

A handful of towns – including Point Pleasant Beach, Toms River and Seaside Heights – have formally banned marijuana sales or discussed doing so.

But there could be prime locations elsewhere, including just outside of the towns that have preemptively banned marijuana sales: “The same strategy with liquor licensing applies with Ocean City,” Staffa said, referring to the dry Cape May County town. “We know cannabis is not going to be allowed in Ocean City. But right on the outskirts is in play.”

Any legalization bill is expected to go through numerous changes before it reaches the governor’s desk. Even if adoption comes quickly, the first legal, recreational joints would still be years away while the state sets up and staffs its marijuana division within the Attorney General’s Office.

But Murphy’s administration has signaled change, with the governor already signing an executive order to expand the state’s medical marijuana program, which currently licenses only six dispensaries.

And in the Legislature, the Assembly agriculture committee has advanced a bill that would make New Jersey the 16th state to legalize hemp, a material used in clothing, clothing, paper and oils that contains trace amounts of tetrahydrocannabinol (THC), the psychoactive component in marijuana.

“The market is hungry,” Staffa said.