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Garden State Alert: Preparing for Adult-Use Legalization in New Jersey

By Jennifer Cabrera

Dec 22, 2020

Last week the New Jersey legislature approved two bills that will create a legal adult-use cannabis market and decriminalize possession of limited amounts of cannabis flower. With its plan to regulate and tax adult-use cannabis sales underway, the Garden State is easily positioned to be the East Coast’s cannabis leader in sales and regulatory practices that support and promote small, locally-owned businesses and equitable ownership. Advocates, consumers, and others with business interests can now rest easy that this time next year will look and feel quite different for Garden State cannabis.

Pending signature from Governor Phil Murphy over the coming days, the new decriminalization law will take effect by the end of March 2021, at which time possession of up to six ounces of cannabis will become legal for adults 21 and older. The law also calls for the creation of a five-member Cannabis Regulatory Commission that will issue regulations and create a licensing system for cultivators, processors/manufacturers, wholesalers, distributors, retailers, delivery services, and cannabis testing labs. It is expected that regulations will be issued by June 2021.

Some market restrictions will apply for the first two years, including a prohibition on vertical integration and a cap of 37 cultivation licenses. The law also permits municipalities to issue local licenses and restrict or cap cannabis establishments within their borders.

With the benefit of perspective and opportunity to watch legalization roll out in other states, New Jersey’s expanded legal cannabis market is intentionally and thoughtfully structured to promote small businesses and social equity. For example, 25 percent of licenses must be distributed to microbusinesses, which are locally-owned and employ ten or fewer employees. 30 percent of licenses must be distributed to minority, women, or disabled veteran-owned businesses. Microbusinesses can obtain any of the six license types through a simplified application process, and they are omitted from the cap on cultivation licenses.

Applications for adult-use cannabis business licenses are expected to become available in summer 2021. Read our recent press release about last week’s New Jersey announcement here and contact Vicente Sederberg’s NJ-based attorney Jennifer Cabrera, at 917-398-9081 or j.cabrera@vicentesederberg.com to discuss opportunities to get started—or expand—in the Garden State!

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