Regulators will begin accepting applications for delivery licenses Sept. 27, with priority given to social equity applicants.
Cannabis delivery services will soon be popping up across New Jersey after the Cannabis Regulatory Commission (CRC) announced plans to start accepting license applications Sept. 27 for delivery businesses.
The Class 6 Cannabis Delivery license allows licensees to transport retail-purchased cannabis products to consumers’ homes.
Sept. 27 also marks the opening of the application process for adult-use cannabis wholesale and distribution licenses. A Class 3 Cannabis Wholesale license allows licensees to store, buy and sell bulk cannabis products, while a Class 4 Cannabis Distribution license allows licensees to transport bulk cannabis products among state-licensed cultivators, manufacturers and retailers.
Licensing priority for all three license types will be given to designated social equity and diversely owned business applicants during an initial 90-day application period, which runs Sept. 27 through Dec. 26. A second 90-day application period for these applicants will run from Dec. 27 through March 26. On March 27, the application process opens for all other applicants.
“The launch of these new cannabis business license classes represents a significant step in the continued growth and diversification of New Jersey’s cannabis industry,” CRC Chairwoman Dianna Houenou said in a public statement. “We now have more medicinal and recreational businesses open, so applicants for these additional license classes have a more robust industry to serve. We are committed to fostering inclusivity, empowering local communities, and providing opportunities for those typically underrepresented who want to enter the cannabis industry.”
The CRC hatched the plan to issue cannabis delivery, wholesale and distribution licenses to social equity applicants at its June 1 meeting, where Commissioner Charles Barker said not enough has been done since New Jersey’s adult-use market launched in April 2022 to help entrepreneurs who have been impacted by the war on drugs, according to the New Jersey Monitor.
“Based on our current framework, I don’t believe social equity businesses—those most harmed by the failed war on drugs, that represents the people and communities that we want to see in the game—they’re not seeming to make it through the process to be considered for an award, let alone open up a business,” Barker said at the meeting.
Fewer than 250 of 947 total social equity applicants had received approval as of December, officials noted at the CRC’s June meeting.
Joshua Horn, partner at Fox Rothschild and co-chair of the firm’s Cannabis Law practice, is encouraged by regulators’ steps toward social equity in New Jersey’s cannabis market.
“If you’re a minority-owned transportation company or a woman-owned transportation company and you have the first bite at the apple to get one of these licenses, … from a business standpoint, everyone always wants to be the first to market,” Horn told Cannabis Business Times. “If you’re the first to market, then you have the better opportunity to be the first to generate a market percentage that you control.”
To further assist applicants in the upcoming application rounds, the CRC will hold an educational webinar from 2 to 4 p.m. on Thursday, Sept. 14. The webinar will include information about the application process, eligibility criteria, using the application portal and the specific license types available.
The CRC will accept and review the applications on a rolling basis. Adult-use cannabis businesses may be vertically integrated with multiple license types and regulators have not placed a cap on the total number of cannabis licenses issued.
Horn said it is especially significant that New Jersey allows independent businesses—those that do not also hold cannabis retail licenses, for example—to provide home delivery of cannabis products.
“Now you have an application process, a formal application process like you would for any other cannabis license in New Jersey, but solely and exclusively to be providing transportation services,” he said.
While the application process doesn’t open for a few more weeks, Horn said those vying for cannabis delivery licenses can start business preparations now. Applicants should review New Jersey’s delivery rules, he said, paying close attention to rules about GPS and security requirements.
“They need to get all that kind of programmatic stuff squared away with their vehicles to ensure that they comply with the regulatory environment,” Horn said.
As far as growing pains, Horn foresees supply and demand challenges on the horizon, depending on how many applicants are vying for cannabis delivery licenses.
On the whole, Horn said the rise of cannabis delivery stems from the COVID-19 pandemic, when many states temporarily relaxed their regulations to allow for curbside pickup and delivery to protect the health of patients and consumers. Many people are now accustomed to these services, and Horn expects the delivery model to take off in New Jersey and beyond.
“New Jersey’s got a very large population, … so I think there’s going to be a lot of traction for this type of service,” he said, referring to the roughly 9.2 million people who make up the nation’s most densely populated state. “I think it’s going to be the harbinger of probably other states to come to acknowledge these types of licenses.”