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Updated July 24, 2021

New Jersey hasn’t always been the most cannabis-friendly state in the US. While the Compassionate Use Medical Marijuana Act was signed into law on January 18, 2010, initial enrollment was small thanks to rigid limitations, high costs, and resistance from Governor Chris Christie. In 2011, New Jersey was even described as having the strictest medical marijuana law among the 16 states where it was permitted at the time.  

Fast forward to 2020, when voters passed a statewide ballot measure to legalize recreational cannabis in New Jersey during the presidential election. You can expect recreational cannabis sales to be legal in the state soon, especially now that the Cannabis Regulatory Commission is formally up and running. This Commission is tasked with regulating the recreational cannabis market, as well as regulating licensing for new growers and dispensaries.  

If you’ve ever considered the idea of opening a dispensary, now’s a great time to put your plans into action. Here are the top considerations you should know to start a dispensary in New Jersey.

Applications

Right now, there are still many unknowns when it comes to applications and licensing. The bill required the state to create rules for the program within 180 days of it being signed into law. This means that the New Jersey Cannabis Regulatory Commission (CRC) has a deadline of August 22, 2021 to release application requirements.

During the July 13, 2021 meeting, the CRC indicated that they will move forward with an initial set of guidelines so they can adhere to the laws outlined in the legislation; however, a more robust set of guidelines will be developed. The bill also requires them to start accepting applications within 30 days of releasing the requirements. This means that the CRC will be opening the application submission process by September 21, 2021 at the latest.   

While there will be a cap on the amount of licenses permitted, the only cap that is currently known is on the grower licenses. Statewide, cannabis grower licenses will be capped at 24 for the first 18 months and then 37 for the first two years. It is not yet known what the retail cap will be and there may be additional restrictions at the local county or city level. There is some good news for New Jersey residents that identify as one of the social equity designations. A mandatory 30% of all licenses, and at least 25% of microbusiness retail licenses will be held for female, minority, and disabled veteran business owners, as well as businesses in low-income impact zones.

Don’t wait to start on your application. Applications can run hundreds or thousands of pages long. You’ll need to submit proof of real estate acquisition, many planning documents, as well as articles of incorporation, approval from your local municipality, and a mockup of the security camera blueprint for your dispensary. 

The state application fee is $20,000, but $18,000 will be returned to you if your application is rejected.

Securing Capital

You’ll not only need to secure capital for the large application fee, but also for product, staffing, rent, security, and more. Note: right now, the only way to open a dispensary in the state while the recreational cannabis laws are pending is to buy an existing medical marijuana dispensary, and this could cost you millions. The good news is New Jersey’s new recreational law will help smaller businesses with 10 employees or less get into the market, so you won’t need to be rich to get a piece of the pie. Still you should plan on having between $250,000 – $1 million to open a dispensary in New Jersey. 

Because cannabis is still illegal at the federal level you will not have access to bank loans. In fact, you won’t be able to secure a bank loan for property if the intended use is for a cannabis business.

Most investment firms won’t fund start-up cannabis companies, so look to friends, family members, and your own savings account to secure capital first. There are also investment firms that specialize in funding cannabis companies that you might want to look into. Expect to list all your funding sources in your application.

Staffing for Cannabis

Before you open your doors, you’ll need staff members hired, trained, and ready to work. Expect fierce competition among cannabis dispensaries for knowledgeable and skilled candidates. The employees you hire should have excellent interpersonal skills for the customer-facing role but also a thorough understanding of the different strains, terpene profiles, and cannabinoid content for the products you sell. The importance of knowledgeable budtenders cannot be overstated. 

When creating a hiring plan, you’ll want to factor in some time for background checks, budtender training, as well as training for your security protocols. Expect to pay anywhere from $12 to $16 per hour for this retail dispensary job. 

Besides the customer-facing roles, you’ll likely also need to consider hiring an accountant, a custodian, security personnel, an HR person, and a marketing expert. 

Getting Product

Vertical integration is not permitted in New Jersey, so you cannot produce and sell your own product. You’ll need to build relationships with cultivators, manufacturers, wholesalers or distributors that will provide you with cannabis products to sell in your new dispensary.

Hopefully, you already have some contacts in your network. Before you reach out, however, make sure you’ve researched the legal cannabis products you’re allowed to sell and which ones you’ll need to avoid in New Jersey. You should also consider your audience’s needs to determine what to stock for your market, whether that’s low THC products, high CBD strains, vapes, etc. 

Compliance Considerations

You already know what you’re entering an industry with a high standard for legal compliance. The cannabis industry is highly regulated in every state, and New Jersey will not be an exception to this rule. Do your due diligence and expect to satisfy stringent requirements once the final regulations become available. Requirements will likely include residency, background checks, age requirements, and location regulations. For your location in particular, you’ll have local zoning laws to comply with and will require proof of support from the city government before you’ll be able to get a license. You’ll need to be a certain distance away from school and daycare centers, and may even need to distance your location away from other cannabis businesses, too.

It’s also important to note that some local municipalities within New Jersey have outright banned or restricted marijuana in anticipation of the pending legalization. You might find opening up a dispensary especially challenging or impossible in these areas. 

How to Market Your New Dispensary & Stand Out

Just like with everything else in the cannabis industry, marketing and advertising are regulated and restricted. For example, the New Jersey Administrative Code includes restrictions on what you can put on the outside of your business and restricts advertising of pricing, as well.

Online advertising and marketing will be your best bet, so make sure you invest in digital marketing. Create branding and a website that will help your cannabis dispensary stand out from what will surely be a crowded market. Discover what you can and can’t post on paid media ads and social media before you jump the gun, learn how to create an influencer campaign, and don’t forget to advertise on Google My Business. To help improve customer retention and loyalty, you might want to consider creating a customer loyalty program, too.

You might know the cannabis industry inside and out, but marketing might be a very different ballgame. If so, consider outsourcing your marketing needs to Mary Jane Marketer, a full-service cannabis marketing agency that can do it all from writing your application to launching your dispensary. Mary Jane Marketer also offers an online DIY bootcamp for those interested in learning how to write their own application. The New Jersey Recreational Cannabis Retail Application Bootcamp is open, learn more and enroll today!  

Get our New Jersey Recreational Cannabis Licensing Guide Today!

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