MANUFACTURING
New Jersey ’ s Cannabis Industry is Recruiting
Start-Ups Face Hurdles
Larry Feld Contributing Editor
While using cannabis has only been legal in the state since April 21 , 2022 , there are currently ( according to Data . NJ . gov ) 30 cannabis retail centers ( nine of them strictly medicinal outlets ) already doing business , with many more on the near horizon . As for the cultivation side of the business , ( growing , manufacturing , and distribution of cannabis ) on March 15 , 2022 , the state opened up the opportunity to apply for one of 37 initial Class One cultivation licenses being offered , officials reportedly received over 500 applications in the first few days .
The cannabis business is not for the faint of heart . Complex regulations , as well as legal , accounting , and banking challenges stand in the way of success . Even so , the race to profit from this new industry is underway , leading professional advisors , educational institutions , and now the state ’ s business development facilities to vie for the opportunity to guide progress .
New Jersey is actively encouraging locally owned and operated businesses over large , outof-state corporations that are currently dominating the marketplace . In addition to increasing employment opportunities and creating local , community-based retail operations , the state is trying to build stability to what is anticipated to be a significantly increasing demand .
In October , for example , the New Jersey Business Action Center ( NJBAC ) announced that a cannabis training academy will launch in 2023 , providing technical assistance to entrepreneurs establishing cannabis businesses in New Jersey . Funded by the New Jersey Cannabis Regulatory Commission ( NJ-CRC ), the “ academy ” will provide free technical assistance in building business plans and support completing other aspects of license applications and mentorship to cannabis business owners .
“ We have emphasized equity and accessibility in the application process ,” Commission Vice-chair Sam Delgado , who sits on the Audit Committee said , adding “ This program will help ensure aspiring entrepreneurs have the optimal business know-how to give them the best chance for success in the cannabis space . The Cannabis Training Academy will begin the needed training and guidance that will help individuals , and assist the budding market ’ s stability and success .”
The NJBAC ’ s proposed curriculum includes modules designed to help participants decide if a cannabis business is right for them and will include business plan development as well as a Legacy to Legal course . The state ’ s training will also open licensing opportunities to those who may not otherwise have the resources to pursue this new market . Some program resources will target “ Specially Designated Categories ,” which include social equity businesses , diversely
owned businesses , microbusinesses , and Impact Zone businesses . There will be a 10-week accelerator track to take conditional license applicants through the initial application process , and a separate track to help them convert to annual licenses .
“ The state is smart to provide support to help young entrepreneurs ; there are a lot of challenges to a cannabis start-up ,” notes Todd Polyniak , CPA , partner with SAX LLP and leader of the firm ’ s cannabis services team . “ With projections of cannabis becoming a $ 2.3 billion industry in New Jersey by 2026 , there will be a growing demand for licenses .”
One major challenge : Finding a municipality with qualifying real estate that is willing to host your cannabis enterprise .
Location , Location , Location
“ Municipalities , in general , have been positive about cannabis legalization ,” notes Frank Marshall , Associate General Counsel at the NJ League of Municipalities Association . One major issue is zoning ; municipalities have been examining zoning to determine where the most appropriate locations exist to zone for cannabis , and where to prohibit these enterprises .
“ It boils down to planning ,” Marshall says . “ Municipalities want to be thoughtful with regard to how many licenses ( retail , wholesale , cultivating , etc .) and what terms should
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Background photo : Getty Images / iStockphoto / deimagine
New Jersey Cannabis Regulatory Commission Vice-chair Sam Delgado
Todd Polyniak , CPA , partner with SAX LLP and leader of their cannabis services team
Frank Marshall , Associate General Counsel at the NJ League of Municipalities Association
January 2023 COMMERCE 17