Understanding Cannabis Licenses

As New Jersey’s legislature works to iron out details for their cannabis market, there is an agreement on what type of licenses will be handed out. Much like driver’s and operator’s licenses, in state, there will be multiple classes of licenses for the cannabis industry. In this case there will be six under the New Jersey Cannabis Regulatory, Enforcement Assistance, and Marketplace Modernization Act which are the following:

• Class 1 Cultivator License: This allows the holder to grow the product. They are also allowed to sell it to other producers or retailers, but not the consumer.
• Class 2 Manufacturer Licenses: This allows for the packaging for sales to other sellers but like the Cultivator license can’t be sold to individual consumers.
• Class 3 Wholesaler License: This allows storage and sale for transport other distributors.
• Class 4 Distributor License: This allows bulk transport between licensed wholesalers intrastate. It also allows for temporary storage and warehousing to carry these out.
• Class 5 Retailer License: Allows the holder to sell to consumers directly to consumers and set up their own shops.
• Class 6 Delivery Licenses: Allows shops and delivery drivers to deliver their products.

In addition to the six licenses described above, small businesses (“microbusinesses”) will be permitted to apply for any of the six classes of licenses so long as they employ no more than 10 employees, operate a cannabis establishment that occupies no more than 2,500 square feet and possess no more than 1,000 cannabis plants each month.

One draw back is aside from microbusinesses, the current licensing is such that once you acquire said licenses, there will not be any vertical integration between the levels for 24 months, with the exception of alternate treatment centers that focus on medical cannabis.[1]

With various states establishing markets, there will be different rules on how distributors and cultivators operate. New Jersey’s is just an example of this. Be sure to check what each state offers before conducting intrastate business.

[1] https://re-nj.com/planting-the-seed-for-a-greener-new-jersey-the-intersection-of-legal-cannabis-and-real-estate-in-the-garden-state/