Micro License NJ: Legal Essentials for Cannabis Microbusinesses

Micro License NJ: Legal Essentials for Cannabis Microbusinesses

Cannabis microbusinesses have a smaller footprint than a regular cannabis business, concerning its business operations, capacity, and quantity of product. To help foster their development, New Jersey’s cannabis regulations establish certain incentives for a micro license NJ, including significantly lower licensing costs.

Getting any startup off the ground is no easy feat. To take advantage of the cannabis licensing opportunities available for microbusinesses, it is essential to work with an experienced New Jersey cannabis attorney who can walk you through the licensing process and position your business for success.

What Is a Cannabis Microbusiness?

As the name suggests, a cannabis microbusiness is a licensed business with a relatively small operation. In New Jersey, microbusinesses can operate as a cannabis cultivator, manufacturer, distributor, retailer, or delivery service. Below is a brief summary of each license category:

• Class 1 Cannabis Grower license, for facilities involved in growing and cultivating cannabis; Class 2 Cannabis Processor license, for facilities involved in the manufacturing, preparation, and packaging of cannabis items;
• Class 3 Cannabis Wholesaler license, for facilities involved in obtaining and selling cannabis items for later resale by other licensees;
• Class 4 Cannabis Distributor license, for businesses involved in transporting cannabis items in bulk intrastate, from one licensed cannabis establishment to another;
• Class 5 Cannabis Retailer license, for locations at which cannabis items and paraphernalia are sold to consumers; and
• Class 6 Cannabis Delivery license, for business providing courier services for a licensed cannabis retailer in order to make deliveries of cannabis items and related supplies to a consumer.

To be licensed as a microbusiness in any of the above categories, a New Jersey cannabis business must have no more than 10 employees at one time and a facility of no more than 2,500 square feet. Each license category also had additional restrictions, which are discussed below.

Conditional Cannabis License vs. Annual Cannabis License in NJ

Microbusinesses may also consider applying for a conditional cannabis license. A conditional license allows you to establish your cannabis business but not legally operate it. The advantages are that a conditional license applicant does not need to own or lease a site or obtain municipal approval to receive approval. The licensing fees are also substantially reduced. This can be a good option if your business is starting to develop but isn’t quite ready to open its doors. Once you are ready to operate, you must apply for a conversion license. With a conversion license, you can legally open for business.

Requirements for a Micro License NJ

Microbusinesses must satisfy additional mandatory application requirements, pursuant to N.J.A.C.17:30-6.7. Specifically, you must include documentation that you and your proposed cannabis business are compliant, and will continue to comply, with the requirements for microbusinesses, which include requirements that:

• The facility of the cannabis business will take up no more than 2,500 square feet; b. The microbusiness will have no more than 10 employees;
• For Retailers and Manufacturers, the microbusiness’s monthly volume will not exceed 1,000 pounds of cannabis;
• For Cultivators, the microbusiness will not exceed a monthly inventory of 1,000 cannabis plants;
• One hundred percent of the ownership interest in the microbusiness license applicant or license holder are held by current New Jersey resident(s) who have resided in the State for at least the past two consecutive years, at the time of application; and
• At least 51 percent of the total number of persons included in the microbusiness license application or license holder, including all owners, principals, and employees, are residents of either the municipality in which the microbusiness is or will be located, or of a municipality directly bordering such municipality, at the time of the application.

Advantages of NJ Micro License

There are several advantages to seeking a micro license. Microbusiness applications are prioritized over standard cannabis business applications in every category. They are also exempt from the requirement to have an attestation signed by a bona fide labor organization stating that the license applicant has entered into a labor peace agreement with the bona fide labor organization in any license application or as an ongoing material condition of maintaining a license.

Microbusinesses are also allowed to expand and grow. A microbusiness holding an annual license may submit an application to convert from a microbusiness to a standard cannabis business. There is, however, one notable restriction for microbusinesses — a licensed business may not sell or transfer its license.

NJ Micro Grow License Cost

Micro cannabis businesses are only required to pay 50 percent of the amount of a standard license application, renewal, or other fee. Under the CRC’s current fee schedule, the NJ micro grow license cost are as follows:

Application Fees for Micro License NJ

• Application Submission Fee for Conditional License:  $100
• Application Submission Fee for Annual License: $200
• Application Approval Fee for Conditional License: $400
• Application Approval Fee for Annual License: $800
• Conditional Conversion Submission Fee: $100
• Conditional Conversion Approval Fee: $400

Licensing Fees for Micro License NJ

• Licensing Fee (All Categories): $1,000
• Microbusiness Conversion Approval Fee: $800

The full Fee Schedule is available here.

Consult With an Experienced New Jersey Cannabis Attorney

At Scarinci Hollenbeck, the attorneys of our dedicated Cannabis Law Group advise prospective cannabis businesses of all sizes. We understand the unique challenges that microbusinesses and other cannabis startups face and work diligently to tailor our services to their needs. To find out more, we encourage you to contact a member of our team today.