Cannabis Need-to-Know: What’s something else we should know about doing business in the cannabis space in New Jersey?

Eric Altstadter
CPA, National Cannabis & Hemp Practice leader
EisnerAmper LLP:

New Jersey legalization will still take time. Voters approved a constitutional amendment to legalize marijuana, yet legislation is needed to create the framework for legalizing the personal use of adult use recreational cannabis. One of the points of contention is the governor’s desire to include penalties for underage users. State Sen. Anthony Bucco (R-Denville) said these issues emphasize his concern that “the process to legalize marijuana moved way too quickly and was backwards from the beginning.” He also said, “There are extremely complex criminal, regulatory, social and tax implications that should have been figured out before a question was placed on the ballot.” 

Guillermo C. Artiles
Chair, Government Affairs & Cannabis practice groups
McCarter & English:

Once we work out the kinks in both the existing medical market and future adult-use markets, New Jersey will be one of the most attractive cannabis markets in the United States. While neighbors to the north and south of New Jersey will also be online soon with adult use, New Jersey remains the most densely populated state, with superb logistical infrastructure — by land and sea — and a committed government that will ensure its ultimate success.

John D. Fanburg, Esq.
Managing member and co-chair, Cannabis Industry Practice
Brach Eichler LLP:

Doing business in New Jersey will be initially very tricky from a regulatory perspective, and expensive in terms of investment, regardless of which aspect of the cannabis industry you are looking at. Over time, the process will get easier and more robust as the industry matures, regulations evolve and New Jersey citizens adapt to the new laws. More towns will allow cannabis retail establishments and, hopefully, the black market associated with cannabis will begin to shrink. It will not likely ever go away, but if New Jersey is careful about taxing this industry, the criminal side of cannabis sales should drastically be reduced. This is the key to establishing a robust and legal marketplace.

Victor J. Herlinsky Jr.
Co-chair, Cannabis Industry Practice Group
Sills Cummis & Gross P.C.:

The key to any successful cannabis enterprise will be finding the appropriate location. Finding a receptive municipality is no easy task. Many municipalities have chosen to take a wait-and-see approach. Furthermore, the local zoning that has been approved for development of cannabis businesses are often in industrial or other out-of-the-way locations, which are not necessarily conducive to thriving retail operations. I believe that the correct formula for finding a location to start your cannabis business in New Jersey must include strong local connections, either through professional consultants or equity partners.

John V. Pellitteri
CPA, partner, Cannabis Practice leader
Grassi Advisors & Accountants:

The cannabis industry in a densely populated area like New Jersey will be huge, so get in early. Even though the new license applications are not out yet, entrepreneurs are already getting their feet wet by pursuing investors, educating themselves on industry nuances, learning how successful cannabis businesses operate in other states, identifying location options and conducting other preliminary research and planning. Operating in this industry will be unlike anything you have experienced before, so make sure you have the right advisers by your side — ones who understand and can help you face the challenges and opportunities that lie ahead.

Jennifer Roselle, Esq.
Co-chair, Cannabis Law Group
Genova Burns:

As prospective business owners develop strategies to maximize success on their applications, the labor compliance aspects can’t be overlooked. Our experience during the last round of medical applications was that this was often a last-minute discussion as the application deadline drew near. Labor compliance goes beyond having a labor peace agreement to submit as part of the application process. The legislation is clear that this document — or the eventual collective negotiations agreement — is a condition of licensing. In other words, the relationship created during application continues long after the application is submitted.

Lee Vartan
Co-chair, Cannabis Law Practice
Chiesa Shahinian & Giantomasi P.C.:

Two immediate thoughts come to mind. First, New Jersey is an extraordinarily exciting place to be in 2021. The excitement around November’s referendum and the recreational market is palpable. Weekly, I have been fielding calls from entrepreneurs big and small looking to enter the New Jersey market. Second, and related, New Jersey is unique. We are famous for our “home rule,” so it is so important to start engaging with the licensure process now — even though the process is not yet open. It is never too early to start meeting with political, business and community leaders in your would-be host community to win their support and endorsement.