The New Jersey Economic Development Authority will announce Wednesday morning that applications for Phase 1 of the $10 million Cannabis Equity Grant Program — which can provide startups with grants of as much as $250,000 — will open at 9 a.m. April 20.
That’s 4/20, for those who get the reference.
EDA officials said the Cannabis Equity Grant Program is focused on supporting businesses and startups in the recreational cannabis industry and ensuring communities that were adversely impacted by the War on Drugs have equitable access to the industry.
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In an effort to ensure these grants reach those communities, 40% of the Phase 1 Joint Ventures Grant funding is reserved for qualifying social equity applicants primarily characterized as those who have previous cannabis convictions or live in economically disadvantaged areas.
Additionally, 5% of the total program funding is reserved for businesses located in Impact Zones, which are areas targeted based on previous levels of marijuana arrests, population, unemployment rates and other socioeconomic factors.
Here’s what you need to know about the program:
- The goal of the program: The Joint Ventures Grant aims to support businesses that do not need technical assistance, but still have carrying costs and capital issues associated with converting their conditional license to an annual license.
- The allocation: The Joint Ventures Grant will allocate a total of $6 million in funding to 24 entities that have a conditional or annual license, have obtained site control over their real estate and have municipal approval.
- How will the distribution go? This grant will be disbursed in two rounds, with the first allocation in the amount of $100,000 occurring upon the execution of the grant agreement. The second disbursement of $150,000 will occur once the grantee receives its annual license and demonstrates that it utilized the first disbursement for eligible costs.
- Who’s eligible? A free eligibility assessment tool is available online for those looking to verify if their business meets the requirements. Eligible applicants must have formed their business after March 9, 2020, and employ 50 or fewer full-time employees.
- What grant can be used for: Eligible uses for the Joint Ventures Grant include expenses such as rent and mortgage payments, payroll and independent contractors, utilities, legal, accounting, marketing and more.
- And if you’re not eligible: Applicants who are not eligible for the Joint Ventures Grant may qualify for Phase II of the program, which will launch later this year. The Phase II Seed Equity Grant of $150,000 is solely for applicants who meet the New Jersey Cannabis Regulatory Commission’s criteria for social equity and have obtained a conditional license but have not secured the real estate or municipal approval and need assistance in converting their conditional license to an annual license. Additionally, all applicants who do not qualify for the Phase I grant will be connected to training and other programmatic resources.
EDA CEO Tim Sullivan said ensuring the state’s cannabis program came with social equity has been a key component.
“Since cannabis legalization more than two years ago, the NJEDA has had impactful discussions with cannabis startups, community leaders and advocates in order to create a program that brings equity and economic opportunity to communities and individuals who have been disproportionately impacted by the War on Drugs,” Sullivan said.
“This program will not only ensure equitable access to capital, but also spur economic growth and job creation in communities across the state. The NJEDA is committed to supporting entrepreneurs in this growing industry, which will help bring us closer towards Gov. (Phil) Murphy’s goal of creating a stronger, fairer New Jersey.”
Tai Cooper, the EDA’s chief community development officer, agreed:
“While the cannabis industry is continuing to thrive and expand, we must ensure that those most negatively impacted by the War on Drugs are not locked out of the industry. A primary focus of the Cannabis Equity Grant Program is to help address this inequity by supporting entrepreneurs and small businesses,” she said.
“Cannabis entrepreneurship opportunities can play a crucial role in returning wealth to individuals and communities that have unfairly suffered as a result of the criminalization of cannabis. Ensuring access to these opportunities will help create jobs and bolster New Jersey’s entire economy.”