What types of cannabis businesses licenses are authorized under the new law?

Cannabis Business Licenses

The medical marijuana laws were designed to result in vertical businesses. They are/were referred to as alternate alternative treatment centers. There was cultivating, manufacturing ad retailing.

Class 1 are the is Cultivators. They can grow indoors or outdoors. Most, if not all, must grow indoors given NJ’s climate. The $64,000 question? Does the facility have sufficient power and water?

Class 2 are the Manufacturers. The manufacturer takes the whole flower and makes something else. An edible is just one example.

Class 5 are the Retailers. They purchase from a cultivator, manufacturer or a wholesaler.

The above licenses existed under the medical cannabis laws, they simply were not referred to as Class 1, 2, or 5.

The new classes of licenses are:

Class 3 are the Wholesalers. They obtain, store, sell and transfer from one licensed entity to retailers only retailers BUT they can sell to other wholesalers.

Class 4 are the Distributors. They distribute cannabis from licensee to licensee but not to the retailer (public). They move cannabis and cannabis related products between other licenses.

The differences between Wholesaler and Distributor are not yet completely known.

Class 6 are the Delivery Licenses. They provide courier services for consumer purchases of cannabis items The consumer interacts with the delivery service to place an order. The Delivery Service goes to the retailer, presents proof of purchases by the consumer, picks up the cannabis product and delivers it to the consumer.

The somewhat unusual licenses are Clinical Registered, Licensed Testing Facilities and Personal Use Cannabis Handler licenses. Clinical are the colleges and other institutions that perform studies and research on cannabis. Testing facilities are required to ensure quality control. Cannabis handler licenses are required for anyone working with cannabis.


What is a microbusiness license?

Microbusiness Licenses

This is a much smaller, scaled down version of anyone of the six license types. There are restrictions regarding capacity, quantity, operation, etc. Such as:

  • Has no more than 10 employees.
  • Operate in space of no more than 2,500 square feet area.
    – Except a grower can operate in space of no more than 2,500 square feet measured on a horizontal plane and grow no higher than 24 feet above that plan.
  • Process no more than 1,000 cannabis plants each month.
    – Except a distributor’s possession for transportation.
  • Cannabis cultivator cannot acquire and process more than 1,000 pounds of cannabis in dried form each month.
  • Cannabis wholesaler cannot acquire for resale more than 1,000 pounds each month.
  • Cannabis retailer cannot acquire for sale more than 1,000 pounds each month.


What is a conditional license?

Conditional Licenses

The applicant meets a limited set of requirements and obtains a conditional (temporary) license. The goal is to allow non-experienced, lower income and less capitalized applicants to gain entry into the cannabis market. By way of example, applicants do not need to secure a site/building upon application avoiding having to carry the expense of monthly rental payments while the application is being processed. The applicant for a conditional license has 120 days to meet the requirements that they could not meet at the time of applicaiton.


What is the difference between a Class 4 Distributor and a Class 6 Delivery license?

Class 4 vs Class 6 Licenses

The Class 4 Distributor is transporting cannabis and cannabis related items in bulk using large trucks from one Class licensee to another Class licensee. They are NOT delivering directly to consumers. The Class 4 Distributor can store cannabis and cannabis related products until they transport it. The Class 6 Delivery licensee is using a small vehicle and delivering to consumers. Municipalities cannot prohibit or regulate the delivery of cannabis to their residents.