CRC formally proposes permanent rules, approves 81 new conditional licenses

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The Cannabis Regulatory Commission voted June 30 to approve and formally propose the permanent rules set to guide the cultivation, manufacture, wholesale, distribution, sale and delivery of adult-use cannabis in New Jersey.

The rule proposal, which will appear in New Jersey Register on Aug. 1, expands upon the initial rules the CRC released in August 2021 by adding three license types: Class 3 Cannabis Wholesalers, Class 4 Cannabis Distributors and Class 6 Cannabis Delivery Services. The expansion also aims to improve key parts of the CRC’s approach to both equity and safety.

“Today, the Cannabis Regulatory Commission took the historic step of proposing permanent rules for New Jersey’s cannabis industry and expanding our focus on both equity and safety,” said CRC Chair Dianna Houenou. “The regulations approved for formal proposal will create new opportunities for entrepreneurs to join this nascent industry.”

In addition to the establishment of Class 3, Class 4 and Class 6 licenses, the proposed rules allow for more flexibility for microbusinesses by clarifying that areas like breakrooms and bathrooms, where cannabis is not handled, don’t count toward the 2,500-square-foot limit established by the New Jersey Cannabis Regulatory, Enforcement Assistance, and Marketplace Modernization Act, which enabled the market.

The proposed rules codify sales limits for recreational consumers at 1 ounce of cannabis flower, 4 grams of extracts or concentrates, or 1,000 mg of THC in edible form; improve the label requirements for cannabinoids so consumers are better informed as to how much THC and CBD are included in cannabis products; require retailers to provide information to consumers on safe cannabis use when they purchase recreational cannabis products; provide flexibility on logo size and placement on packaging to help new businesses better establish brands in the market; and provide clarity on the penalties that can be imposed by the CRC for regulation violations.

The permanent rules also codify the CRC’s licensing process, which prioritize social equity business applications and applications from certified minority-, women-, and disabled veteran-owned businesses, and include some of the lowest application fees for cannabis businesses nationwide.

“The proposed permanent rules will empower the CRC to continue our mission to make New Jersey the premier cannabis market on the East Coast,” said CRC Executive Director Jeff Brown. “They improve safety for consumers, they continue to promote equity, and they include new license types and new flexibilities that will create new opportunities for businesses in New Jersey.”

Following the Aug. 1 publication in the state register, there is a 60-day public comment period – to close Sept. 30 – where interested members of the public can submit written comments on the proposed rules electronically at nj.gov/cannabis.

The CRC will then have until Feb. 15, 2023, to respond to public comments, incorporate changes, and adopt the final rules.

“The rules will help create a market that is competitive, diverse, and that puts our core values of equity and safety first,” noted Sam Delgado, the CRC’s vice chair. “They will ensure that entrepreneurs have access to the market, especially those who have been negatively impacted by cannabis prohibition; and ensure that consumers and stakeholders can have confidence in safe, well- regulated legal cannabis sales.”

Also at the June 30 meeting, the CRC approved the Social Equity Excise Fee recommendation report, recommending that Excise Fee revenue be reinvested in grants and loans for social equity cannabis businesses; as well as approved 81 new conditional licenses for cultivation, manufacturing, and retail.

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