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The basics:

• CRC approves 4 dispensaries to launch on-site cannabis lounges
• Endorsements went to diversely owned businesses in AC, Newark, Merchantville
• Rules prohibit alcohol sales; require local municipal approval
• Lounges offer legal spaces for cannabis use by adults 21+

New Jersey has given the green light for the state’s first on-site cannabis consumption lounges to launch.

The Cannabis Regulatory Commission approved four retailers during its July 15 meeting to open special areas where recreational and medicinal cannabis patients age 21 and up can legally use cannabis.

According to the CRC, the consumption area endorsements went to:

• High Rollers Dispensary Atlantic City
• SunnyTien Dispensary Atlantic City
• Gynsyng Merchantville
• URB’N Dispensary Newark

The approvals come nearly a year-and-a-half after the CRC advanced a framework allowing consumption lounges at medical dispensaries and recreational-use retailers. While the agency set to work establishing an application process and regulations, some business owners expressed frustration over the pace at which the state rolled out endorsements.

The board began accepting applications earlier this year starting with social equity businesses. The CRC defines that category as ventures owned by individuals who have lived in one of the state’s 55 economically disadvantaged areas.

A second round of applications opened in April for diversely owned businesses and microbusinesses. As of July 2, all Class 5 retailers can apply for a cannabis consumption area endorsement.

All of the consumption area endorsements awarded this week went to diversely owned businesses that are minority-owned, woman-owned or disabled veteran-owned, the CRC said.

‘History in the Jersey market’

In a social media post, Spencer Belz, chief operating officer of SunnyTien Dispensary, shared the news.

“Thank you to all of those who have been supportive, cheered us on, visited the space, etc … Opening this lounge will be history in the Jersey market. Won’t be perfect. Won’t be easy. But it’s going to be a hell of a lot of fun!,” Belz said.

He noted that it took about 90 days for the 15-month-old dispensary to receive approval.

“And no, I don’t know when we’re opening. Trust me, everyone will know,” Belz said.

In a statement, CRC Chairwoman Dianna Houenou described the first batch of cannabis consumption area endorsements as “a major milestone in New Jersey’s cannabis industry.”

“These designated spaces provide consumers with safe and legal options for cannabis consumption,” she said. “Whether individuals cannot consume cannabis inside their homes or simply wish to consume cannabis legally and responsibly, these areas provide a practical solution. We are proud to support this next phase of safe-use infrastructure in our state.”

Initially proposed in December 2022, the rules include:

• Dispensaries may not sell food, but patrons may bring their own food or have food delivered there
• Businesses must allow medicinal cannabis patients to bring cannabis items from other retailers for their own use
• The sale of tobacco products and alcohol is prohibited
• Patrons must be 21 years or older
• Photo identification is required for entry

Home rule

Since it’s up to municipalities in New Jersey to determine limits on the number of cannabis businesses within their borders, the state does not have a cap on the total number of consumption areas statewide. Currently, New Jersey is home to more than 200 legal cannabis dispensaries.

These designated spaces provide consumers with safe and legal options for cannabis consumption.
– Dianna Houenou, Cannabis Regulatory Commission chairwoman

Under the regulations developed by the CRC, dispensaries that wish to set up spaces for customers to use cannabis must secure local approval. However, all dispensaries must adhere to any restrictions imposed by the municipality.

According to the CRC, those include, but are not limited to:

• Restricting the number of consumption areas allowed in a town
• Business signage
• Communication with municipal emergency services

Applicants must also meet specific facility, safety and ventilation requirements, as well as pass a final site inspection before consumption lounges can open for business.

Businesses have flexibility in their operational decisions, such as hours of operation, fees to enter a consumption area, priority access to medicinal patients and authorizing paid events.

According to the CRC, the $1,000 consumption lounge application fee consists of $200 to submit and $800 once approved. There’s also an annual licensing fee of $1,000 for microbusinesses and $5,000 for standard businesses, the CRC said.

Across the U.S., only 12 other states have regulations providing for an on-site use option at dispensaries: Alaska, California, Colorado, Nevada, Illinois, Massachusetts, Michigan, Minnesota, Missouri, New Mexico, New York and Nevada.