As part of a new grant program that aims to help aspiring entrepreneurs establish themselves in the legalized cannabis marketplace, the New Jersey Economic Development Authority awarded $12 million to dozens of cannabusiness owners statewide.
Announcing the first round of grant funding in an Oct. 3 press release, the NJEDA noted that it was able to double the number of awards from 24 to 48 thanks to a further allocation by Gov. Phil Murphy.
Launched earlier this year, the Cannabis Equity Grant Program aims to assist entrepreneurs, particularly those from communities historically harmed by the war on drugs, so they can start and expand their businesses in New Jersey. Designed to eliminate long-standing barriers to entry, the initiative provides startups with a $250,000 grant – the largest cannabis social equity grant of its kind in the nation – for use on early-stage expenses, such as regulatory fees, rent, utilities and wages, as well as technical training.
According to the NJEDA, the main goal of the program’s first stage – the Joint Ventures Grant – is to help recreational cannabis business owners with the capital needed to “manage financial burdens and challenges when transitioning from a conditional license to an annual license.”
To ensure the communities harmed by racially biased marijuana arrests also reap these financial benefits, the agency said 40% of the initial round of grants is being disbursed to qualifying social equity applicants, such as those who have previous cannabis convictions or live in economically disadvantaged areas.
Each grant will be distributed in two rounds, with the first allocation of $100,000 occurring upon execution of the agreement. The balance will be awarded once the grantee secures its annual license from the New Jersey Cannabis Regulatory Commission (CRC), as well as demonstrates that it used the first part of the funding for eligible costs, the state said.
Applicants who did not qualify for the Joint Ventures Grant may be eligible for the second phase of the program, expected to launch later this year, the $150,000 Seed Equity Grant.
That award is solely for applicants who meet the CRC’s criteria for social equity and have received a conditional license, but not yet secured real estate or municipal approval and need help converting their conditional license to an annual one.
Phase II awardees will also receive technical assistance, such as licensure process training, help in building a cannabis business team, financial management, guidance on securing investors and development of supply chain management. For more information about the program and eligibility requirements, click here.
NJEDA Chief Community Development Officer Tai Cooper congratulated the 48 grantees, saying the investment will create “new opportunities within the thriving cannabis marketplace.”
“As we recognize these successes, we must also acknowledge that our work is not finished. Despite the presence of well-meaning policies across the country, it remains evident that communities of color hit the hardest by the criminalization of cannabis, continue to reap fewer benefits,” stated Cooper. “With this additional investment from Gov. Murphy, the Cannabis Equity Grant Program is receiving the pivotal funding needed to ensure greater equity and access in the industry.”
NJEDA Chief Executive Officer Tim Sullivan echoed the sentiment, saying, “Greater investment in the cannabis industry ensures more entrepreneurs, residents, and communities benefit, reversing historical injustices.”
“This additional funding will significantly expand our impact and foster greater participation in the growing cannabis industry, especially for communities harmed by the unjust War on Drugs. Under the leadership of Gov. Phil Murphy, legalization has bolstered our state’s tax revenue and begun to create a stronger and fairer cannabis marketplace,” Sullivan went on to say.
As part of an ongoing effort to help provide a pathway into what’s expected to be a $2 billion a year industry by 2026, Murphy signed legislation in June 2022 allowing the NJEDA to offer financial assistance to qualifying, licensed small cannabis businesses.
In crafting a pilot program that brings economic opportunity those impacted by the war on drugs, Sullivan said his agency has had many “impactful discussions with cannabis startups, community leaders and advocates” since the recreational market opened last spring.
From there, the NJEDA worked to develop a program that will not only ensure equitable access to capital, but also spur economic growth and job creation in communities across the state.
In a statement, Murphy said, “As the cannabis industry continues to reach new heights in New Jersey, it is important that we build on our efforts to support the businesses seeking to enter and grow within this emerging market.”
The Cannabis Equity Grant Program “allows us to simultaneously expand the pool of cannabis businesses in our state while also focusing on those communities most impacted by the unethical War on Drugs,” said Murphy, who added: “As we work to create a stronger, fairer, and more equitable cannabis market, our Administration will continue to increase access and opportunity to the small businesses entering the industry.”
CRC Chair Dianna Houenou believes the Cannabis Equity Grant Program will help “set the New Jersey cannabis market as an example for the rest of the country.”
“We were grateful NJEDA stepped up to partner with us and we were able to offer our insight into the cannabis industry and to present our vision for an equitable New Jersey market – with particular concern for those who lack access to personal or familial capital, or to traditional sources of business funding,” she said. “We look forward to more grant funding for cannabis entrepreneurs that represent our local and diverse community. We look forward to even more targeted investment into social equity businesses and those owned by local minority-, women-, and disabled veteran-owned businesses. And we look forward to supporting the NJEDA as they make that happen.”
Joint Ventures Grant recipients include:
According to the NJEDA, three recipients (two in Ocean County and one in Hudson County) wish to remain anonymous until they get closer to their grand-opening dates.
Other grant winners include: Hera Solutions LLC; E.V. LLC; Highgrade Laboratories of New Jersey LLC; Ascension Cannabis Brands Co. and City Leaf Corp.