N.J. Admin. Code § 17:30A-7.12

Current through Register Vol. 56, No. 23, December 2, 2024

Section 17:30A-7.12 - Probity review

(a) After the receipt of an application from a permit applicant, as part of the verification and probity review, the Commission, at its discretion, may require additional information and the submission, by the permit applicant, of supporting documents and other evidence before making a final decision on the application or issuing a permit.

(b) At the discretion of the Commission, an owner, passive investor, management services contractor, or financial source may be required to submit documentation verifying the source of the funds provided to the permit applicant, including, but not limited to, a promissory note, credit facility, debt instrument, guarantor agreement, or loan agreement, as well as closing documents.

(c) The following persons or entities shall be required to submit to a financial probity review:

1. Owners;

2. Principals;

3. Members of a governing body that governs an owner or a principal of a permit applicant or holder that is an entity;

4. Management services contractors contracting with a permit applicant;

5. Any person or entity that holds at least 10 percent aggregate ownership interest in or who is a member of the executive team of a management services contractor contracting with a permit applicant or permit holder;

6. Financial sources that are not a qualified institutional investor;

7. Any person or entity that holds at least a 10 percent aggregate ownership interest in or who is a member of the executive team of a financial source entity that is not a qualified institutional investor; and

8. Vendor-contractors.

(d) Financial probity review for a person for the purposes of verification of a permit application and qualification for a permit may include submission of:

1. A state driver's license, or other photo identification issued by the State of New Jersey, another state, or the Federal government;

2. A passport;

3. Any college diploma, transcript, or letter from a registrar providing confirmation of a person's status at an academic or educational institution;

4. Ownership documents for any vehicles, aircraft, or boats owned by the person or the person's business;

5. Any professional licenses held, and any documents related to sanctions imposed, or known investigations in connection with those licenses;

6. Any criminal record history and any information regarding rehabilitation pursuant to N.J.A.C. 17:30A-7.2(f) and 7A.6(e);

7. Documentation for any business, aside from the permit applicant, in which the person currently holds at least a 25 percent ownership interest, including, but not limited to, partnership papers, operating agreements, and stock registry-stock certificates;

8. Summary of any pending litigation or past litigation that concluded during the previous five years, other than divorce or child custody matters, in which the person was involved, including docket number, venue, cause of action, named litigants, a copy of the complaint, and disposition or current status;

9. Any employment contract or offer letter between the permit applicant and the person;

10. Most recently filed individual State, Federal, and foreign tax returns including Schedule K1, and, if applicable, the most recently filed letter requesting an extension;

11. Most recently filed business State, Federal, and foreign tax returns for any business, aside from the permit applicant, in which the person holds more than a 50 percent ownership interest;

12. Any W-2 and 1099 forms for the prior three tax years;

13. Account statements for any personal bank account, including a money market account, for which the person has signatory authority;

14. An original deed and purchase settlement statement, for any real estate property in which the person has an ownership interest;

15. The declaration page of any cash value life insurance policy held by the person and the names of all beneficiaries, including the name, trustee, and beneficiaries of any trust;

16. Account statements for any pension or retirement account held by the person, including any 401k;

17. Account statements for any account held by the person that holds securities, including a brokerage or investment account;

18. Any notes or loans receivable in the person's name;

19. Any notes or loans payable in the person's name;

20. Any documents relative to any contingent liabilities in which the person serves as a guarantor;

21. Any liens, judgments, or taxes payable levied against the person; and

22. Additional identifying information about the person's immediate family, including, but not limited to, marriage, death, and birth certificates.

(e) Financial probity review for an entity for the purposes of verification of permit application submissions and qualification may include submission of:

1. Entity organizational chart;

2. Entity business formation documents;

3. List and summary of all fines or sanctions imposed by any agency regulating cannabis on the entity in any jurisdiction and the circumstances surrounding such fines or sanctions;

4. Summary of any pending litigation or past litigation that concluded during the previous five years in which the entity or its subsidiaries was involved, including docket number, court name, cause of action, named litigants, a copy of the complaint, and disposition or current status;

5. Documentation for any company, aside from the permit applicant, in which the entity currently holds at least 25 percent ownership interest, including, but not limited to, partnership papers, operating agreements, and stock registry-stock certificates;

6. Most recently filed individual state, Federal, and foreign tax returns, including Schedule K1, and, if applicable, most recently filed letter requesting an extension;

7. Most recently filed business state, Federal, and foreign tax returns for any business, aside from the permit applicant, in which the entity holds more than a 50 percent ownership interest;

8. Minutes of the meetings of and resolutions passed by the entity's governing board for the previous two calendar years;

9. Any filed annual financial reports of the entity that are required to be filed with a national securities exchange or over-the-counter market;

10. Unaudited balance sheet and income statement or audited financial statement of the entity for the 24 months previous to the application;

11. Monthly bank statements for the previous year for all entity bank accounts related to the permit applicant;

12. Any notes or loans receivable in the entity's name;

13. Any notes or loans payable in the entity's name;

14. Any liens, judgments, or taxes payable levied against the entity;

15. Where the entity is a publicly traded corporation or a private capital fund, a complete list of persons and entities with any ownership interest in the entity; and

16. Any other information the Commission deems relevant in determining whether to grant a permit to the applicant.

(f) Probity review materials submitted to the Commission pursuant to this section shall not be considered public records pursuant to N.J.S.A. 47:1A-1 et seq., or the common law concerning access to government records.

N.J. Admin. Code § 17:30A-7.12

Adopted by 56 N.J.R. 1728(b), effective 8/19/2024