N.J. Stat. § 24:6I-46

Current through L. 2024, c. 80.

Section 24:6I-46 - Marketplace regulation

a.

(1)

(a) For a period of 24 months after the effective date of P.L.2021, c.16 (C.24:6I-31 et al.), it shall be unlawful for any owner, part owner, stockholder, officer, or director of any corporation, or any other person interested in any cannabis cultivator, cannabis manufacturer, cannabis wholesaler, cannabis distributor, cannabis delivery service, or cannabis testing facility to engage in the retailing of any cannabis items in this State, or to own, either in whole or in part, or be directly or indirectly interested in a cannabis retailer, and such interest shall include any payments or delivery of money or property by way of loan or otherwise accompanied by an agreement to sell the product of said cannabis cultivator, cannabis manufacturer, cannabis wholesaler, cannabis distributor, or cannabis testing facility, but does not include any arrangement between a cannabis delivery service and a cannabis retailer for making deliveries of cannabis items to consumers. During this 24-month period, the holder of a Class 1 Cannabis Cultivator license to operate as a cannabis cultivator or a Class 2 Cannabis Manufacturer license to operate as a cannabis manufacturer may hold one other license to operate another cannabis establishment, other than a Class 3 Cannabis Wholesaler license to operate as a cannabis wholesaler or a Class 5 Cannabis Retailer license to operate as a cannabis retailer; and the holder of a Class 3 Cannabis Wholesaler license to operate as a cannabis wholesaler may hold one other Class 4 Cannabis Distributor license to operate as a cannabis distributor.

(b) Throughout the 24-month period set forth in subparagraph (a) of this paragraph, the commission, except as authorized by paragraph (2) of subsection b. of this section, shall not allow, providing there exist qualified applicants, more than 37 cannabis cultivators to be simultaneously licensed and engaging in cannabis production, which number shall include any alternative treatment centers deemed to be licensed as cannabis cultivators who are issued licenses by the commission pursuant to paragraph (3) of this subsection; provided that cannabis cultivator licenses issued to microbusinesses pursuant to subsection f. of section 19 of P.L.2021, c.16 (C.24:6I-36) shall not count towards this limit.

(2) For a period of 24 months after the effective date of P.L.2021, c.16 (C.24:6I-31 et al.), it shall be unlawful for any owner, part owner, stockholder, officer, or director of any corporation, or any other person engaged in any retailing of any cannabis items to engage in the growing of, testing of, manufacturing of, wholesaling of, or transporting in bulk any cannabis items, or to own either whole or in part, or to be a shareholder, officer or director of a corporation or association, directly or indirectly, interested in any cannabis cultivator, cannabis manufacturer, cannabis wholesaler, cannabis distributor, cannabis delivery service, or cannabis testing facility.

(3)

(a)

(i) Except with respect to the cap on the number of cannabis cultivator licenses set forth in subparagraph (b) of paragraph (1) of this subsection, the provisions of paragraphs (1) and (2) of this subsection shall not apply to any alternative treatment center that was issued a permit prior to the effective date of P.L.2019, c.153 (C.24:6I-5.1 et al.), or to any alternative treatment center that was issued a permit subsequent to that effective date pursuant to an application submitted prior to that effective date,

to the one alternative treatment center, out of four, issued a permit pursuant to an application submitted after the effective date of P.L.2019, c.153 (C.24:6I-5.1 et al.) pursuant to a request for applications published in the New Jersey Register prior to that effective date, that is expressly exempt, pursuant to subsection a. of section 11 of P.L.2019, c.153 (C.24:6I-7.1), from the provisions of subsubparagraph (i) of subparagraph (a) of paragraph (2) of subsection a. of section 7 of P.L.2009, c.307 (C.24:6I-7), which exemption permits the alternative treatment center to concurrently hold more than one medical cannabis permit, and that one alternative treatment center is deemed pursuant to that section 7 (C.24:6I-7) to concurrently hold more than one permit, and

to the one alternative treatment center, out of three, issued a permit pursuant to an application submitted on or after the effective date of P.L.2019, c.153 (C.24:6I-5.1 et al.), that is expressly exempt, pursuant to subsection a. of section 11 of P.L.2019, c.153 (C.24:6I-7.1), from the provisions of subsubparagraph (i) of subparagraph (a) of paragraph (2) of subsection a. of section 7 of P.L.2009, c.307 (C.24:6I-7), which exemption permits the alternative treatment center to concurrently hold more than one medical cannabis permit, and that one alternative treatment center is deemed pursuant to that section 7 (C.24:6I-7) to concurrently hold more than one permit,

and which alternative treatment center is also deemed, pursuant to subsubparagraph (ii) of subparagraph (c) of paragraph (2) of section 7 of P.L.2009, c.307 (C.24:6I-7), to either concurrently hold a Class 1 Cannabis Cultivator license, a Class 2 Cannabis Manufacturer license, a Class 5 Cannabis Retailer license, plus an additional Class 5 Cannabis Retailer license for each satellite dispensary authorized and established by an alternative treatment center pursuant to subparagraph (d) of paragraph (2) of subsection a. of section 7 of P.L.2009, c.307 (C.24:6I-7), and a Class 6 Cannabis Delivery license, or alternatively to hold a Class 3 Cannabis Wholesaler license, and may also be deemed to hold a Class 4 Cannabis Distributor license.

(ii) For each alternative treatment center deemed to have licenses pursuant to subsubparagraph (i) of this subparagraph, the commission shall not require the submission of an application for licensure, as the application requirement is deemed satisfied by the alternative treatment center's previously approved permit application that was submitted to the Department of Health or to the commission pursuant to section 7 of P.L.2009, c.307 (C.24:6I-7), but the alternative treatment center shall not begin to operate as any class of cannabis establishment distributor, or delivery service until the alternative treatment center has submitted a written approval for a proposed cannabis establishment distributor, or delivery service from the municipality in which the proposed establishment distributor, or delivery service is to be located, which approval is based on a determination that the proposed establishment distributor, or delivery service complies with the municipality's restrictions on the number of establishments distributor, or delivery services, as well as the location, manner, and times of operation of establishments or distributors enacted pursuant to section 31 of P.L.2021, c.16 (C.24:6I-45). The commission shall thereafter only issue the initial license to the alternative treatment center for a cannabis establishment of the appropriate class, or for a cannabis distributor or delivery service, once the commission certifies that it has sufficient quantities of medical cannabis and medical cannabis products available to meet the reasonably anticipated needs of registered qualifying patients in accordance with subsubparagraph (iii) of this subparagraph. The commission shall begin accepting municipal approvals from alternative treatment centers beginning on the date of adoption of the commission's initial rules and regulations pursuant to subparagraph (a) of paragraph (1) of subsection d. of section 6 of P.L.2021, c.16 (C.24:6I-34).

(iii) An alternative treatment center with approval from a municipality pursuant to subsubparagraph (ii) of this subparagraph shall not engage in activities related to the growing, manufacturing, wholesaling, transporting or delivering of cannabis or cannabis items until it has certified to the commission that that it has sufficient quantities of medical cannabis and medical cannabis products available to meet the reasonably anticipated needs of registered qualifying patients, and the commission has accepted the alternative treatment center's certification, which acceptance is conditioned on the commission's review of the alternative treatment center as set forth in subsubparagraph (iv) of this subparagraph. Upon acceptance of the certification, the commission shall issue the initial license to the alternative treatment center for a cannabis establishment of the appropriate class or for a cannabis distributor or delivery service.

Notwithstanding the date determined by the commission pursuant to paragraph (2) of subsection d. of section 6 of P.L.2021, c.16 (C.24:6I-34) to be the first date on which cannabis retailers issued licenses and conditional licenses begin retail sales of personal use cannabis items, an alternate treatment center, if approved by the commission to operate as a cannabis retailer, may begin to engage in the retail sale of cannabis items on any date after the date that the commission adopts its initial rules and regulations pursuant to subparagraph (a) of paragraph (1) of subsection d. of section 6 of that act P.L.2021, c.16 (C.24:6I-34), so long as it has certified to the commission that it has sufficient quantities of medical cannabis and, if applicable, medical cannabis products available to meet the reasonably anticipated needs of registered qualifying patients, and the commission has accepted the alternative treatment center's certification, which acceptance is conditioned on the commission's review of the alternative treatment center as set forth in subsubparagraph (iv) of this subparagraph. Upon acceptance of the certification, the commission shall issue the initial cannabis retailer license to the alternative treatment center for engaging in the retail sale of cannabis items.

(iv) An alternative treatment center issued a license for a cannabis establishment or delivery service shall be authorized to use the same premises for all activities authorized under P.L.2021, c.16 (C.24:6I-31 et al.) and the "Jake Honig Compassionate Use Medical Cannabis Act," P.L.2009, c.307 (C.24:6I-1 et al.), without being required to establish or maintain any physical barriers or separations between operations related to the medical use of cannabis and operations related to personal use of cannabis items, provided that the alternative treatment center shall be required to certify that it has sufficient quantities of medical cannabis and, if applicable, medical cannabis products available to meet the reasonably anticipated needs of registered qualifying patients, as set forth in subsubparagraph (ii) or (iii) of this subparagraph, and only if accepted by the commission, which is a condition for licensure as a cannabis establishment of the appropriate class or as a cannabis delivery service.

In determining whether to accept, pursuant to this subparagraph, an alternative treatment center's certification that it has sufficient quantities of medical cannabis or medical cannabis products available to meet the reasonably anticipated needs of registered qualifying patients, the commission shall assess patient enrollment, inventory, sales of medical cannabis and medical cannabis products, and any other factors determined by the commission through regulation.

As a condition of licensure following acceptance of a certification, an alternative treatment center shall meet the anticipated treatment needs of registered qualifying patients before meeting the retail requests of cannabis consumers, and the alternative treatment center shall not make operational changes that reduce access to medical cannabis for registered qualifying patients in order to operate a cannabis establishment or delivery service. If an alternative treatment center is found by the commission to not have sufficient quantities of medical cannabis or medical cannabis products available to meet the reasonably anticipated needs of qualified patients, the commission may issue fines, limit retail or other sales, temporarily suspend the alternative treatment center's cannabis establishment, distributor, or delivery service license, or issue any other penalties determined by the commission through regulation.

(b) Beginning on a date determined by the commission, to be not later than one year from the date determined by the commission pursuant to paragraph (2) of subsection d. of section 6 of P.L.2021, c.16 (C.24:6I-34) to be the first date on which cannabis retailers issued licenses and conditional licenses begin retail sales of personal use cannabis items, an alternative treatment center deemed to have licenses and issued initial licenses pursuant to subparagraph (a) of this paragraph shall certify to the commission, within a period of time, as determined by the commission, prior to the date on which a license issued to the alternative treatment center is set to expire, the continued material accuracy of the alternative treatment center's previously approved permit application to the Department of Health or to the commission pursuant to section 7 of P.L.2009, c.307 (C.24:6I-7), and its compliance with the provisions of P.L.2021, c.16 (C.24:6I-31 et al.) as required by the commission for its operations concerning cannabis or cannabis items, and this certification shall be supplemented with a new written approval from the municipality in which the alternative treatment center is operating as a cannabis establishment or delivery service for which the initial license was issued, approving the continued operations as a cannabis establishment distributor, or delivery service. The commission shall renew the license of the alternative treatment center based upon a review of the certification and supporting municipality's continued approval. This license renewal process shall thereafter be followed for each expiring license issued to the alternative treatment center.

b. Following the 24-month period set forth in subparagraph (a) of paragraph (1) of subsection a. of this section, a cannabis license holder shall be authorized to hold:

(1)

(a) a Class 1 Cannabis Cultivator license, a Class 2 Cannabis Manufacturer license, a Class 5 Cannabis Retailer license, and a Class 6 Cannabis Delivery license concurrently, provided that no license holder shall be authorized to concurrently hold more than one license of each class, except for an alternative treatment center that was deemed, during the 24-month period, to have an additional Class 5 Cannabis Retailer license for each satellite dispensary that was authorized and established by the alternative treatment center pursuant to subparagraph (d) of paragraph (2) of subsection a. of section 7 of P.L.2009, c.307 (C.24:6I-7). These additional retailer licenses only permit the retail operation of each satellite dispensary, and shall not be replaced by any other class of cannabis establishment distributor, or delivery service license; or

(b) a Class 3 Cannabis Wholesaler license and a Class 4 Cannabis Distributor license. In no case may a holder of a Class 3 Cannabis Wholesaler license concurrently hold a license of any other class of cannabis establishment, or concurrently hold a license as a cannabis delivery service.

(2) The commission, pursuant to its authority under paragraph (1) of subsection a. of section 18 of P.L.2021, c.16 (C.24:6I-35) for making periodic evaluations of whether the number of each class of cannabis establishment, or number of cannabis distributors or delivery services, is sufficient to meet the market demands of the State, shall review the limit on the number of cannabis cultivator licenses set forth in subparagraph (b) of paragraph (1) of subsection a. of this section, and providing there exist qualified applicants, accept new applications for additional licenses as it deems necessary.

(3) A license holder may submit an application for a license of any type that the license holder does not currently hold prior to the expiration of the 24-month period set forth in subparagraph (a) of paragraph (1) of subsection a. of this section, or thereafter, does not currently hold pursuant to paragraph (1) of this subsection, provided that no license shall be awarded to the license holder during the 24-month period, or thereafter, if issuance of the license would violate the restrictions set forth in subsection a. of this section concerning the classes of licenses that may be concurrently held during that 24-month period, or the restrictions set forth in paragraph (1) of this subsection.

c. Notwithstanding the provisions of this section, an investor, investor group, or fund that provides significant financial or technical assistance or the significant use of intellectual property, or a combination thereof, to an applicant for a Class 5 cannabis retailer license, which applicant has been certified as a minority business pursuant to P.L.1986, c.195 (C.52:27H-21.18 et seq.), a women's business pursuant to P.L.1986, c.195 (C.52:27H-21.18 et seq.), or is a disabled-veterans' business, as defined in section 2 of P.L.2015, c.116 (C.52:32-31.2), may own up to a 35 percent interest in up to seven entities that have been issued a Class 5 cannabis retailer license, provided that each such retailer is a certified minority or women's business or a disabled-veterans' business, and the terms of the agreement to provide significant financial or technical assistance or the significant use of intellectual property, or a combination thereof, whether provided in the form of equity, a loan, or otherwise, including interest rates, returns, and fees, are commercially reasonable based on the terms generally provided to comparable businesses. The terms of the agreement for the provision of significant financial or technical assistance or the significant use of intellectual property, or a combination thereof, may include performance, quality, and other requirements as a condition of providing the financial or technical assistance or use of intellectual property. An applicant for a Class 5 cannabis retailer license that has or will receive significant financial or technical assistance or the significant use of intellectual property under this subsection shall include with the license application materials submitted to the commission a copy of the agreement to provide significant financial or technical assistance or significant use of intellectual property, or a combination thereof, which agreement shall be subject to review by the commission as provided in subsection f. of section 11 of P.L.2019, c.153 (C.24:6I-7.1).

An applicant for a Class 5 cannabis retailer license that receives significant financial or technical assistance or the significant use of intellectual property under this subsection shall pay back to the investor, investor group, or fund the full value of the financial or technical assistance or intellectual property provided under the agreement, plus any applicable interest and fees, in a period not less than five years after the date of the agreement if the full value of the assistance or property is less than $100,000, in a period not less than seven years after the date of the agreement if the full value of the assistance or property is between $100,001 and $250,000, in a period not less than 10 years after the date of agreement if the full value of the assistance or property is between $250,001 and $500,000, and, subject to any terms and conditions imposed by a lender, in a period not less than 10 years after the date of the agreement if the full value of the assistance or property is greater than $500,000. An investor, investor group, or fund that has acquired an ownership interest in one or more entities that have been issued a Class 5 cannabis retailer license as authorized under this subsection may maintain the ownership interest after the date the full value of the financial or technical assistance or use of intellectual property provided under the agreement, plus interest and fees, has been repaid by the applicant that received the assistance or use of intellectual property.

In no case may the controlling interest in the entity that holds a Class 5 cannabis retailer license in which an investor, investor group, or fund owns an interest as authorized pursuant to this subsection revert to the investor, investor group, or fund in the event of a default or failure by the certified minority or women's business or disabled-veterans' business, as applicable, and any such controlling interest may only be transferred to a certified minority or women's business or a disabled-veterans' business.

An entity issued a Class 1 cannabis cultivator license, Class 2 cannabis manufacturer license, or Class 5 cannabis retailer license, or an alternative treatment center, or an individual associated with the ownership or management of such entity, may invest or participate in an investor group or a fund that meets the requirements of this subsection with respect to a Class 5 cannabis retailer license or an alternative treatment center permit.

N.J.S. § 24:6I-46

Amended by L. 2023, c. 162, s. 2, eff. 9/25/2023.

Added by L. 2021, c. 16, s. 33, eff. 2/22/2021.