New Jersey’s dispensary profitability is at an all-time high, so it’s not surprising to see aspiring cannabis store owners scrambling to get a retail NJ cannabis license. According to New Jersey’s Cannabis Regulatory Commission, the state’s cannabis market earned $800,279,300 in 2023. Today, there are at least 79 established dispensaries across the state, and more are to come.
If you’re lucky to have intuitively predicted the rise in dispensary profitability and would like to know what it looks like to apply for a cannabis business license in New Jersey, this guide is for you.
Medical Cannabis
Yes
Recreational Cannabis
Yes
Hemp-derived
Yes
Qualifying Age
21
Step 1: Draft Your Business’s Details
Before registering for a license with the New Jersey Cannabis Regulatory Commission (CRC), you have to go through the least sexy process of starting a cannabis business—drafting a business plan.
The CRC requires you to submit a detailed business plan to proceed with the license application process. This in-depth plan should outline the following:
- The physical location of the business
- Source of your capital fund
- Suppliers of your inventory or cannabis products
- Revenue projections before and after opening a cannabis store
- Ownership and staff organization
- Diversity and equity plans
- Environmental and Community Impact Plan
- Marketing Plan
- Security plan
- Point-of-sale and compliance software
As for the indispensable details of your business plan, include the following information:
- Executive summary
- Company missions and vision
- Market research
- Competitor analysis
- Product and service description
Step 2: Forming Your Business Entity
If you haven’t formed a business entity for your dispensary, you have to start now. Hire lawyers and accountants to help you with the legwork of forming a business entity with New Jersey’s Online Business Formation.
A business entity is an important piece of the puzzle. You need it to be able to rent commercial spaces, apply for a license, hire, etc.
| Note: Applying for a medical cannabis dispensary has a different process. The New Jersey Department of Health has outlined the application process here. |
Step 3: Budgeting
Depending on the size of your dispensary, the cost to start a dispensary in the US is millions of dollars or hundreds of thousands. Whatever the scale is, it’s not cheap to start a cannabis business. To get a ballpark figure, here’s the list of the aspects of building and operating a cannabis business in New Jersey with the average cost:
| The Annual Cost of Operating A Dispensary in New Jersey | |
| Real Estate | $125,000 |
| Licensing | $12,000 |
| Professional Fees | $50,000 |
| Staff Salary | $300,000 |
| Hardware, Software, & Security | $100,000 |
| Inventory | $1,500 per pound x 1,000 pounds = $1.5 million |
| Marketing | $100,000 |
| Grand Total Cost: $2.2 million | |
Step 4: Securing Capital
Not all funding needs to come from your pocket. There are creative ways of getting funding if you want to realize your cannabis business dream. Here are some popular sources for securing that capital:
- Family and friends: Partnering with your default support system is one of the quickest ways to secure funding.
- Partners: If your business has great potential on paper and you pitch it well, you can sell the idea to people willing to be active contributors and partners.
- Bank loans: As one of the more popular ways to secure funding, loaning from banks is one of the fastest ways of getting capital with interest. Not all banks, however, are open to cannabis businesses.
- Private funds: Angel investors, private equity, and venture capital are prime examples of private funds.
- Crowdfunding: Online platforms like Arcview Capital, Enexis, and Budbo are examples of crowdfunding sites where you can seek help from the public.
Step 5: Find the Location of Your Dispensary
Before applying for a dispensary license in New Jersey, you need to secure a location with approval from the municipality of the target location. It’s important to note that not all 400 municipalities in New Jersey allow cannabis businesses (including cultivation facilities, delivery services, etc.) to operate within their jurisdiction.
Aside from approval, dispensaries must adhere to zoning laws and pay attention to foot traffic, visibility of their store, large parking areas, etc. Additionally, you need to factor in the cost of renovating the area.
Finding a suitable location for your dispensary requires many considerations. Take as much time as you want. You don’t want to relocate repeatedly, possibly adding more unnecessary costs.
If you can, hire local real estate professionals. These well-connected agents can recommend a listing right away or scour the municipalities for you.
Step 6: Review the Basics of Applying for a New Jersey Dispensary License
The CRC has an extensive list of requirements before dispensing a license. It also has some rules for actively operating dispensaries in New Jersey. Take the time to read through the New Jersey Cannabis Regulatory Commission’s Personal Use Cannabis Rules.
Before we go to the actual application process of licensing, here is some pertinent information that will affect your application:
| Basic New Jersey Retail License Application Information |
| – To open a dispensary, you need to secure a Class 5 Cannabis Retail License, but if you’re a small operation with ten or fewer employees, you’re eligible for a microbusiness license. – A Class 5 Cannabis Retail License costs $10,000. This type of license allows you to buy cannabis from licensed businesses and sell it in your dispensary. – You’ll submit proof of your business’s real estate, articles of incorporation, the local municipality office’s location approval, security plans, business plans, operation plans, etc. The complete set of requirements can be found in the Notice of Application. – The number of licenses given annually is unlimited. You may apply at any time, and the state is now accepting applications. – Social Equity applicants are those who lived in an Economically Disadvantaged Area. If you plan to apply for a delivery license along with a retail license, all delivery vehicles have a GPS tracking system. – New Jersey recreational license applications can only be processed online. |
Step 7: Apply for a New Jersey Dispensary License
Now, here’s the fun part—the actual licensing application process. Learn the general steps and how much is a dispensary license in NJ.
A. Aside from the Class 5 Cannabis Retailer License, depending on your type of business, you might need to apply for one or two more license classes. Here’s the complete list:
- Class 1: Cultivator License
- Class 2: Manufacturer License
- Class 3: Wholesaler License (sell cannabis between retailers)
- Class 4: Distributor License (transport bulk weed between entities)
- Class 5: Retailer License
- Class 6: Delivery License
B. Now that you’ve decided on the types of cannabis business licenses you would likely apply to, you need to determine whether you’re applying for a permanent or conditional one.
Conditional licenses are temporary licenses given to applicants who haven’t secured a location or are still awaiting municipal approval for business. With this temporary license, dispensary owners can now operate while completing the requirements to secure a permanent license.
Conditional licenses are valid for 120 days. If the period has lapsed without you submitting all the requirements for a permanent license, the conditional license will expire.
C. New Jersey has created a guide to walk you through the online licensing application process. Review the guide before beginning the process. The state outlines the necessary documents to be submitted. Collect these requirements before applying.
D. Register an account on the CRC website.
E. Supply all the required information and attachments. Be truthful, and don’t skip any step or information. The extent of your information giving is part of your application’s success.
F. Pay the application fee. Class 5s must pay $400 and $200 for a conditional license.
G. Review the application for the last time, checking for errors. Submit.
H. Wait for 90 days for the approval or denial of a permanent license or 30 days for a conditional license type of application.
Step 8: Layout the Interior of the Dispensary
Your store’s interior has a huge impact on customers’ experience and the comfort of your employees. There are three main types of dispensary store layouts to adapt to: the Bank Layout, the Pharmacy Dispensary Design, and the Open Retail Model Dispensary Design. Tweak your space as your business evolves.
Regardless of your dispensary’s interior layout, here are some of the details to consider in designing the space:
- The customer and employee accessibility to their designated areas and stations.
- Cashier’s area
- Product display area
- Parking space
- Entrance and exits
- If the design is aligned with your security plan
- Waiting rooms
- Comfort rooms
- Inventory storage
- Staff lounge
- Locker rooms
- Office
Step 9: Hire Your Team
When determining what roles to hire, refer to your business plan. Here’s an average dispensary team for reference.
- Employee in Charge or supervisor (should be at least 21 years old)
- Budtenders
- Cannabis sales associates
- Security
- Inventory person
- Compliance Specialist
When a business expands, new roles like marketing specialist or sales representative can be added from time to time.
| Note: In most states, the minimum employment age within dispensaries is 21. Some states allow those at the age of 18 to work in the industry with certain limitations to not handling or selling marijuana products. |
Step 10: Review New Jersey’s Cannabis Consumer Laws
You now probably have a quick overview of New Jersey’s cannabis laws. As a reminder, here are some basic consumer laws in NJ that you must implement in selling cannabis:
- Shoppers are limited to one ounce of cannabis products per visit. This rule applies to all products, regardless of form.
- Customers may return to the store at any time without limitations on the number of times.
- A shopper can’t possess more than six ounces of cannabis products or its equivalent to other product forms at any given time.
- New Jersey’s Cannabis Regulatory, Enforcement Assistance, and Marketplace Modernization requires its residents to be 21 years and older to use cannabis and its products.
- The official NJ seed-to-sale tracking system is Metrc.
| Inventory Intake: Learn how to properly intake your supplies in the system that Metrc requires to survive the audit. |
Step 11: Find Suppliers
Like most New Jersey Class 5 retailers, you’re probably not going to be a vertically integrated business. Still, if you are, you might need to apply for more licensing types to supply your business with cannabis flowers. For most dispensaries, finding suppliers involves the following considerations:
- The available products they carry
- Quality and safety of products
- Logistics of transporting the products from the warehouse to your store
- Prices
- Trustworthiness and reliability
- Smoothness of the transaction
- Compliance with NJ’s laws on packaging and labels
Step 12: Market Your Dispensary
If you have accomplished the preceding steps, you’re now nearing opening day. The only step left is getting the word out there; marketing can do that for you.
It’s not easy to market a cannabis business because of the stigma associated with the psychoactive plant. However, there are proven and tested marketing strategies that will help promote your dispensary. Here are some of them:
- Creating an e-commerce site
- Develop a presence in cannabis-based social media or networks
- Outdoor signage that only includes your dispensary’s brand name
- TV and radio advertising is only allowed between 10:00 PM to 6:00 AM
| Add the following warning in all your ads: “This product contains cannabis. For use only by adults 21 years of age or older. Keep out of the reach of children. There may be health risks associated with the consumption of this product, including for women who are pregnant, breastfeeding, or planning on becoming pregnant. Do not drive a motor vehicle or operate heavy machinery while using this product.” |
Final Thoughts
By following the step-by-step guide to opening a dispensary in New Jersey, you’re positioning your business for better chances of success in securing a license. But that isn’t the only formula for starting a cannabis business. Now, more than ever, it’s important to partner with senior wholesale retailers who understand your needs as a dispensary owner.
The Hemp Doctor Wholesale has been in the business for over 15 years. We’ve experienced various legalization changes and numerous product releases. Whether you need a white-label service or want our products featured in your stores, we understand every nuance of the cannabis business.
Speak with our experts now at 1-888-206-3832 or email us your queries and concerns at [email protected].
Disclaimer: We always strive to provide factual and updated information, but this blog is not meant to provide legal advice. Always consult with a lawyer or relevant professional who can help you understand the legal nuances of opening a dispensary in New Jersey.
FAQs
How much does it cost to open a dispensary in New Jersey?
The startup cost of establishing a Class 5 cannabis retail business range from $250,000 to $2,000,000.
How much do dispensaries pay in New Jersey?
As per ZipRecruiter, the average hourly pay for budtenders in New Jersey is $25.50 per hour.
How many dispensaries are allowed in NJ?
The state doesn’t limit the number of dispensary licenses they award to potential store owners.
Why is NJ dispensary so expensive?
The high startup costs associated with owning a dispensary in New Jersey are a combination of expensive licensing costs, regulatory costs, tax, operational costs, supply chain challenges, market conditions, and legal and financial barriers.
Can you grow marijuana in NJ?
New Jersey residents can’t grow marijuana at home, but the idea is explored in Trenton.
Can you grow weed in NJ?
Not yet, but some municipalities are considering the idea of growing weed in NJ.
