A5292

An Act concerning cannabis businesses and amending P.L.2019, c.153 and P.L.2021, c.16.

Be It Enacted by the Senate and General Assembly of the State of New Jersey:

1. Section 12 of P.L.2019, c.153 (C.24:6I-7.2) is amended to read as follows:

12. a. Each application for a medical cannabis cultivator permit, medical cannabis manufacturer permit, and medical cannabis dispensary permit, and each application for annual renewal of such permit, including permit and renewal applications for microbusinesses that meet the requirements of subsection e. of section 11 of P.L.2019, c.153 (C.24:6I-7.1), shall be submitted to the commission. A full, separate application shall be required for each initial permit requested by the applicant and for each location at which an applicant seeks to operate, regardless of whether the applicant was previously issued a medical cannabis cultivator, medical cannabis manufacturer, medical cannabis dispensary, or clinical registrant permit, and regardless of whether the applicant currently holds a medical cannabis cultivator, medical cannabis manufacturer, or medical cannabis dispensary permit. Renewal applications shall be submitted to the commission on a form and in a manner as shall be specified by the commission no later than 90 days before the date the current permit will expire.

b. An initial permit application shall be evaluated according to criteria to be developed by the commission. The commission shall determine the point values to be assigned to each criterion, which shall include bonus points for applicants who are residents of New Jersey.

c. The criteria to be developed by the commission pursuant to subsection b. of this section shall include, in addition to the criteria set forth in subsections d. and e. of this section and any other criteria developed by the commission, an analysis of the applicant's operating plan, excluding safety and security criteria, which shall include the following:

(1) In the case of an applicant for a medical cannabis cultivator permit, the operating plan summary shall include a written description concerning the applicant's qualifications for, experience in, and knowledge of each of the following topics:

(a) State-authorized cultivation of medical cannabis;

(b) conventional horticulture or agriculture, familiarity with good agricultural practices, and any relevant certifications or degrees;

(d) recall plans;

(e) packaging and labeling;

(f) inventory control and tracking software or systems for the production of medical cannabis;

(g) analytical chemistry and testing of medical cannabis;

(h) water management practices;

(i) odor mitigation practices;

(j) onsite and offsite recordkeeping;

(k) strain variety and plant genetics;

(l) pest control and disease management practices, including plans for the use of pesticides, nutrients, and additives;

(m) waste disposal plans; and

(n) compliance with applicable laws and regulations.

(2) In the case of an applicant for a medical cannabis manufacturer permit, the operating plan summary shall include a written description concerning the applicant's qualifications for, experience in, and knowledge of each of the following topics:

(a) State-authorized manufacture and creation of cannabis products using appropriate extraction methods, including intended use and sourcing of extraction equipment and associated solvents or intended methods and equipment for non-solvent extraction;

(b) pharmaceutical manufacturing, good manufacturing practices, and good laboratory practices;

(d) recall plans;

(e) packaging and labeling;

(f) inventory control and tracking software or systems for the production of medical cannabis;

(g) analytical chemistry and testing of medical cannabis and medical cannabis products and formulations;

(h) water management practices;

(i) odor mitigation practices;

(j) onsite and offsite recordkeeping;

(k) a list of product formulations or products proposed to be manufactured with estimated cannabinoid profiles, if known, including varieties with high cannabidiol content;

(l) intended use and sourcing of all non-cannabis ingredients used in the manufacture and creation of cannabis products, including methods to verify or ensure the safety and integrity of those ingredients and their potential to be or contain allergens;

(m) waste disposal plans; and

(n) compliance with applicable laws and regulations.

(3) In the case of an applicant for a medical cannabis dispensary permit, the operating plan summary shall include a written description concerning the applicant's qualifications for, experience in, and knowledge of each of the following topics:

(a) State-authorized dispensation of medical cannabis to qualifying patients;

(b) healthcare, medicine, and treatment of patients with qualifying medical conditions;

(d) recall plans;

(e) packaging and labeling;

(f) inventory control and point-of-sale software or systems for the sale of medical cannabis;

(g) patient counseling procedures;

(h) the routes of administration, strains, varieties, and cannabinoid profiles of medical cannabis and medical cannabis products;

(i) odor mitigation practices;

(j) onsite and offsite recordkeeping;

(k) compliance with State and federal patient privacy rules;

(l) waste disposal plans; and

(m) compliance with applicable laws and regulations.

d. The criteria to be developed by the commission pursuant to subsection b. of this section shall include, in addition to the criteria set forth in subsections c. and e. of this section and any other criteria developed by the commission, an analysis of the following factors, if applicable:

(1) The applicant's environmental impact plan.

(2) A summary of the applicant's safety and security plans and procedures, which shall include descriptions of the following:

(a) plans for the use of security personnel, including contractors;

(b) the experience or qualifications of security personnel and proposed contractors;

(c) security and surveillance features, including descriptions of any alarm systems, video surveillance systems, and access and visitor management systems, along with drawings identifying the proposed locations for surveillance cameras and other security features;

(d) plans for the storage of medical cannabis and medical cannabis products, including any safes, vaults, and climate control systems that will be utilized for this purpose;

(e) a diversion prevention plan;

(f) an emergency management plan;

(g) procedures for screening, monitoring, and performing criminal history record background checks of employees;

(h) cybersecurity procedures, including, in the case of an applicant for a medical cannabis dispensary permit, procedures for collecting, processing, and storing patient data, and the applicant's familiarity with State and federal privacy laws;

(i) workplace safety plans and the applicant's familiarity with federal Occupational Safety and Health Administration regulations;

(j) the applicant's history of workers' compensation claims and safety assessments;

(k) procedures for reporting adverse events; and

(l) a sanitation practices plan.

(3) A summary of the applicant's business experience, including the following, if applicable:

(a) the applicant's experience operating businesses in highly-regulated industries;

(b) the applicant's experience in operating alternative treatment centers and related medical cannabis production and dispensation entities under the laws of New Jersey or any other state or jurisdiction within the United States; and

(c) the applicant's plan to comply with and mitigate the effects of 26 U.S.C. s.280E on cannabis businesses, and for evidence that the applicant is not in arrears with respect to any tax obligation to the State.

In evaluating the experience described under subparagraphs (a), (b), and (c) of this paragraph, the commission shall afford the greatest weight to the experience of the applicant itself, controlling owners, and entities with common ownership or control with the applicant; followed by the experience of those with a 15 percent or greater ownership interest in the applicant's organization; followed by significantly involved persons in the applicant's organization; followed by other officers, directors, and current and prospective employees of the applicant who have a bona fide relationship with the applicant's organization as of the date of the application.

(4) A description of the proposed location for the applicant's site, including the following, if applicable:

(a) the proposed location, the surrounding area, and the suitability or advantages of the proposed location, along with a floor plan and optional renderings or architectural or engineering plans;

(b) the submission of zoning approvals for the proposed location, which shall consist of a letter or affidavit from appropriate municipal officials. The letter or affidavit shall be in a standardized format as promulgated by the commission. The letter or affidavit shall state that the location will conform to municipal zoning requirements allowing for such activities related to the cultivation, manufacturing, or dispensing of medical cannabis, cannabis products, and related supplies as will be conducted at the proposed facility. Issuance of the letter or affidavit from appropriate municipal officials shall not be conditioned on the applicant obtaining land use approval or preliminary site plan approval from the municipality. The letter or affidavit shall be issued to the applicant within 30 days of submission of the applicant’s request. However, if the appropriate municipal officials find that the application does not comply with the municipal zoning code, the officials shall inform the applicant in writing, within 30 days of submission of the applicant’s request, of the specific provisions of the application that do not comply; and

(c) the submission of proof of local support for the suitability of the location, which may be demonstrated by a resolution adopted by the municipality's governing body indicating that the intended location is appropriately located or otherwise suitable for such activities related to the cultivation, manufacturing, or dispensing of medical cannabis, cannabis products, and related supplies as will be conducted at the proposed facility.

Notwithstanding any other provision of this subsection, an application shall be disqualified from consideration unless it includes documentation demonstrating that the applicant will have final control of the premises upon approval of the application, including, but not limited to, a lease agreement, contract for sale, title, deed, or similar documentation. In addition, if the applicant will lease the premises, the application will be disqualified from consideration unless it includes certification from the landlord that the landlord is aware that the tenant's use of the premises will involve activities related to the cultivation, manufacturing, or dispensing of medical cannabis and medical cannabis products. An application shall not be disqualified from consideration if the application does not include the materials described in subparagraph (b) or (c) of this paragraph.

(5) A community impact, social responsibility, and research statement, which shall include, but shall not be limited to, the following:

(a) a community impact plan summarizing how the applicant intends to have a positive impact on the community in which the proposed entity is to be located, which shall include an economic impact plan, a description of outreach activities, and any financial assistance or discount plans the applicant will provide to qualifying patients and designated caregivers;

(b) a written description of the applicant's record of social responsibility, philanthropy, and ties to the proposed host community;

(c) a written description of any research the applicant has conducted on the medical efficacy or adverse effects of cannabis use and the applicant's participation in or support of cannabis-related research and educational activities; and

(d) a written plan describing any research and development regarding the medical efficacy or adverse effects of cannabis, and any cannabis-related educational and outreach activities, which the applicant intends to conduct if issued a permit by the commission.

In evaluating the information submitted pursuant to subparagraphs (b) and (c) of this paragraph, the commission shall afford the greatest weight to responses pertaining to the applicant itself, controlling owners, and entities with common ownership or control with the applicant; followed by responses pertaining to those with a 15 percent or greater ownership interest in the applicant's organization; followed by significantly involved persons in the applicant's organization; followed by other officers, directors, and current and prospective employees of the applicant who have a bona fide relationship with the applicant's organization as of the date of the application.

(6) A workforce development and job creation plan, which may include information on the applicant's history of job creation and planned job creation at the proposed facility; education, training, and resources to be made available for employees; any relevant certifications; and a diversity plan.

(7) A business and financial plan, which may include, but shall not be limited to, the following:

(a) an executive summary of the applicant's business plan;

(b) a demonstration of the applicant's financial ability to implement its business plan, which may include, but shall not be limited to, bank statements, business and individual financial statements, net worth statements, and debt and equity financing statements; and

(c) a description of the applicant's plan to comply with guidance pertaining to cannabis issued by the Financial Crimes Enforcement Network under 31 U.S.C. s.5311 et seq., the federal "Bank Secrecy Act", which may be demonstrated by submitting letters regarding the applicant's banking history from banks or credit unions that certify they are aware of the business activities of the applicant, or entities with common ownership or control with the applicant, in any state where the applicant has operated a business related to medical cannabis. For the purposes of this subparagraph, the commission shall consider only bank references involving accounts in the name of the applicant or of an entity with common ownership or control with the applicant. An applicant who does not submit the information described in this subparagraph shall not be disqualified from consideration.

(8) Whether any of the applicant's majority or controlling owners were previously approved by the commission to serve as an officer, director, principal, or key employee of an alternative treatment center, or personal use cannabis establishment, distributor, or delivery service, provided any such individual served in that capacity at the alternative treatment center for six or more months.

(9) Whether the applicant can demonstrate that its governance structure includes the involvement of a school of medicine or osteopathic medicine licensed and accredited in the United States, or a general acute care hospital, ambulatory care facility, adult day care services program, or pharmacy licensed in New Jersey, provided that:

(a) the school, hospital, facility, or pharmacy has conducted or participated in research approved by an institutional review board related to cannabis involving the use of human subjects, except in the case of an accredited school of medicine or osteopathic medicine that is located and licensed in New Jersey;

(b) the school, hospital, facility, or pharmacy holds a profit share or ownership interest in the applicant's organization of 10 percent or more, except in the case of an accredited school of medicine or osteopathic medicine that is located and licensed in New Jersey; and

(c) the school, hospital, facility, or pharmacy participates in major decision-making activities within the applicant's organization, which may be demonstrated by representation on the board of directors of the applicant's organization.

(10) The proposed composition of the applicant's medical advisory board established pursuant to section 15 of P.L.2019, c.153 (C.24:6I-7.5), if any.

(11) Whether the applicant intends to or has entered into a partnership with a prisoner re-entry program for the purpose of identifying and promoting employment opportunities at the applicant's organization for former inmates and current inmates leaving the corrections system. If so, the applicant shall provide details concerning the name of the re-entry program, the employment opportunities at the applicant's organization that will be made available to the re-entry population, and any other initiatives the applicant's organization will undertake to provide support and assistance to the re-entry population.

(12) Any other information the commission deems relevant in determining whether to grant a permit to the applicant.

e. In addition to the information to be submitted pursuant to subsections c. and d. of this section, the commission shall require all permit applicants, other than applicants for a conditional permit, or for an entity that is a microbusiness pursuant to subsection e. of section 11 of P.L.2019, c.153 (C.24:6I-7.1), to submit an attestation signed by a bona fide labor organization stating that the applicant has entered into a labor peace agreement with such bona fide labor organization. Except in the case of an entity holding an unconverted conditional permit, the maintenance of a labor peace agreement with a bona fide labor organization shall be an ongoing material condition of maintaining a medical cannabis cultivator, medical cannabis manufacturer, or medical cannabis dispensary permit. The submission of an attestation and maintenance of a labor peace agreement with a bona fide labor organization by an applicant issued a conditional permit pursuant to subsection d. of section 11 of P.L.2019, c.153 (C.24:6I-7.1.) shall be a requirement for conversion of a conditional permit into a full permit. The failure to enter into a collective bargaining agreement within 200 days after the date that a medical cannabis cultivator, medical cannabis manufacturer, or medical cannabis dispensary first opens shall result in the suspension or revocation of such permit or conditional permit.

In reviewing initial permit applications, the commission shall give priority to the following, regardless of whether there is any competition among applicants for a particular type of permit:

(1) Applicants that are party to a collective bargaining agreement with a bona fide labor organization that currently represents, or is actively seeking to represent, cannabis workers in New Jersey.

(2) Applicants that are party to a collective bargaining agreement with a bona fide labor organization that currently represents cannabis workers in another state.

(3) Applicants that include a significantly involved person or persons lawfully residing in New Jersey for at least two years as of the date of the application.

(4) Applicants that submit a signed project labor agreement with a bona fide building trades labor organization, which is a form of pre-hire collective bargaining agreement covering terms and conditions of a specific project, including labor issues and worker grievances associated with that project, for the construction or retrofit of the facilities associated with the permitted entity.

(5) Applicants that submit a signed project labor agreement with a bona fide labor organization for any other applicable project associated with the permitted entity.

As used in this subsection, "bona fide labor organization" means a labor organization of any kind or employee representation committee, group, or association, in which employees participate and which exists and is constituted for the purpose, in whole or in part, of collective bargaining or otherwise dealing with medical or personal use cannabis employers concerning grievances, labor disputes, terms or conditions of employment, including wages and rates of pay, or other mutual aid or protection in connection with employment, and may be characterized by: it being a party to one or more executed collective bargaining agreements with medical or personal use cannabis employers, in this State or another state; it having a written constitution or bylaws in the three immediately preceding years; it filing the annual financial report required of labor organizations pursuant to subsection (b) of 29 U.S.C. s.431, or it having at least one audited financial report in the three immediately preceding years; it being affiliated with any regional or national association of unions, including but not limited to state and federal labor councils; or it being a member of a national labor organization that has at least 500 general members in a majority of the 50 states of the United States. A bona fide labor organization includes a bona fide building trades labor organization.

f. In reviewing an initial permit application, unless the information is otherwise solicited by the commission in a specific application question, the commission's evaluation of the application shall be limited to the experience and qualifications of the applicant's organization, including controlling owners, any entities with common ownership or control with the applicant, those with a 15 percent or greater interest in the applicant's organization, significantly involved persons in the applicant's organization, the other officers, directors, and current or prospective employees of the applicant's organization who have a bona fide relationship with the applicant's organization as of the date of the application, and consultants and independent contractors who have a bona fide relationship with the applicant as of the date of the application. Responses pertaining to applicants who are exempt from the criminal history record background check requirements of section 7 of P.L.2009, c.307 (C.24:6I-7) shall not be considered. Each applicant shall certify as to the status of the individuals and entities included in the application.

g. The commission shall conduct a disparity study to determine whether race-based measures should be considered when issuing permits pursuant to this section, and shall incorporate the policies, practices, protocols, standards, and criteria developed by the Office of Minority, Disabled Veterans, and Women Cannabis Business Development pursuant to section 32 of P.L.2019, c.153 (C.24:6I-25) to promote participation in the medical cannabis industry by persons from socially and economically disadvantaged communities, including promoting applications for, and the issuance of, medical cannabis cultivator, medical cannabis manufacturer, and medical cannabis dispensary permits to certified minority, women's, and disabled veterans' businesses. To this end, the commission shall seek to issue at least 30 percent of the total number of new medical cannabis cultivator permits, medical cannabis manufacturer permits, and medical cannabis dispensary permits issued on or after the effective date of P.L.2019, c.153 (C.24:6I-5.1 et al.) as follows:

(1) at least 15 percent of the total number of new medical cannabis cultivator permits, medical cannabis manufacturer permits, and medical cannabis dispensary permits are issued to a qualified applicant that has been certified as a minority business pursuant to P.L.1986, c.195 (C.52:27H-21.18 et seq.); and

(2) at least 15 percent of the total number of new medical cannabis cultivator permits, medical cannabis manufacturer permits, and medical cannabis dispensary permits are issued to a qualified applicant that has been certified as a women's business pursuant to P.L.1986, c.195 (C.52:27H-21.18 et seq.) or as a disabled-veterans' business, as defined in section 2 of P.L.2015, c.116 (C.52:32-31.2).

In selecting among applicants who meet these criteria, the commission shall grant a higher preference to applicants with up to two of the certifications described in this subsection.

h. The commission shall give special consideration to any applicant that has entered into an agreement with an institution of higher education to create an integrated curriculum involving the cultivation, manufacturing, dispensing or delivery of medical cannabis, provided that the curriculum is approved by both the commission and the Office of the Secretary of Higher Education and the applicant agrees to maintain the integrated curriculum in perpetuity. An integrated curriculum permit shall be subject to revocation if the IC permit holder fails to maintain or continue the integrated curriculum. In the event that, because of circumstances outside an IC permit holder's control, the IC permit holder will no longer be able to continue an integrated curriculum, the IC permit holder shall notify the commission and shall make reasonable efforts to establish a new integrated curriculum with an institution of higher education, subject to approval by the commission and the Office of the Secretary of Higher Education. If the IC permit holder is unable to establish a new integrated curriculum within six months after the date the current integrated curriculum arrangement ends, the commission shall revoke the entity's IC permit, unless the commission finds there are extraordinary circumstances that justify allowing the permit holder to retain the permit without an integrated curriculum and the commission finds that allowing the permit holder to retain the permit would be consistent with the purposes of P.L.2009, c.307 (C.24:6I-1 et al.), in which case the IC permit shall convert to a regular permit of the same type. The commission may revise the application and permit fees or other conditions for an IC permit as may be necessary to encourage applications for IC permits.

i. Application materials submitted to the commission pursuant to this section shall not be considered a public record pursuant to P.L.1963, c.73 (C.47:1A-1 et seq.), P.L.2001, c.404 (C.47:1A-5 et al.), or the common law concerning access to government records.

j. If the commission notifies an applicant that it has performed sufficiently well on multiple applications to be awarded more than one permit, the applicant shall notify the commission, within seven business days after receiving such notice, as to which permit type it will accept. For any permit award declined by an applicant pursuant to this subsection, the commission shall, upon receiving notice from the applicant of the declination, award the permit to the applicant for that permit type who, in the determination of the commission, best satisfies the commission's criteria while meeting the commission's determination of Statewide need. If an applicant fails to notify the commission as to which permit it will accept, the commission shall have the discretion to determine which permit it will award to the applicant, based on the commission's determination of Statewide need and other applications submitted for facilities to be located in the affected regions.

k. (1) Subject to the provisions of paragraph (2) of this subsection, the provisions of this section shall not apply to any permit applications submitted pursuant to a request for applications published in the New Jersey Register prior to the effective date of P.L.2019, c.153 (C.24:6I-5.1 et al.).

(2) The provisions of subsection l. of this section shall not apply to any permit applications submitted pursuant to a request for applications published in the New Jersey Register prior to the effective date of P.L.2021, c.252.

l. In addition to the information to be submitted pursuant to subsections c., d., and e. of this section, the commission shall require all permit applicants to submit a copy of any services agreement entered into by the applicant with third party entity, which agreement shall be subject to review as provided in subsection f. of section 11 of P.L.2019, c.153 (C.24:6I-7.1).

(cf: P.L.2021. c.252, s.3)

2. Section 19 of P.L.2021, c.16 (C.24:6I-36) is amended to read as follows:

19. Application For License or Conditional License.

a. Each application for an annual license to operate a cannabis establishment, distributor, or delivery service, or conditional license for a proposed cannabis establishment, distributor, or delivery service, shall be submitted to the commission. A separate license or conditional license shall be required for each location at which a cannabis establishment seeks to operate, or for the location of each premises from which a cannabis distributor or delivery service seeks to operate. Renewal applications for another annual license shall be filed no later than 90 days prior to the expiration of the establishment's, distributor's, or delivery service's license. A conditional license shall not be renewed, but replaced with an annual license upon the commission's determination of qualification for the annual license, or otherwise expire, as set forth in paragraph (2) of subsection b. of this section.

b. (1) Regarding the application for and issuance of annual licenses, the commission shall:

(a) begin accepting and processing applications within 30 days after the commission's initial rules and regulations have been adopted pursuant to subparagraph (a) of paragraph (1) of subsection d. of section 6 of P.L.2021, c.16 (C.24:6I-34);

(b) forward, within 14 days of receipt, a copy of each application to the municipality in which the applicant desires to operate the cannabis establishment, distributor, or delivery service; and

(c) verify the information contained in the application and review the qualifications for the applicable license class, set forth in section 20, 22, 23, 24, 25, or 26 of P.L.2021, c.16 (C.24:6I-37, C.24:6I-39, C.24:6I-40, C.24:6I-41, C.24:6I-42, or C.24:6I-43), and regulations concerning qualifications for licensure promulgated by the commission for which the applicant seeks licensure, and not more than 90 days after the receipt of an application, make a determination as to whether the application is approved or denied, or that the commission requires more time to adequately review the application.

The commission shall deny a license application to any applicant who fails to provide information, documentation and assurances as required by P.L.2021, c.16 (C.24:6I-31 et al.) or as requested by the commission, or who fails to reveal any material fact to qualification, or who supplies information which is untrue or misleading as to a material fact pertaining to the qualification criteria for licensure. The commission shall approve a license application that meets the requirements of this section unless the commission finds by clear and convincing evidence that the applicant would be manifestly unsuitable to perform the activities for the applicable license class for which licensure is sought.

(i) If the application is approved, upon collection of the license fee, the commission shall issue an annual license to the applicant no later than 30 days after giving notice of approval of the application unless the commission finds the applicant is not in compliance with regulations for annual licenses enacted pursuant to the provisions of paragraph (1) of subsection d. of section 6 of P.L.2021, c.16 (C.24:6I-34) or the commission is notified by the relevant municipality that the applicant is not in compliance with ordinances and regulations made pursuant to the provisions of section 31 of P.L.2021, c.16 (C.24:6I-45) and in effect at the time of application, provided, if a municipality has enacted a numerical limit on the number of cannabis establishments, distributors, or delivery services and a greater number of applicants seek licenses, the commission shall solicit and consider input from the municipality as to the municipality's preference or preferences for licensure.

(ii) If the application is denied, the commission shall notify the applicant in writing of the specific reason for its denial, and provide the applicant with the opportunity for a hearing in accordance with the "Administrative Procedure Act, P.L.1968, c.410 (C.52:14B-1 et seq.).

(2) Regarding the application for and issuance of conditional licenses, the commission shall:

(a) begin accepting and processing applications from applicants within 30 days after the commission's initial rules and regulations have been adopted pursuant to subparagraph (a) of paragraph (1) of subsection d. of section 6 of P.L.2021, c.16 (C.24:6I-34), and ensure that at least 35 percent of the total licenses issued for each class of cannabis establishment, and for cannabis distributors and delivery services, are conditional licenses, which 35 percent figure shall also include any conditional license issued to an applicant which is subsequently replaced by the commission with an annual license due to that applicant's compliance for the annual license pursuant to subsubparagraph (i) of subparagraph (d) of this paragraph;

(b) forward, within 14 days of receipt, a copy of each application to the municipality in which the applicant desires to operate a proposed cannabis establishment, or to the municipality in which the premises is located from which the applicant desires to operate a proposed cannabis distributor or delivery service; and

(c) verify the information contained in the application and review the following qualifications for a conditional license:

(i) that the application include at least one significantly involved person who has resided in this State for at least two years as of the date of the application;

(ii) a listing included with the application, showing all persons with a financial interest who also have decision making authority for the proposed cannabis establishment, distributor, or delivery service detailed in the application;

(iii) proof that the significantly involved person and any other person with a financial interest who also has decision making authority for the proposed cannabis establishment, distributor, or delivery service is 21 years of age or older;

(iv) the name, address, date of birth, and resumes of each executive officer, all significantly involved persons, and persons with a financial interest who also have decision making authority for the proposed cannabis establishment, distributor, or delivery service, as well as a photocopy of their driver's licenses or other government-issued form of identification, plus background check information in a form and manner determined by the commission in consultation with the Superintendent of State Police; concerning the background check, an application shall be denied if any person has any disqualifying conviction pursuant to subparagraph (c) of paragraph (4) of subsection a. of section 20, 22, 23, 24, 25 or 26 of P.L.2021, c.16 (C.24:6I-37, C.24:6I-39, C.24:6I-40, C.24:6I-41, C.24:6I-42, or C.24:6I-43), based upon the applicable class of cannabis establishment for which the application was submitted, or based upon the application being for a cannabis distributor or delivery service, unless the commission determines pursuant to subsubparagraph (ii) of those subparagraphs that the conviction should not disqualify the application;

(v) proof that each person with a financial interest who also has decision making authority for the proposed cannabis establishment, distributor, or delivery service has, for the immediately preceding taxable year, an adjusted gross income of no more than $200,000 or no more than $400,000 if filing jointly with another;

(vi) a certification that each person with a financial interest who also has decision making authority for the proposed cannabis establishment, distributor, or delivery service does not have any financial interest in an application for an annual license under review before the commission or a cannabis establishment, distributor, or delivery service that is currently operating with an annual license;

(vii) the federal and State tax identification numbers for the proposed cannabis establishment, distributor, or delivery service, and proof of business registration with the Division of Revenue in the Department of the Treasury;

(viii) information about the proposed cannabis establishment, distributor, or delivery service including its legal name, any registered alternate name under which it may conduct business, and a copy of its articles of organization and bylaws;

(ix) the business plan and management operation profile for the proposed cannabis establishment, distributor, or delivery service;

(x) the plan by which the applicant intends to obtain appropriate liability insurance coverage for the proposed cannabis establishment, distributor, or delivery service; and

(xi) any other requirements established by the commission pursuant to regulation; and

(d) not more than 30 days after the receipt of an application, make a determination as to whether the application is approved or denied, or that the commission requires more time to adequately review the application.

The commission shall deny a conditional license application to any applicant who fails to provide information, documentation and assurances as required by P.L.2021, c.16 (C.24:6I-31 et al.) or as requested by the commission, or who fails to reveal any material fact to qualification, or who supplies information which is untrue or misleading as to a material fact pertaining to the qualification criteria for licensure. The commission shall approve a license application that meets the requirements of this section unless the commission finds by clear and convincing evidence that the applicant would be manifestly unsuitable to perform the activities for the applicable license class for which conditional licensure is sought.

(i) If the application is approved, upon collection of the conditional license fee, the commission shall issue a conditional license to the applicant, which is non-transferable for its duration, no later than 30 days after giving notice of approval of the application, unless the commission finds the applicant is not in compliance with regulations for conditional licenses enacted pursuant to the provisions of paragraph (1) of subsection d. of section 6 of P.L.2021, c.16 (C.24:6I-34) or the commission is notified by the relevant municipality that the applicant is not in compliance with ordinances and regulations made pursuant to the provisions of section 31 of P.L.2021, c.16 (C.24:6I-45) and in effect at the time of application, provided, if a municipality has enacted a numerical limit on the number of marijuana cannabis establishments, distributors, or delivery services and a greater number of applicants seek licenses, the commission shall solicit and consider input from the municipality as to the municipality's preference or preferences for licensure. For each license issued, the commission shall also provide the approved licensee with documentation setting forth the remaining conditions to be satisfied under section 20, 22, 23, 24, 25, or 26 of P.L.2021, c.16 (C.24:6I-37, C.24:6I-39, C.24:6I-40, C.24:6I-41, C.24:6I-42, or C.24:6I-43), or relevant regulations, based upon the applicable class of cannabis establishment for which the conditional license was issued, or based upon the conditional license issued for a cannabis distributor or delivery service, and which were not already required for the issuance of that license, to be completed within 120 days of issuance of the conditional license, which period may be extended upon request to the commission for an additional period of up to 45 days at the discretion of the commission. If the commission subsequently determines during that 120-day period, or during any additional period granted, that the conditional licensee is in compliance with all applicable conditions and is implementing the plans, procedures, protocols, actions, or other measures set forth in its application, the commission shall replace the conditional license by issuing an annual license, which will expire one year from its date of issuance; if the conditional licensee is not in compliance with all applicable conditions or not implementing the plans, procedures, protocols, actions, or other measures set forth in its application, the conditional license shall automatically expire at the end of the 120-day period, or at the end of any additional period granted by the commission;

(ii) If the application is denied, the commission shall notify the applicant in writing of the specific reason for its denial, provide with this written notice a refund of 80 percent of the application fee submitted with the application, and provide the applicant with the opportunity for a hearing in accordance with the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.);

c. The commission shall require all applicants for cannabis licenses, other than applicants for a conditional license for any class of cannabis establishment, or for a cannabis distributor or delivery service, or for either a conditional or annual license for an establishment, distributor, or delivery service that is a microbusiness pursuant to subsection f. of this section, to submit an attestation signed by a bona fide labor organization stating that the applicant has entered into a labor peace agreement with such bona fide labor organization. The maintenance of a labor peace agreement with a bona fide labor organization by a licensed cannabis establishment, distributor, or delivery service, other than an establishment that is a microbusiness, shall be an ongoing material condition of the establishment's, distributor's, or delivery service's license. The submission of an attestation and maintenance of a labor peace agreement with a bona fide labor organization by an applicant issued a conditional license for a cannabis establishment, distributor, or delivery service, other than an establishment that is a microbusiness, shall be a requirement for final approval for an annual license. Failure to enter, or to make a good faith effort to enter, into a collective bargaining agreement within 200 days of the opening of a licensed cannabis establishment, distributor, or delivery service, other than an establishment that is a microbusiness, shall result in the suspension or revocation of the establishment's, distributor's, or delivery service's license.

d. (1) Each license application shall be scored and reviewed based upon a point scale with the commission determining the amount of points, the point categories, and the system of point distribution by regulation. The commission shall assign points and rank applicants according to the point system. The commission may, pursuant to a process set forth in regulation and consistent with this subsection, adjust the point system or utilize a separate point system and rankings with respect to the review of an application for which a conditional license is sought, or for which a microbusiness license is sought. If two or more eligible applicants have the same number of points, those applicants shall be grouped together and, if there are more eligible applicants in this group than the remaining number of licenses available, the commission shall utilize a public lottery to determine which applicants receive a license or conditional license, as the case may be.

(a) An initial application for licensure shall be evaluated according to criteria to be developed by the commission. There shall be included bonus points for applicants who are residents of New Jersey.

(b) The criteria to be developed by the commission pursuant to subparagraph (a) of this paragraph shall include, in addition to the criteria set forth in subparagraphs (c) and (d) of this paragraph and any other criteria developed by the commission, an analysis of the applicant's operating plan, excluding safety and security criteria, which shall include the following:

(i) In the case of an applicant for a cannabis cultivator license, the operating plan summary shall include a written description concerning the applicant's qualifications for, experience in, and knowledge of each of the following topics:

- cultivation of cannabis;

- conventional horticulture or agriculture, familiarity with good agricultural practices, and any relevant certifications or degrees;

- quality control and quality assurance;

- recall plans;

- packaging and labeling;

- inventory control and tracking software or systems for the production of personal use cannabis;

- analytical chemistry and testing of cannabis;

- water management practices;

- odor mitigation practices;

- onsite and offsite recordkeeping;

- strain variety and plant genetics;

- pest control and disease management practices, including plans for the use of pesticides, nutrients, and additives;

- waste disposal plans; and

- compliance with applicable laws and regulations.

(ii) In the case of an applicant for a cannabis manufacturer license, or, as applicable, a cannabis wholesaler license, cannabis distributor license, or cannabis delivery service license, the operating plan summary shall include a written description concerning the applicant's qualifications for, experience in, and knowledge of each of the following topics:

- manufacture and creation of cannabis products using appropriate extraction methods, including intended use and sourcing of extraction equipment and associated solvents or intended methods and equipment for non-solvent extraction;

- quality control and quality assurance;

- recall plans;

- packaging and labeling;

- inventory control and tracking software or systems for the manufacturing, warehousing, transportation, or delivery of cannabis and cannabis items;

- analytical chemistry and testing of cannabis items;

- water management practices;

- odor mitigation practices;

- onsite and offsite recordkeeping;

- a list of product formulations or products proposed to be manufactured with estimated cannabinoid profiles, if known, including varieties with high cannabidiol content;

- intended use and sourcing of all non-cannabis ingredients used in the manufacture and creation of cannabis products, including methods to verify or ensure the safety and integrity of those ingredients and their potential to be or contain allergens;

- waste disposal plans; and

- compliance with applicable laws and regulations.

(iii) In the case of an applicant for a cannabis retailer license, the operating plan summary shall include a written description concerning the applicant's qualifications for, experience in, and knowledge of each of the following topics:

- sales of cannabis items to consumers;

- cannabis product evaluation procedures;

- recall plans;

- packaging and labeling;

- inventory control and point-of-sale software or systems for the sale of cannabis items;

- the routes of administration, strains, varieties, and cannabinoid profiles of cannabis and cannabis items;

- odor mitigation practices;

- onsite and offsite recordkeeping;

- waste disposal plans; and

- compliance with applicable laws and regulations.

(c) The criteria to be developed by the commission pursuant to subparagraph (a) of this paragraph shall include, in addition to the criteria set forth in subparagraphs (b) and (d) of this paragraph and any other criteria developed by the commission, an analysis of the following factors, if applicable:

(i) The applicant's environmental impact plan.

(ii) A summary of the applicant's safety and security plans and procedures, which shall include descriptions of the following:

- plans for the use of security personnel, including contractors;

- the experience or qualifications of security personnel and proposed contractors;

- security and surveillance features, including descriptions of any alarm systems, video surveillance systems, and access and visitor management systems, along with drawings identifying the proposed locations for surveillance cameras and other security features;

- plans for the storage of cannabis and cannabis items, including any safes, vaults, and climate control systems that will be utilized for this purpose;

- a diversion prevention plan;

- an emergency management plan;

- procedures for screening, monitoring, and performing criminal history record background checks of employees;

- cybersecurity procedures;

- workplace safety plans and the applicant's familiarity with federal Occupational Safety and Health Administration regulations;

- the applicant's history of workers' compensation claims and safety assessments;

- procedures for reporting adverse events; and

- a sanitation practices plan.

(iii) A summary of the applicant's business experience, including the following, if applicable:

- the applicant's experience operating businesses in highly-regulated industries;

- the applicant's experience in operating cannabis establishments or alternative treatment centers and related cannabis production, manufacturing, warehousing, or retail entities, or experience in operating cannabis distributors or delivery services, under the laws of New Jersey or any other state or jurisdiction within the United States; and

- the applicant's plan to comply with and mitigate the effects of 26 U.S.C. s.280E on cannabis businesses, and for evidence that the applicant is not in arrears with respect to any tax obligation to the State.

In evaluating the experience described under this subsubparagraph, the commission shall afford the greatest weight to the experience of the applicant itself, controlling owners, and entities with common ownership or control with the applicant; followed by the experience of those with a 15 percent or greater ownership interest in the applicant's organization; followed by significantly involved persons in the applicant's organization; followed by other officers, directors, and current and prospective employees of the applicant who have a bona fide relationship with the applicant's organization as of the date of the application.

(iv) A description of the proposed location for the applicant's site, including the following, if applicable:

- the proposed location, the surrounding area, and the suitability or advantages of the proposed location, along with a floor plan and optional renderings or architectural or engineering plans;

- the submission of zoning approvals for the proposed location, which shall consist of a letter or affidavit from appropriate officials of the municipality. The letter or affidavit shall be in a standardized format as promulgated by the commission. The letter or affidavit shall state that the location will conform to local zoning requirements allowing for activities related to the operations of the proposed cannabis cultivator, cannabis manufacturer, cannabis wholesaler, cannabis distributor, cannabis retailer, or cannabis delivery service as will be conducted at the proposed facility. Issuance of the letter or affidavit from appropriate municipal officials shall not be conditioned on the applicant obtaining land use approval or preliminary site plan approval from the municipality. The letter or affidavit shall be issued to the applicant within 30 days of submission of the applicant’s request. However, if the appropriate municipal officials find that the application does not comply with the municipal zoning code, the officials shall inform the applicant in writing, within 30 days of submission of the applicant’s request, of the specific provisions of the application that do not comply; and

- the submission of proof of local support for the suitability of the location, which may be demonstrated by a resolution adopted by the municipality's governing body indicating that the intended location is appropriately located or otherwise suitable for activities related to the operations of the proposed cannabis cultivator, cannabis manufacturer, cannabis wholesaler, cannabis distributor, cannabis retailer, or cannabis delivery service.

An application for a cannabis retailer shall not include in that application a proposed site that would place the retailer's premises in or upon any premises in which operates a grocery store, delicatessen, indoor food market, or other store engaging in retail sales of food, or in or upon any premises in which operates a store that engages in licensed retail sales of alcoholic beverages, as defined by subsection b. of R.S.33:1-1; any application presented to the commission shall be denied if it includes that form of proposed site.

Notwithstanding any other provision of this subsubparagraph, an application shall be disqualified from consideration unless it includes documentation demonstrating that the applicant will have final control of the premises upon approval of the application, including, but not limited to, a lease agreement, contract for sale, title, deed, or similar documentation. In addition, if the applicant will lease the premises, the application will be disqualified from consideration unless it includes certification from the landlord that the landlord is aware that the tenant's use of the premises will involve activities associated with operations as a cannabis cultivator, cannabis manufacturer, cannabis wholesaler, cannabis distributor, cannabis retailer, or cannabis delivery service.

(v) A community impact, social responsibility, and research statement, which may include, but shall not be limited to, the following:

- a community impact plan summarizing how the applicant intends to have a positive impact on the community in which the proposed cannabis establishment, distributor, or delivery service is to be located, which shall include an economic impact plan and a description of outreach activities;

- a written description of the applicant's record of social responsibility, philanthropy, and ties to the proposed host community;

- a written description of any research the applicant has conducted on the adverse effects of the use of cannabis items, substance use disorder, and the applicant's participation in or support of cannabis-related research and educational activities; and

- a written plan describing any research and development regarding the adverse effects of cannabis, and any cannabis-related educational and outreach activities, which the applicant intends to conduct if issued a license by the commission.

In evaluating the information submitted pursuant to this subsubparagraph, the commission shall afford the greatest weight to responses pertaining to the applicant itself, controlling owners, and entities with common ownership or control with the applicant; followed by those with a 15 percent or greater ownership interest in the applicant's organization; followed by significantly involved persons in the applicant's organization; followed by other officers, directors, and current and prospective employees of the applicant who have a bona fide relationship with the applicant's organization as of the date of the application.

(vi) A workforce development and job creation plan, which may include information on the applicant's history of job creation and planned job creation at the proposed cannabis establishment, distributor, or delivery service; education, training, and resources to be made available for employees; any relevant certifications; and an optional diversity plan.

(vii) A business and financial plan, which may include, but shall not be limited to, the following:

- an executive summary of the applicant's business plan;

- a demonstration of the applicant's financial ability to implement its business plan, which may include, but shall not be limited to, bank statements, business and individual financial statements, net worth statements, and debt and equity financing statements; and

- a description of the applicant's plan to comply with guidance pertaining to cannabis issued by the Financial Crimes Enforcement Network under 31 U.S.C. s.5311 et seq., the federal "Bank Secrecy Act," which may be demonstrated by submitting letters regarding the applicant's banking history from banks or credit unions that certify they are aware of the business activities of the applicant, or entities with common ownership or control with the applicant, in any state where the applicant has operated a business related to personal use or medical cannabis. For the purposes of this subsubparagraph, the commission shall consider only bank references involving accounts in the name of the applicant or of an entity with common ownership or control with the applicant. An applicant who does not submit the information about a plan of compliance with the federal "Bank Secrecy Act" shall not be disqualified from consideration.

(viii) Whether any of the applicant's majority or controlling owners were previously approved by the commission to serve as an officer, director, principal, or key employee of an alternative treatment center or personal use cannabis establishment, distributor, or delivery service, provided any such individual served in that capacity for six or more months;

(ix) Any other information the commission deems relevant in determining whether to grant a license to the applicant.

(2) In ranking applications, in addition to the awarding of points as set forth in paragraph (1) of this subsection, the commission shall give priority to the following, regardless of whether there is any competition among applications for a particular class of license:

(a) Applicants that include a significantly involved person or persons lawfully residing in New Jersey for at least five years as of the date of the application.

(b) Applicants that are party to a collective bargaining agreement with a bona fide labor organization that currently represents, or is actively seeking to represent cannabis workers in New Jersey.

(c) Applicants that are party to a collective bargaining agreement with a bona fide labor organization that currently represents cannabis workers in another state.

(d) Applicants that submit a signed project labor agreement with a bona fide building trades labor organization, which is a form of pre-hire collective bargaining agreement covering terms and conditions of a specific project, including labor issues and worker grievances associated with that project, for the construction or retrofit of the facilities associated with the licensed entity.

(e) Applicants that submit a signed project labor agreement with a bona fide labor organization for any other applicable project associated with the licensed entity.

As used in this paragraph, "bona fide labor organization" means "bona fide labor organization" as defined in subsection c. of this section, and includes a bona fide building trades labor organization.

(3) In reviewing an initial license application, unless the information is otherwise solicited by the commission in a specific application question, the commission's evaluation of the application shall be limited to the experience and qualifications of the applicant's organization, including controlling owners, any entities with common ownership or control with the applicant, those with a 15 percent or greater ownership interest in the applicant's organization, significantly involved persons in the applicant's organization, the other officers, directors, and current or prospective employees of the applicant who have a bona fide relationship with the applicant's organization as of the date of the application, and consultants and independent contractors who have a bona fide relationship with the applicant as of the date of the application. Responses pertaining to applicants who are exempt from the criminal history record background check requirements of P.L.2021, c.16 (C.24:6I-31 et al.) shall not be considered. Each applicant shall certify as to the status of the individuals and entities included in the application.

(4) The commission shall give special consideration to any applicant that has entered into an agreement with an institution of higher education to create an integrated curriculum involving the cultivation, manufacturing, wholesaling, distributing, retail sales, or delivery of personal use cannabis or cannabis items, provided that the curriculum is approved by both the commission and the Office of the Secretary of Higher Education and the applicant agrees to maintain the integrated curriculum in perpetuity. An integrated curriculum license shall be subject to revocation if the license holder fails to maintain or continue the integrated curriculum. In the event that, because of circumstances outside a license holder's control, the license holder will no longer be able to continue an integrated curriculum, the license holder shall notify the commission and shall make reasonable efforts to establish a new integrated curriculum with an institution of higher education, subject to approval by the commission and the Office of the Secretary of Higher Education. If the license holder is unable to establish a new integrated curriculum within six months after the date the current integrated curriculum arrangement ends, the commission shall revoke the entity's license, unless the commission finds there are extraordinary circumstances that justify allowing the license holder to retain the license without an integrated curriculum and the commission finds that allowing the license holder to retain the license would be consistent with the purposes of P.L.2021, c.16 (C.24:6I-31 et al.). The commission may revise the application and license fees or other conditions for a license pursuant to this paragraph as may be necessary to encourage applications for licensure which involves an integrated curriculum.

(5) Application materials submitted to the commission pursuant to this section shall not be considered a public record pursuant to P.L.1963, c.73 (C.47:1A-1 et seq.), P.L.2001, c.404 (C.47:1A-5 et al.), or the common law concerning access to government records.

(6) If the commission notifies an applicant that it has performed sufficiently well on multiple applications to be awarded more than one license, the applicant shall notify the commission, within seven business days after receiving such notice, as to which class of license it will accept. For any license award that is declined by an applicant pursuant to this paragraph, the commission shall, upon receiving notice from the applicant of the declination, award the license to the applicant for that license class who, in the determination of the commission, best satisfies the commission's criteria while meeting the commission's determination of Statewide marketplace need. If an applicant fails to notify the commission as to which license it will accept, the commission shall have the discretion to determine which license it will award to the applicant, based on the commission's determination of Statewide marketplace need and other applications submitted for cannabis establishments, distributors, or delivery services to be located in the affected regions.

e. (1) The commission shall also prioritize applications on the basis of impact zones, for which past criminal marijuana enterprises contributed to higher concentrations of law enforcement activity, unemployment, and poverty, or any combination thereof, within parts of or throughout these zones, regardless of whether there is any competition among applications for a particular class of license. An "impact zone" means any municipality that:

(a) has a population of 120,000 or more according to the most recently compiled federal decennial census as of the effective date of P.L.2021, c.16 (C.24:6I-31 et al.);

(b) based upon data for calendar year 2019:

(i) ranks in the top 40 percent of municipalities in the State for marijuana- or hashish-related arrests for violation of paragraph (4) of subsection a. of N.J.S.2C:35-10;

(ii) has a crime index total of 825 or higher based upon the indexes listed in the annual Uniform Crime Report by the Division of State Police; and

(iii) has a local average annual unemployment rate that ranks in the top 15 percent of all municipalities in the State, based upon average annual unemployment rates estimated for the relevant calendar year by the Office of Research and Information in the Department of Labor and Workforce Development;

(c) is a municipality located in a county of the third class, based upon the county's population according to the most recently compiled federal decennial census as of the effective date of P.L.2021, c.16 (C.24:6I-31 et al.), that meets all of the criteria set forth in subparagraph (b) other than having a crime index total of 825 or higher; or

(d) is a municipality located in a county of the second class, based upon the county's population according to the most recently compiled federal decennial census as of the effective date of P.L.2021, c.16 (C.24:6I-31 et al.):

(i) with a population of less than 60,000 according to the most recently compiled federal decennial census, that for calendar year 2019 ranks in the top 40 percent of municipalities in the State for marijuana- or hashish-related arrests for violation of paragraph (4) of subsection a. of N.J.S.2C:35-10; has a crime index total of 1,000 or higher based upon the indexes listed in the 2019 annual Uniform Crime Report by the Division of State Police; but for calendar year 2019 does not have a local average annual unemployment rate that ranks in the top 15 percent of all municipalities, based upon average annual unemployment rates estimated for the relevant calendar year by the Office of Research and Information in the Department of Labor and Workforce Development; or

(ii) with a population of not less than 60,000 or more than 80,000 according to the most recently compiled federal decennial census; has a crime index total of 650 or higher based upon the indexes listed in the 2019 annual Uniform Crime Report; and for calendar year 2019 has a local average annual unemployment rate of 3.0 percent or higher using the same estimated annual unemployment rates.

(2) In ranking applications with respect to impact zones, the commission shall give priority to the following:

(a) An application for a cannabis establishment, distributor, or delivery service that is located, or is intended to be located, within an impact zone, and that impact zone has less than two licensees, so that there will be a prioritized distribution of licenses to at least two licensees within each impact zone.

(b) An applicant who is a current resident of an impact zone and has resided therein for three or more consecutive years at the time of making the application. To the extent reasonably practicable, at least 25 percent of the total licenses issued to applicants for a cannabis establishment, distributor, or delivery service license shall be awarded to applicants who have resided in an impact zone for three or more consecutive years at the time of making the application, regardless of where the cannabis establishment, distributor, or delivery service is, or is intended to be, located.

(c) An applicant who presents a plan, attested to, to employ at least 25 percent of employees who reside in an impact zone, of whom at least 25 percent shall reside in the impact zone nearest to the location, or intended location, of the cannabis establishment, distributor, or delivery service; failure to meet the requisite percentages of employees from an impact zone within 90 days of the opening of a licensed cannabis establishment, distributor, or delivery service shall result in the suspension or revocation of a license or conditional license, as applicable, issued based on an application with an impact zone employment plan.

f. (1) The commission shall ensure that at least 10 percent of the total licenses issued for each class of cannabis establishment, or for cannabis distributors and cannabis delivery services, are designated for and only issued to microbusinesses, and that at least 25 percent of the total licenses issued be issued to microbusinesses. The determination of the percentage for each class of license issued to microbusinesses shall include the number of conditional licenses issued to microbusinesses for each class, as the percentage of conditional licenses issued for each class pursuant to subparagraph (a) of paragraph (2) of subsection b. of this section shall not be mutually exclusive of the percentage of licenses issued to microbusinesses pursuant to this subsection. There shall not be any cap or other numerical restriction on the number of licenses issued to microbusinesses pursuant to P.L.2021, c.16 (C.24:6I-31 et al.), and this prohibition on a cap or other numerical restriction shall apply to every class of license issued. The maximum fee assessed by the commission for issuance or renewal of a license designated and issued to a microbusiness shall be no more than half the fee applicable to a license of the same class issued to a person or entity that is not a microbusiness.

(2) A microbusiness shall meet the following requirements:

(a) 100 percent of the ownership interest in the microbusiness shall be held by current New Jersey residents who have resided in the State for at least the past two consecutive years;

(b) at least 51 percent of the owners, directors, officers, or employees of the microbusiness shall be residents of the municipality in which the microbusiness is located, or to be located, or a municipality bordering the municipality in which the microbusiness is located, or to be located;

(i) employ no more than 10 employees;

(ii) operate a cannabis establishment occupying an area of no more than 2,500 square feet, and in the case of a cannabis cultivator, grow cannabis on an area no more than 2,500 square feet measured on a horizontal plane and grow above that plane not higher than 24 feet; provided, that a cannabis cultivator's grow space may, if approved by the commission, be part of a larger premises that is owned or operated by a cannabis cultivator that is not a licensed microbusiness, allowing for the sharing of a physical premises and certain business operations, but only the microbusiness cannabis cultivator shall grow cannabis on and above the cultivator's grow space;

(iii) possess no more than 1,000 cannabis plants each month, except that a cannabis distributor's possession of cannabis plants for transportation shall not be subject to this limit;

(iv) in the case of a cannabis manufacturer, acquire no more than 1,000 pounds of usable cannabis each month;

(v) in the case of a cannabis wholesaler, acquire for resale no more than 1,000 pounds of usable cannabis, or the equivalent amount in any form of manufactured cannabis product or cannabis resin, or any combination thereof, each month; and

(vi) in the case of a cannabis retailer, acquire for retail sale no more than 1,000 pounds of usable cannabis, or the equivalent amount in any form of manufactured cannabis product or cannabis resin, or any combination thereof, each month;

(d) no owner, director, officer, or other person with a financial interest who also has decision making authority for the microbusiness shall hold any financial interest in any other licensed cannabis establishment, distributor, or delivery service, whether or not a microbusiness;

(e) no owner, director, officer, or other person with a financial interest who also has decision making authority for a licensed cannabis establishment, distributor, or delivery service, whether or not a microbusiness, shall hold any financial interest in a microbusiness;

(f) the microbusiness shall not sell or transfer the license issued to it; and

(g) the microbusiness shall comply with such other requirements as may be established by the commission by regulation.

(3) A license designated and issued to a microbusiness shall be valid for one year and may be renewed annually, or alternatively replaced, while still valid, with an annual license allowing the microbusiness to convert and continue its operations as a licensed person or entity that is not a microbusiness subject to the provisions of this subsection, based upon a process and criteria established by the commission in regulation for the conversion.

(a) Any microbusiness that meets the criteria established by the commission for conversion may submit an application to convert its operations. Upon review of the application to confirm the commission's criteria have been met, the commission shall issue a new annual license to the person or entity, and the previously issued license for the microbusiness shall be deemed expired as of the date of issuance of the new annual license. If the commission determines that the criteria have not been met, the conversion application shall be denied, and the commission shall notify the microbusiness applicant of the specific reason for its denial, and provide the applicant with the opportunity for a hearing in accordance with the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.).

(b) Any new annual license issued pursuant to this paragraph allowing a microbusiness to convert and continue its operations as a licensed person or entity that is not a microbusiness subject to the provisions of this subsection shall be counted towards the percentages of licenses that are designated for and only issued to microbusinesses as set forth in paragraph (1) of this subsection, notwithstanding the microbusiness' converted operations.

g. In addition to any other information required to be submitted to the commission pursuant to this section, the commission shall require all license applicants to submit a copy of any services agreement entered into by the applicant with a third-party entity, which agreement shall be subject to review as provided in subsection h. of this section.

h. The commission shall have the authority to review any services agreement submitted pursuant to subsection g. of this section and any agreement to provide significant financial or technical assistance or the significant use of intellectual property to an applicant, to determine whether the terms of the agreement, including interest rates, returns, and fees, are commercially reasonable and consistent with the fair market value for the terms generally applicable to agreements of a comparable nature. In the event the commission determines the terms of an agreement are not commercially reasonable or consistent with the fair market value generally applicable to the services to be provided under the agreement, the commission shall have the authority to withhold approval of the license application until the parties renegotiate a new agreement that, as determined by the commission, is commercially reasonable and consistent with the fair market value for the terms generally applicable to agreements of a comparable nature. The parties to the agreement may request that the commission provide guidance as to what terms it would find to be commercially reasonable and consistent with the fair market value generally applicable to agreements of a comparable nature. Nothing in this subsection shall be construed to require the commission to award a license to an applicant if the commission determines the applicant does not otherwise meet the requirements for issuance of the license.

(cf: P.L.2023, c.177, s.55)

3. The Cannabis Regulatory Commission shall adopt rules and regulations pursuant to the “Administrative Procedure Act,” P.L.1968, c.410 (C.52:14B-1 et seq.), to effectuate the purposes of this act.

4. This act shall take effect on the 180^th day following enactment.

STATEMENT

This bill would clarify the requirement in current law that an applicant for a cannabis business license must obtain certain documentation from the municipality where the applicant intends that the cannabis business be located.

Under current law, the applicant must submit zoning approvals to the Cannabis Regulatory Commission for the proposed location of the cannabis business. The zoning approvals are in the form of a letter or affidavit from appropriate municipal officials. Under the law, the letter or affidavit is required to state that the location will conform to municipal zoning requirements allowing for such activities related to the cultivation, manufacturing, or dispensing of medical cannabis, cannabis products, and related supplies as will be conducted at the proposed facility.

This bill provides that the letter or affidavit would be in a standardized format as promulgated by the Cannabis Regulatory Commission. The bill also provides that issuance of the letter or affidavit from appropriate municipal officials would not be conditioned on the applicant obtaining land use approval or preliminary site plan approval from the municipality. Under the bill, the letter or affidavit would be required to be issued to the applicant within 30 days of submission of the applicant’s request. If the appropriate municipal officials find that the application does not comply with the municipal zoning code, the officials would be required to inform the applicant in writing, within 30 days of submission of the applicant’s request, of the specific provisions of the application that do not comply.

This bill was prompted by witnesses’ suggestions at the September 23, 2024 hearing of the General Assembly Oversight, Reform and Federal Relations Committee on municipalities' implementation of State cannabis laws and regulations.