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The Macro View of Cannabis Microbusinesses

By: Shravan Subramanian                                                                                                     November 29, 2023

Microbusinesses provide an exciting opportunity for prospective business owners to break into the evergrowing New Jersey cannabis industry. As the New Jersey market continues to evolve to support the creation of these new establishments in the state, it brings in more prospects for new applicants to come along and begin their journey. What better way than to enter the space with a license category offering a low entry barrier and minimal resources to get operations active. By operating a cannabis microbusiness, you can create a bustling small business and get your piece of the pie, even while competing with larger multi-state operators (MSOs). The potential for microbusinesses is multifaceted as they also empower the local community in which they operate. By fostering economic growth and development in local municipalities and offering job opportunities, microbusiness owners can be the small business owners who grow alongside the community they serve. 

The Cannabis Regulatory Commission (CRC) offers a set of guidelines that cannabis microbusinesses have to follow within the state. These criteria allow for strengthening local community ties and generating a competitive marketplace. According to N.J.A.C. 17:30, the regulations of microbusinesses are as follows:

  • The license applicant(s)/holder(s) must be a NJ resident for at least the last two consecutive years 
  • 51% of the ownership or employees should be from the municipality or the neighboring municipality where the microbusinesses are located
  • The microbusiness cannot employ no more than 10 employees (part-time, full-time, seasonal, etc.) at the same time
  • The cannabis space of the establishment must not exceed 2,500 square feet
  • Annual license holders of microbusinesses cannot sell or transfer their ownership 
  • Option to convert the micro-license to a full standard after 1 year of holding an annual license
  • Those who hold a decision-making authority in a certain microbusiness cannot have a financial interest in another cannabis establishment (micro or non-microbusiness)

Any of the six available license types in New Jersey can be applied for as a microbusiness. Based on your interests and what kind of operations you wish to conduct, you can engage in different areas of the cannabis marketplace. However, there are specific limitations for microbusinesses that distinguish them from standard cannabis businesses of those same license types.  A Class 1 Cultivator, an establishment that grows raw flower cannabis, is limited to possessing no more than 1,000 mature cannabis plants each month. A Class 2 Manufacturer, an establishment that creates cannabis products from that raw flower, can acquire no more than 1,000 pounds of useable cannabis each month. A Class 3 Wholesaler, an establishment that buys and resales cannabis or cannabis products in bulk, is limited in acquiring no more than 1,000 pounds of cannabis or the equivalent amount in cannabis product for resale each month. A Class 4 Distributor, an establishment that distributes cannabis or cannabis products to and from other cannabis establishments within the state, is unrestricted by how much cannabis or cannabis products it can transport. A Class 5 Retailer, an establishment that sells cannabis or cannabis products to consumers in a physical store, can acquire no more than 1,000 pounds of cannabis or the equivalent amount of cannabis product to sell each month. A Class 6 Delivery Service, an establishment that directly delivers cannabis or cannabis products from the retail store to the individual’s home, is unrestricted by how much cannabis and cannabis products it can deliver collectively. These are the license-specific regulations that a cannabis microbusiness must follow in operations.

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