NJ’s Framework For Social Equity Within The Adult-Use Recreational Cannabis Industry

This article explores the initiatives the Garden State has taken to ensure access

New Jersey became the 13th state to legalize adult-use cannabis on Feb. 22, 2021, after Governor Phil Murphy signed legalization and decriminalization bills into law. Much like the 12 states before it that decided to establish a legal adult-use recreational cannabis industry, New Jersey sought to find a pathway of equity for those who were disenfranchised by the War on Drugs. This article explores the initiatives the Garden State has taken to ensure access for such individuals who have ambitions of participating in the new regulated industry, and the plans in place to award recreational cannabis licenses to the historically disadvantaged groups. 

Leveling the Playing Field: The Microbusiness License

First and foremost, the term “social equity” cannabis operator applicant does not apply in New Jersey; the applicable terminology is a “microbusiness” license. The microbusiness license is a “reduced” form of one of the six recreational licenses that allows for the maintenance of a smaller cannabis business operation concerning capacity and quantity.  

More importantly, two microbusiness license requirements limit the ability of multi-state operators to obtain such licenses, creating an entry point to the regulated recreational market for residents of New Jersey who have been disproportionately marginalized and/or disadvantaged socially or economically by the War on Drugs.

The microbusiness license requires that: (1) 100% of the ownership in the microbusiness be held by New Jersey residents who have resided in New Jersey for at least two years prior to the submission of the microbusiness application; and (2) at least 51% of the owners, directors, officers or employees of the microbusiness must reside in the town, or the neighboring town, where the microbusiness will operate.

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