New Jersey and You: Perfect Together? The catchphrase, which was first coined by Gov. Thomas Kean, Sr., a Republican, in 1980 to attract tourism to the Garden State, could not be truer for the emerging adult-use cannabis marketplace in New Jersey.
The industry, which is expected to play a role in fueling the economy as New Jersey emerges from the pandemic, presents an opportunity for small business entrepreneurs and innovators to help establish a fair, equitable, and sustainable marketplace.
There is no template for building an industry from the ground up and you would be hard-pressed to find anyone who has. Each state is learning as they go, adopting a set of principles and often borrowing from states that have recently enacted their own programs.
There is tremendous pressure on the Cannabis Regulatory Commission (CRC) to create a workable framework and implement a program that reflects the intent of the authorizing legislation. Currently, the CRC is considering its first applications for adult-use cultivators, manufacturers, and testing laboratories. In the coming weeks, the Commission will begin the application process for retailers, with additional rules and regulations being finalized in the coming months.
To be sure, the adult-use program has its limitations. For example, there are substantial restraints to accessing capital, which may limit the awardees’ ability to conduct business. Allowing for the use of investment vehicles could help facilitate and foster generational wealth creation, which is especially important for the diverse applicants being evaluated by the CRC.
The goal throughout the legislative debate on legalized cannabis for adult use was to establish an industry that will provide opportunities for New Jersey-based small businesses with an emphasis on minority business owners. This is the challenge before the CRC.
The legalization of cannabis was framed as a social justice issue. True social equity in the industry is unachievable without a focus on creating opportunities for those who have been disproportionately affected by the War on Drugs, and minority-owned, women-owned, and veterans’-owned businesses. So far, in the State’s medical cannabis marketplace, few of the 56 licenses to sell in the State have been issued to black-owned businesses.
The CRC has set aside a total of at least 15% of licenses for certified minority-owned businesses and 15% to firms owned by women or disabled veterans; however, the majority of the ownership in the 2019 medical program awards were tied to white women, with little racial diversity achieved.
The challenges facing true equity within the industry are real – and New Jersey’s regulators are keen to support home-based businesses over Multi-State Operators (MSOs); however, absent a strong educational program for municipalities and small business entrepreneurs, it may be difficult to reach the goals of the cannabis statute.
The CRC and state are investing heavily in resources and launched social and earned media campaigns to encourage New Jersey’s entrepreneurs to enter the industry, but the question remains if this is enough. Education is needed to combat previous stigmas on cannabis, as the thought of “Reefer Madness” still exists, despite the beneficial and therapeutic qualities of the drug.
Entrepreneurship and a diverse industry are within the grasp of the state, but there is still work to be done. As mentioned, the industry can serve as a much-needed economic engine as the Garden State continues to emerge from the COVID-19 pandemic; yet the State must not favor launching a profitable industry at the expense of those who have suffered most at the hands of the War on Drugs.
New Jersey has long marketed itself as a progressive thought leader in the region and our cannabis regulations have crafted the blueprint to potentially serve as a model for true social equity and entrepreneurship in the industry.
Now, it is up to the State’s regulators to realize Governor Phil Murphy’s and the Legislatures’ intent of achieving social justice through a stronger and fairer cannabis industry that works for all.
Only then can New Jersey truly realize that: “The Garden State and Cannabis – They’re Perfect for Each Other.”