New Jersey will launch a $10 million grant program to help financially strapped would-be cannabis operators.
The New Jersey Economic Development Authority on Wednesday announced the creation of the Cannabis Equity Grant Program after a unanimous vote at the board’s monthly meeting.
The grant program, allowing up to $10 million in funds, is aimed at helping start-ups cover early-state expenses and technical training, according to the EDA.
The pilot program is the result of legislation sponsored by Senate President Nicholas Scutari, D-Union, and Assembly Budget Committee Chairwoman Eliana Pintor Marin, D-Essex, and signed by Gov. Phil Murphy on June 30. The pilot allows the EDA to offer qualifying small businesses licensed in the state’s nascent cannabis industry to apply for financial assistance.
“The establishment of the Cannabis Equity Grant Program will help aspiring small business owners meet start-up expenses in a pivotal sector within our state’s ever-growing economy,” Murphy said in a statement.
“Most importantly, the program will erode considerable barriers to access for communities of color, which this program will help to equip with the resources they need to not just enter, but thrive, in this exciting new industry.”
Of the $10 million, $6 million will be made available to qualifying social equity applicants, including those with previous cannabis convictions or who live in economically disadvantaged areas.
Businesses awarded conditional licenses from the New Jersey Cannabis Regulatory Commission that are to have 50 or fewer employees and located in economically disadvantaged areas can receive up to $250,000 of the grant money to help with certain start-up expenses like regulatory fees, rental expenses, utilities, and wages.
This portion of the grant is tied to legislation signed earlier this year allowing for allocations to impact zones, defined by the CRC as areas with zip codes that meet certain socioeconomic criteria, including unemployment and poverty levels, and were heavily hurt by the war on drugs with significant marijuana arrests.
The remaining $4 million will be open to all entities who have secured municipal approvals and site control over real estate properties for their businesses, both of which are required by the CRC to apply for an annual cannabis license.
As a way to further encourage participants in economically disadvantaged areas, the application fee of $1,000 for those in impact zones may be waived, said the NJEDA. The applications window will stay open for 180 days following the grant program’s launch.
EDA Chief Executive Officer Tim Sullivan said in a statement the grant program will go toward “building a thriving and inclusive cannabis sector that maximizes opportunities for underserved communities and people impacted by the war on drugs.”
“We look forward to continuing to partner with the Cannabis Regulatory Commission to advance additional programs to support entrepreneurs in this rapidly developing sector,” Sullivan said.
Scutari, the state Senate’s chief sponsor of the EDA bill, said the grant program could help attract and retain a more diverse pool of applicants to the industry in its formative stages.
“As the market continues its successful growth, these grants will help provide more opportunities to a greater number of operators in a larger number of communities to participate,” Scutari said.
New Jersey entered the adult marijuana recreational market with a statewide launch on April 21. Since then 20 locations have opened and are all owned by eight giant national companies, known as multi-state operators or MSOs.
Operators of smaller non multi-state owned businesses and minority and women-owned enterprises have told NJ Advance Media that a lack of capital is their biggest hurdle in entering the industry.
“The Cannabis Equity Grant Program will help level the playing field for entrepreneurs looking to enter New Jersey’s adult-use cannabis market,” said Pintor Marin. “By prioritizing equity and inclusion, we can establish a socially responsible cannabis industry that will create jobs and opportunities for those who have been disproportionately impacted.”
New Jersey CRC Chairwoman Dianna Houenou also praised the pilot.
“The New Jersey Cannabis Regulatory Commission has, from the beginning, understood that if we want New Jersey’s cannabis market to reflect the diversity of its residents, and if we want to ensure that it is inclusive of groups that bear the scars of prohibition, then designated access to capital would be essential for some applicants,” Houenou said. “I am thrilled to see this program become a reality and I look forward to seeing its substantive impact leading to cannabis entrepreneurs opening for business.”
John E. Harmon, Sr., Founder, President and CEO of the African American Chamber of Commerce of New Jersey said the pilot will provide additional resources to those most in need to cross barriers to entry into what is already emerging as a lucrative industry.
“We are pleased with the efforts of the NJEDA to authorize critical resources that will assist our constituency in advancing their plans to participate in the recreational cannabis industry in our state,” said Harmon.
“Start up funding is the largest hurdle many small businesses face, so it is exciting to see there will now be grant funding to help small businesses actually make it through this process and do so in a way that allows them to stay independent,” Villars told NJ Advance Media on Wednesday. “My only complaint is I wish it would have come sooner.
“There are a lot of conditional license recipients that needed a program like this in 2022.”