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NJ Cannabis Insider: Life after Aug. 31: Gearing up for future cannabis licensing opportunities in N.J.

September 27, 2018

With the Aug. 31 deadline behind us, applications submitted, and the Department of Health (and likely other state departments) working diligently to review and determine which applicants will be granted a provisional alternative treatment center (ATC) license and which ruined their summers without reward, now is the time to begin preparing for future licensing rounds.

Interest in New Jersey’s medicinal marijuana market has been intense: 106 organizations submitted 146 applications across New Jersey’s three regions. The competition for later licensing rounds likely will be even greater—those organizations that did not win a license this past round will no doubt return for later rounds, and the barriers to entry won’t be as daunting because later rounds will not require vertical integration.

So what are the takeaways from this last application period, and how can would-be applicants best position themselves to win a future license?

Takeaway 1: The time to prepare for the next application round is now.

The Murphy Administration is clearly not afraid to make applicants work for their licenses. The last round was announced on July 16, the application was released on August 1, and the 300-page applications were due on August 31 — with critical questions and answers on how to interpret the application not issued until August 15. According to the New Jersey Register, the next application round is slated to commence at an unknown time in fall 2018, which means that a Department of Health-imposed application deadline could add to the madness of the holidays.

Takeaway 2: The most important thing to do to prepare for the next application round is to partner with a law firm or consulting firm (or both) to help find a willing host community and a properly zoned location.

This last application process was remarkably consistent with the original process under the Christie Administration, and there is no reason to believe that future rounds will be any different. Having a willing host community and “site control” is both the most difficult part of the application process and the most important. Superficially, neither local support nor site control appeared critical during the last round. Both were in Part A of the application, unscored, and applications could be submitted with the most tepid local support and a plan to later obtain site control. But applicants who paid insufficient attention to local support and site control misread the application.

Reviewers from the Department of Health want more from applicants than industry expertise and licenses in other states. They want a compelling narrative. They want to know an applicant is wanted by the community it is seeking to locate in, and not just by the mayor, but by all the local constituencies — the police department, the chamber of commerce, community leaders, and the neighborhood association. Having support from these groups, and weaving that support into a compelling narrative, will do little for Part A of the application, but it will be the difference between amassing a winning score or not in Part B.

Takeaway 3: If there are underserved areas of the North, Central, or South regions, applicants should look to locate there first.

Finally, by the time applications are due for the next round, there will be the current 6 ATCs, their approved expansion locations, and provisional licenses for 6 more ATCs from this last round. Geographic diversity and balance will become increasingly important to the state.

The coming weeks and months will no doubt be exciting for New Jersey’s expanding medicinal marijuana industry. If you want to apply for a license in the future, prepare now.

This article was originally published in NJ Cannabis Insider's September 27, 2018 issue, which can be found here.