Registration & Licensing
To operate a cannabis business in New Jersey a company must first register with the New Jersey Division of Revenue and Enterprise Services (DORES) 15 business days before conducting business.
The cannabis business must then apply for a license with the New Jersey Cannabis Regulatory Commission (CRC). Both medical and recreational cannabis businesses must be licensed by the CRC.
Limitations
Of note, an entity that is licensed to participate in the cannabis industry is not eligible for State or local economic incentives. For example, a cannabis business cannot be an Urban Enterprise Zone (UEZ) business or receive any of the benefits that come with that program.
Additionally, a licensed cannabis cultivator may not operate – or be located – on land that is valued, assessed, or taxed for agricultural or horticultural use.
Excise Fee
Once a cannabis business has begun operations, there are several state taxes and fees of which the business must be aware.
A cannabis cultivator (a “Class 1 licensee”) must generally charge a Social Equity Excise Fee (SEEF) on the sale or other transfer of recreational cannabis to other cannabis establishments. The SEEF is imposed at the rate of 1/3 of 1% of the statewide average retail price of an ounce of usable cannabis for consumer purchase, as determined by the CRC. For tax year 2022, the SEEF is $1.10 per ounce.
