New Jersey Announces New Cannabis Social Equity Grant Program

The New Jersey Economic Development Authority (NJEDA) last week announced the creation of a grant program to help small businesses with the costs associated with launching an enterprise in the state’s regulated cannabis industry. Known as the Cannabis Equity Grant Program, the new initiative will distribute up to $10 million in grants, with the majority earmarked for social equity applicants.

The new grant program was approved by a unanimous vote by the NJEDA board at its monthly meeting last week. In a statement, New Jersey Governor Phil Murphy said the grants will help level the playing field for entrepreneurs from underserved communities to participate in the new economy for recreational marijuana, which was legalized following the passage of a statewide referendum in 2020.

“My Administration is doubling its efforts to cultivate small businesses in burgeoning industries with massive untapped potential,” said Murphy. “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. 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.”

The program authorizes up to $10 million in grants to small businesses, including $6 million reserved for cannabis social equity applicants, such as those with past convictions for cannabis-related offenses and residents of economically disadvantaged areas. The pilot grant program was authorized by legislation sponsored by Senate President Nicholas Scutari and Assembly Budget Committee Chairwoman Eliana Pintor Marin and signed into law by Murphy in June.

“This program can have a positive impact by supporting diversity in New Jersey’s cannabis industry during its formative stages,” Scutari said in a statement. “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.” 

$6 Million For Social Equity Applicants

Up to $6 million in grants will be awarded to businesses granted conditional operating licenses from the state’s Cannabis Regulatory Commission (CRC) that are located in economically disadvantaged areas and plan to hire 50 or fewer employees. The grants of up to $250,000 can be used by businesses formed after March 2020 in designated impact zones to help cover the start-up costs of launching a licensed cannabis company, including rent, utilities, wages, and regulatory fees. 

“The Governor and Legislature made a commitment that the cannabis market would be accessible to women and minority entrepreneurs,” said Assemblywoman Verlina Reynolds-Jackson. “The cannabis market is meant to be a boon for equity, but we are finding that for some people the cost of entry is too high. It is our hope that this grant program will help to begin leveling the playing field. We want to ensure that those most impacted by the war on drugs and our underserved communities have the opportunity to be a part of the process.”

The impact zones are defined by the CRC as areas with zip codes that meet specified socioeconomic criteria including poverty and unemployment levels and were heavily impacted by arrests for marijuana offenses. Entrepreneurs awarded the grants will also participate in technical assistance and business education courses provided by the NJEDA. Businesses located in impact zones that apply for the grants can have the $1,000 application fee waived.

“Part of the impetus for passing legislation for legalization was recognition that the prohibition of cannabis has, for decades, disproportionately and negatively affected young people in Black and Latino communities,” said Senator Nellie Pou. “As Chair of the Legislative Latino Caucus, I am heartened to see NJEDA launch this Cannabis Equity Grant Program to help financially with start-up costs for new businesses in those very communities that have been so adversely affected. This is one more important piece of the social equity contract that remains at the heart of cannabis legalization in New Jersey.”

The remaining $4 million in grant funding will be made available to all business entities that have secured a site for the enterprise and been awarded municipal approval, which are both requirements that must be met to apply for an annual license from the CRC. The application window for the grants will be open for 180 days following the launch of the program, according to state officials.

“We realize how important it is to empower cannabis businesses, many of which have faced barriers to accessing financial capital in the past,” said NJEDA Chief Community Development Officer Tai Cooper. “Communities that suffered unfairly during the criminalization of cannabis need the chance to benefit from new entrepreneurial opportunities created by cannabis legalization and regulated sales. We want to see these opportunities extended to those businesses that will help fill storefronts, warehouses, and other commercial properties that closed their doors during the pandemic and bring new jobs to communities where there is the greatest need.”