Withum’s Cannabis Sector Team and NJ Cannabis Regulatory Commissioner, Krista Nash, discussed new tax policies, and shared our unique insights and predictions for this robust industry.

1. THE FIRST 100 DAYS OF RECREATIONAL CANNABIS

2. Market Update: Regulatory
Highlights
 Inclusion of a conditional licensure process
 Establishment of the Office of Diversity and Inclusion
 Strong consumer and public health protections
 An innovative tax and fee structure that Pat Oglesby, one of the
authors of the seminal Rand Report on Marijuana Legalization
New Jersey’s ground-breaking marijuana tax – The Center for New
Revenue
Center for New Revenue Tax of the Year: New Jersey – The Center for
New Revenue

3. Market Update
Medicinal Sales Recreational Sales Total
Q4 2021 $59,023,485 $59,023,485
Q1 2022 $55,838,072 $55,838,072
Q2 2022 $59,262,014 $79,698,831 $138,960,845
Issued 8/12/2022

4. Expanded ATC’s
• Acreage CCF New Jersey
• Ascend New Jersey
• Columbia Care
• Curaleaf
• GTI New Jersey
• Terrascend
• Verano

5. ATC Expansion Conditions
Required conditions include:
• Municipal approval
• Proof of sufficient supply to continue to meet
patient need after expansion.
• Plans to ensure patient access.
• Plans to address social equity and safety.

6. Overview of Application Priority
Priority Application Type
1 Conditional Social Equity
2 Conditional Diversely Owned
3 Conditional Impact Zone
4 Conditional Bonus Points
5 Other Conditional
6 Annual Social Equity
7 Annual Diversely Owned
8 Annual Impact Zone
9 Annual Bonus Points
10 Other Annual
Ordered by 1) Priority and 2) Time
New Apps
Conversions
Cures

7. Review of Cannabis Business
Licensure Process
Two paths to full licensure for cannabis businesses:
Conditional Application Conditional License Phase Conditional Conversion
Annual License
Annual License Application

8. Conditional Application Review
• Components:
• Application Submission, Priority Review
• Completeness Review and Scoring
• Qualification and Regulatory Compliance
• Consideration by Commission

9. Conversion and Annual
Application Review
• Components:
• Application Submission, Priority Review
• Completeness and Scoring
• Criminal History, Qualification/Investigation, Probity
• Regulatory Compliance
• Approval by Commission
• For Annual and Conditional Conversion: Final
Inspection
• License Issuance

10. Overview of Applications
Received
Priority Application Type Percent of Total Apps
1 Conditional Social Equity 25%
2 Conditional Diversely Owned 52%
3 Conditional Impact Zone 5%
4 Conditional Bonus Points 2%
5 Other Conditional 5%
6 Annual Social Equity 2%
7 Annual Diversely Owned 7%
8 Annual Impact Zone 1%
9 Annual Bonus Points 1%
10 Other Annual 1%

11. Progress on Complete First
Reviews
This is a snapshot in time, and new applications, cures and conversions are being received everyday. All apps are being
reviewed in accordance with regulations and some may take longer than others to review.
Priority Application Type Percent of Total Apps Progress
1 Conditional Social Equity 25% X
2 Conditional Diversely Owned 52% X
3 Conditional Impact Zone 5% X
4 Conditional Bonus Points 2% X
5 Other Conditional 5% X
6 Annual Social Equity 2%
7 Annual Diversely Owned 7%
8 Annual Impact Zone 1%
9 Annual Bonus Points 1%
10 Other Annual 1%

12. Other Cannabis Market Revenue
 Michigan - 478 rec dispensaries = $188
million in July
 Illinois – 110 dispensaries = $135 million in
July
 Massachusetts – 216 dispensaries in May
surpassed $3 billion

13. Proposed New Rules
• Elevates review of annual priority applications
in conjunction with conditional priority apps
• Adds guidance for three license types
wholesalers, distributors, and delivery
services.
• Prohibit location changes during
conversion process
• Management and Financial Service
Agreement guardrails

14. License Violations
Category I -Repeat violations
Category II Risk of harm
Category III Fraudulent, false, or misleading information
Category IV Failure to register
Category V - Municipal Violations

15. License Violations
Category Violation 1 Violation 2 Violation 3 Violation 4 or
any
subsequent
violation
I Revocation
II 500,000 Suspension Revocation
III 250,000 500,000 Revocation
IV 10,000 25,000 50,000 Suspension
V 5,000 10,000 25,000 50,000

16. Market Barriers
• Access to capital
• Municipal approval
• Real estate

17. Q+A