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. This new program, known as the Cannabis Equity Grant Program (or Cannabis Equity Grant Program), will provide grants totaling up to $10,000,000 for social justice applicants.

Last week’s NJEDA monthly meeting unanimously approved the grant program. New Jersey Governor Phil Murphy stated that the grant program will allow entrepreneurs from low-income communities to take part in the new market for recreational marijuana. This was made possible by the passing of the 2020 statewide referendum.

“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.”

This program allows small businesses to receive up to $10,000,000 in grants. $6 Million is reserved for applicants for cannabis social equity. These include those who have been convicted of cannabis-related crimes and people living in economically disadvantaged regions. Murphy approved the pilot grant program through legislation that was introduced by Nicholas Scutari (Senator) and Eliana Pintor-Marin, Chairwoman of Assembly Budget Committee. Murphy signed it into law 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. To help with the initial costs associated with launching a cannabis business, such as rent, utilities and fees, businesses that are established in certain impact areas after March 2020 can receive grants up to $250,000. 

“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. This grant program is intended to help even the playing fields. 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.”

CRC defines the impact zones as those areas whose zip codes meet certain socioeconomic criteria, including poverty or unemployment. They also include areas that were heavily affected by marijuana arrests. The grants are also available to entrepreneurs who have been awarded technical support and courses in business education by the NJEDA. The $1,000 application fee can be waived for businesses located within the impact zone.

“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.”

All business entities who have obtained a site and received municipal approval will receive the remaining $4 million grant funding. These are two requirements to be eligible for an annual CRC license. According to officials from the state, the grant application window will remain open for 180 days after the program’s launch.

“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.”