The Medical Marijuana License Race in New Jersey
By Daniel Ulloa
After years of neglect, New Jersey is massively expanding its medical marijuana program. The NJ Department of Health (NJ DOH) has a Request for Applications (RFA) open to award 24 medical marijuana licenses to open Alternative Treatment Centers (ATCs). But getting to one can be very difficult. Last year, 146 companies tried for a license and six won. Thus, the competition is fierce and the stakes are high.
Applicants were given five weeks to complete them since the RFA’s formal announcement in July. They are due tomorrow 1st for dispensaries and the 22nd for those seeking cultivation or vertically integrated licenses.
Russ Semeran, the co-founder and CEO of Green Life, is seeking an ATC license. Three years ago he was seeking treat for Ankylosing spondylitis, a chronic illness which caused a form of arthritis in the spine and severe pain. He had been seeking effective treatment for years when a doctor prescribed him medical marijuana and it changed his life.
“I’m blessed. I have not used many dangerous pharmaceutical pain-relieve anti-inflammatory medication in two and a half years,” Semeran said about his recovery.
He was initially approached by friends who had a medical marijuana license in California to apply for a medical marijuana license last year and applied but lost after seeking licenses in each of the state’s regions. His company Greenlife NJ LLC spent over $120,000 last year to get a license. There might have been an issue with his company’s capitalization as its attorney advised.
Semeran is trying again this year with Green Life applying in Northern New Jersey for a vertically-integrated license since they are the most lucrative.
There are stringent requirements to gain a license. Eight will be awarded in the central region, eight in the northern region, seven for the south, and one “at large” whose location will be figured out during the awards process.
Five cultivation, 15 dispensary, and four vertically integrated medical marijuana licenses will be awarded. Vertical integration includes a permit for cultivation, manufacturing, and dispensing.
Those applying for a vertical permit may only apply for one permit while others can put in applications for all three types, with each one for a different region of the state.
There are currently six dispensaries operating out the state.
The application is complicated and costly at $20,000 for a single type of license. Vertical applications cost $60,000. However, those who are not accepted will receive $18,000 of their application money back. Those applying for a vertical permit may only apply for one permits while others can put in applications for all three types with each one for a different region.
It’s estimated to cost at least $100,000 to fulfill all the requirements.
Semeran has assembled what he believes is a racially diverse team including a cultivator ho is an army veteran currently working in Maine who has a formal degree in horticulture, an LGBT medical professional, a veteran who worked with a celebrity cannabis entrepreneur, a former police detective, and nationally known experts in water treatment, waste management, and security.
Plans must include provisions for security, environmental impact, quality control , and assurance. Points are being rewarded for having community ties including doing community outreach, being a New Jersey resident, and the company’s financial background. Being certified minority, women or veteran-owned counts towards 30 points and 20 points are awarded for those seeking to hire from poor, minority communities.
One hundred points go towards those with experience working in cultivation, manufacturing, or dispensaries.
He also has a former DEA agent who has experience working with the FDA on compliance.
“I have the best team you can build,” Semeran said .
In addition, he has secured community support with a letter from the mayor of the municipality where he seeks to base his company.
Those with information and insight into the process are offering for premium prices.
He noted the process for seeking counsel to be pricey with lawyers seeking up to six figures and lobbyists charging thousands to make introductions to local officials and legislators.
One issue Semeran has with the application is that it values plans to comply with labor laws and allow worker unionization at a combined 50 points while a company that has an expert on board who has contributed medical research that benefits patients only receives 10 points.
He feels this is unfair and worth challenging.
The companies with the most advantages are the larger Multi-State Operators (MSOs) who have the capital and experience to sink into the application to hire local experts and insiders.
Semeran is concerned that since he does not have strong political connections, it will adversely affect his application.
Former Governor Jim Florio and serves on the board of Nuka, a Colorado-based company seeking a license.
“What kind of chance do we have, the little people?” Semeran asked.
A law signed in July allows licenses to be rewarded to micro-businesses in the near future, which many feel will be easier to obtain than those in the current round.
New Jersey’s medical marijuana program was signed into law by then-Governor Jon Corzine in 2010. It was implemented under former Governor Chris Christie in an exceedingly restrictive program that served few patients. States whose programs were put into effect around a similar time serve far more patients.
The program was expanded in July by Governor Phil Murphy.
Colorado, a state with three million fewer people than New Jersey has 195 medical dispensaries alone.