How To Evaluate U.S. Cannabis License Opportunities

Submitted by The Cannabis Business Advisors

With the U.S. cannabis market expected to reach more than $30 billion by 2025, license opportunities abound for investors and current license holders. There are six states in the midwest and south with new medical cannabis licenses available, four states with both medical and adult-use license processes on the calendar, and nine states with adult-use marijuana opportunities spanning from Arizona to Maine, and as far south as Virginia. Many stakeholders are turning their attention to mid-Atlantic powerhouses New York and New Jersey, two states that legalized adult-use marijuana within five months of one another and have the potential to make a big industry impact.

National consulting firm The Cannabis Business Advisors (“CB Advisors”), led by  CEO and Founder Sara Gullickson, is focused on these emerging east coast markets. New York is expected to reach $4.2B in annual sales by 2027 and according to the Marijuana Policy Project, the entire Northeast region, including New Jersey, Connecticut, Massachusetts and Vermont, is expected to generate $8.7 billion in sales by that year. 

Gullickson, who has been actively involved in the industry for over a decade, has helped develop regulatory frameworks  for new marijuana programs on an international and national scale and has secured license permits for multiple groups  in 18 state markets. 

Through her custom consulting  work at CB Advisors, Gullickson and her team guide applicant teams on how to identify opportunities best suited for their strengths and expertise. Despite the close proximity between New York and New Jersey, there are key differences in how the states are pursuing adult-use marijuana policy and its eventual roll-out.

When comparing New York and New Jersey programs, Gullickson urges stakeholders to consider these items when deciding where to apply for a cannabis business operation. 

New York vs New Jersey: What to Consider?

1 Types of Adult-Use Licenses 

Both New York and New Jersey have legalized adult-use marijuana but the license types vary between the states. New York will offer adult-use consumption for bars and lounges, as well as microbusiness and cooperative licenses, unlike its neighbor.

New Jersey: The number of recreational marijuana business licenses available in New Jersey will be determined based on market demand, license types include: 

• Cannabis Cultivator (There will be no more than 37 Cultivation Licenses awarded for the initial 24 months.)

• Cannabis Delivery Service

• Cannabis Distributor

• Cannabis Manufacturer

• Cannabis Processor

• Cannabis Retailer

• Cannabis Wholesaler

New York: The number of recreational marijuana business licenses available in New York will be determined based on market demand, license types include:

• Adult-Use Cultivator

• Adult-use Processor

• Adult-use Retail Dispensary

• Adult-use Distributor

• Delivery

• Nursery:  This license  shall  authorize  the production, sale and distribution of clones, immature plants, seeds, and other agricultural  products used specifically for the planting, propagation, and cultivation of cannabis by licensed adult-use cultivators, cooperatives,  microbusinesses or registered organizations.

• Microbusiness: This  license shall authorize  the  limited  cultivation,  processing, distribution, delivery, and dispensing of their own adult-use cannabis and cannabis products.

• Adult-Use Consumption: A license that allows for the consumption of cannabis in an area, example a lounge or bar. 

• Adult-use Cooperative: This  license  shall authorize the acquisition, possession, cultivation, processing, distribution  and sale of cannabis to licensed  distributors,  on-site  consumption sites,  registered  organization  and/or  retail dispensaries; but not directly to cannabis consumers.

2 Local Municipality “Opt-Out” Deadlines

Cities, towns, and villages in New Jersey and New York have the ability to “opt-out” of hosting adult-use cannabis businesses within their borders; however, municipalities cannot exclude cannabis possession and use by adults 21 years of age or older. Stakeholders will want to play close attention to ensure the cannabis real estate they secure is compliant with local rules. The deadlines for municipalities to opt out are as follows:

New Jersey: August 21st, 2021.

New York:  December 2021. 

3 Social Equity & Diversity Programs

Both New York and New Jersey are implementing social equity components into their adult-use marijuana license processes. A social equity or diversity program helps ensure minority business owners and those who were adversely affected by the war on drugs have access to licensing opportunities in the cannabis space. 

New Jersey: Requires 30 percent of the licenses must be allocated to businesses owned by women, minorities or disabled veterans. Additionally, at least 25 percent should be allocated to residents of impact zones. The bill includes the creation of an Office of Minority, Disabled Veterans, and Women Cannabis Business Development which will be part of the state’s Cannabis Regulatory Commission. 

New York: Reserves 50 percent of the cannabis licenses for social equity applicants.

The social and economic equity plan ensures the inclusion of: 

• Individuals from communities disproportionately impacted by the enforcement of cannabis prohibition

• Minority-owned businesses

• Women-owned businesses

• Minority and women-owned businesses 

• Distressed farmers

• Service-disabled veterans

Since entering the cannabis industry, Gullickson has been a proponent of building diverse ownership teams. She serves as part of the ownership group of six minority and women-owned cannabis licenses and heads one of the few women-led and owned firms specializing in cannabis licensing. 

“Cannabis business ownership should be as diverse as the modern cannabis consumer. We are thrilled to see New York, America’s melting pot, and New Jersey committed to building a diverse industry, ” stated Sara Gullickson, CB Advisors CEO and Founder. 

In addition to focusing on New York and New Jersey, CB Advisors recommends stakeholders look at emerging markets Alabama, Arizona, Connecticut, and Illinois, that have active license opportunities available and are expected to generate high revenue growth in the coming years.