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New Jersey is awarding $12 million in grant money to 48 licensed cannabis operators to help them start and expand their businesses. It’s part of the state’s effort to remove barriers to entry to the legal industry, especially among people from communities disproportionately harmed by the drug war.
The $250,000 award to each of the licensees represents “the largest cannabis social equity grant of its kind in the nation,” the New Jersey Economic Development Authority (NJEDA) said Wednesday as it and other state and local officials announced the new phase of funding.
The amount is twice what was originally planned for the grants round. Initially NJEDA was going to select only 24 companies to receive the money, but a further allocation of funds by Gov. Phil Murphy (D) allowed double that number of awardees.
“It is important that we build on our efforts to support the businesses seeking to enter and grow within this emerging market,” Murphy said in a statement. “The Cannabis Equity Grant Program allows us to simultaneously expand the pool of cannabis businesses in our state while also focusing on those communities most impacted by the unethical War on Drugs.”
The new awardees received so-called Joint Venture Grants, the first phase of New Jersey’s Cannabis Equity Grant Program. The money is meant to assist adult-use cannabis businesses with capital to help manage the transition from conditional licenses to annual licenses. “To ensure the communities harmed by racially-biased marijuana arrests also reap these financial benefits,” NJDEA said in its announcement, 40 percent of funds were earmarked for qualifying social equity applicants, and another 5 percent were allocated for businesses in specially designated Impact Zones.
The grants will ensure diverse cannabis entrepreneurs have access to capital. Phase II – Seed Equity Grant applications coming soon! Read more HERE: https://t.co/bXoo9Ct079
— New Jersey EDA (@NewJerseyEDA) October 3, 2023
A second phase of grants, known as Seed Equity Grants, will launch later this year and be available in awards of $150,000 apiece along with technical assistance, according to the NJEDA release. Of that funding, 100 percent will be designated for social equity applicants. In addition to the monetary award, technical assistance “will provide licensure process training, assistance in building a cannabis business team, financial management, guidance on securing investors, and development of supply chain management to name a few,” the agency said.
Dianna Houenou, chair of the state Cannabis Regulatory Commission (CRC), said the grant program “has helped to set the New Jersey cannabis market as an example for the rest of the country.”
“We were grateful NJEDA stepped up to partner with us and we were able to offer our insight into the cannabis industry and to present our vision for an equitable New Jersey market—with particular concern for those who lack access to personal or familial capital, or to traditional sources of business funding,” Houenou said. “We look forward to even more targeted investment into social equity businesses and those owned by local minority-, women- and disabled veteran-owned businesses. And we look forward to supporting the NJEDA as they make that happen.”
In June, CRC moved to accept requests for certain license types—wholesale, distribution and delivery—only from social equity applicants for one year beginning September 27.
Commissioner Charles Barker, who led the action, said at the time that the state hadn’t done enough since legal sales began April 2022 to help entrepreneurs who have been hurt by the drug war.
“Based on our current framework, I don’t believe social equity businesses—those most harmed by the failed war on drugs, that represents the people and communities that we want to see in the game—they’re not seeming to make it through the process to be considered for an award, let alone open up a business,” Barker said.
New Jersey officials also recently announced the availability of $5.5 million in marijuana revenue to support a hospital-based violence intervention grants program.
The original funding for the program came from federal funds, and the state received an additional $10 million infusion through the American Rescue Plan last year. But officials are now using cannabis impact zone funding from the state’s Cannabis Regulatory, Enforcement Assistance, and Marketplace Modernization Fund, which was created to reinvest in communities most impacted by marijuana criminalization.
Last month Murphy and Attorney General Matthew J. Platkin (D) announced that the same cannabis fund would cover a third of a separate $15-million grant program aimed at interrupting and preventing violent crime. The fund, which was established through the state’s marijuana legalization law, consists of monies from taxes on legal sales, industry fees and civil penalties.
New Jersey is among a majority of states with legal cannabis that route at least some portion of revenue toward community reinvestment.
California last month announced it was opening applications for $48 million in marijuana tax-funded community reinvestment grants, which support job placement, legal assistance, treatment of mental health and substance use disorders, referrals to medical care and other services for communities that have been disproportionately affected by the drug war. That program, which awards grants of up to $3 million, is funded exclusively through state cannabis revenue.
In June, California regulators at the Department of Cannabis Control (DCC) announced the award of $4.1 million to 18 local governments through a first-of-its-kind program to support cannabis business licensing programs and curb the illicit market.
DCC also recently awarded nearly $20 million in research grants, funded by marijuana tax revenue, to 16 academic institutions to carry out studies into cannabis—including novel cannabinoids like delta-8 THC and the genetics of the state’s numerous “legacy” strains. And in February, state officials announced the award of $15 million in grants to support local efforts to promote equity in the marijuana industry.
Meanwhile, Illinois paid out $45 million in grants last year under its Restore, Reinvest, and Renew (R3) program, which was established under the state’s adult-use cannabis legalization law. Funds went to 148 programs run by organizations operating on relatively small budgets in communities designated as socioeconomically disadvantaged.
Arizona sets aside 10 percent of marijuana tax revenue for a justice redevelopment fund, which funds public health services, counseling, job training and other social services for communities that have been adversely affected by marijuana arrests and criminalization. Applications for the state’s first round of grants under that program became available in March.
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