On September 15, 2025, the New Jersey Economic Development Authority (NJEDA) announced the launch of a $15 million pilot loan program to support the state’s expanding recreational cannabis industry. The New Jersey Lending for Equity, Access, and Financing (NJ LEAF) Program is designed to provide capital to licensed cannabis cultivators, manufacturers, and testing laboratories operating in the state. Because cannabis remains a Schedule I substance under federal law, cannabis businesses are largely excluded from traditional banking services and loans. As a result, many rely on private financing, which makes it difficult to access affordable capital and cover startup costs.
To address these challenges, the NJ LEAF Program offers low-cost, flexible loans to support both fixed asset purchases and working capital needs. Loan amounts range from $100,000 to $1.5 million for fixed assets such as commercial real estate and equipment, and up to $500,000 for working capital to fund day-to-day operations. This funding allows cannabis businesses to invest in property, upgrade essential equipment, and maintain stable operations, helping to support the growth and long-term stability of New Jersey’s cannabis market.
To be eligible for the NJ LEAF Pilot Program, applicants must be for-profit entities holding a valid and current recreational annual license digital card issued by the New Jersey Cannabis Regulatory Commission (“CRC”) in one of the following categories: (1) Class 1 Cannabis Cultivator; (2) Class 2 Cannabis Manufacturer; or (3) Cannabis Testing Laboratory.
Beyond licensing, applicants must be based in New Jersey and employ fewer than 250 full-time employees across all locations, whether in or outside the state. Additionally, applicants need to be actively operating, generating revenue, and incurring expenses for at least one (1) full calendar year before applying. To demonstrate this, businesses must provide a complete federal business tax return covering a full 12 months of operations, with annual gross revenues not exceeding $5 million.
The NJ LEAF Program also emphasizes job creation and retention, requiring applicants to commit to maintaining or creating one full-time W2 job based in New Jersey for every $65,000 of loan exposure within two (2) years of closing. Financial stability is critical: applicants must secure the loan with fixed assets such as real property or machinery and maintain a historical global debt service coverage ratio of at least 1.0x.
Personal guarantees are a key part of the loan terms. All owners with 10% or greater ownership interest must provide unlimited guarantees for the duration of the loan. At least one personal guarantor must have a credit score of 650 or higher, verified through specific credit sources. Moreover, applicants are required to demonstrate substantial good standing with the New Jersey Division of Taxation by providing a valid Tax Clearance Certificate, as well as with NJEDA, CRC, the Department of Labor and Workforce Development, and the Department of Environmental Protection.
Regarding the use of funds, loan proceeds must be used exclusively for the licensed cannabis business’s operations within New Jersey. Eligible expenses include purchasing or refinancing owner-occupied commercial real estate tied to the applicant’s CRC license. These loans can range from $100,000 up to $1.5 million with a loan-to-value ratio as high as 100%. The NJ LEAF Program offers competitive terms, with real estate loans available for up to 30 years, equipment loans up to 10 years, and working capital loans up to 7 years. Interest rates are based on the equivalent U.S. Treasury rate or a floor of 1%, with adjustments for credit risk and loan duration made at closing. If the loan term surpasses the initial 10 years, an additional 25 basis points are applied for each 5-year increment. Businesses must occupy and operate at least 51% of the property and maintain this requirement throughout the loan period. However, loan proceeds must be used exclusively for business operations conducted within New Jersey.
In cases where a real estate holding company is involved in the transaction, the licensed cannabis-operating entity remains the primary applicant, and the holding company may serve as a co-applicant to facilitate the financing structure.
Besides real estate, funds may also be used to finance equipment purchases or upgrades vital to cultivation, manufacturing, or testing, as well as to cover working capital needs, such as payroll, utilities, and other operational expenses.
Applications are accepted online upon release and on a rolling basis until funds are exhausted or the three-year program period ends. The process includes submitting detailed documentation such as federal tax returns, financial projections, and proof of good standing with relevant New Jersey agencies.
This program builds on NJEDA’s ongoing commitment to supporting cannabis entrepreneurs through grants and financial tools designed to foster equitable growth and industry stability. For businesses seeking financing options, the NJ LEAF Program represents a crucial opportunity to access affordable, reliable capital in a challenging market.
At Mandelbaum Barrett P.C., our Cannabis, Hemp & Psychedelics attorneys stand at the forefront of a rapidly evolving legal landscape. We offer deep knowledge of the complex laws governing the production, sale, use, and regulation of controlled substances, including cannabis, hemp, and psychedelics.
We provide comprehensive support to clients applying for funding opportunities, including document preparation, eligibility reviews, expense tracking, and full assistance with the application process. Our team ensures that every submission is accurate, compliant, and filed promptly to give applicants the strongest chance of success.
As a full-service law firm, we continue to support our clients well beyond the application stage. We provide ongoing legal guidance to ensure compliance with all regulatory requirements, mitigate risk, and help clients maintain good standing with relevant state and local agencies. Our comprehensive approach is designed to protect your investment, reduce exposure, and position your business for sustained growth and success in this highly regulated industry.
If your cannabis business holds an annual license digital by the CRC and you are seeking financial assistance to scale your operations, this NJEDA NJ LEAF loan could provide critical support. Because competition is expected to be high, we encourage you to begin preparing your application as soon as possible.
To schedule a consultation or to learn more about how we can help you apply for the NJ LEAF loan, please contact Joshua Bauchner or Natalie Diaz.