Applications for cannabis consumption area endorsements are set to open on January 2, 2025, creating regulated spaces for adults aged 21 and older to consume cannabis products purchased at licensed dispensaries. The New Jersey Cannabis Regulatory Commission (“CRC”) approved a Notice of Adoption of the Cannabis Consumption Area Rules on January 17, 2024, via Resolution 2024-192, and subsequently published an addendum to its Final Notice of Application Acceptance, detailing application scoring measures and requirements.
These endorsement applications are exclusively available to holders of Class 5 retail licenses, and applicants are not permitted to apply for a “standalone” consumption area endorsement.
Endorsement applications will open exclusively to Social Equity designated applicants on January 2, 2025. Beginning April 2, 2025, the CRC will accept applications from Diversely Owned Businesses and microbusinesses, while continuing to accept those from Social Equity Businesses. On July 2, 2025, applications will open to all other Class 5 retailers, regardless of designation status.
While the CRC has not set a statewide limit on the number of cannabis consumption areas, it restricts entities to operating only one cannabis consumption area, regardless of how many Class 5 cannabis retailer licenses or medicinal cannabis dispensary permits they hold. The endorsement is valid for one year and may be renewed annually. The endorsement application fee is $1,000, which includes a $200 submission fee and an $800 payment upon approval. Annual licensing fees are $1,000 for microbusinesses and $5,000 for standard businesses.
Both the municipality in which the consumption area is located and the CRC must approve the endorsement application. Under the CREAMM Act, municipalities can authorize or prohibit cannabis consumption areas through ordinances or regulations, including those operated by alternative treatment centers. Local ordinances may govern location, hours of operation, and impose minimum distance requirements from schools, daycare facilities, playgrounds, and places of worship. Applicants must verify compliance with all local regulations, including time, place, and manner restrictions.
Cannabis consumption areas may be indoors or outdoors. Operators of indoor consumption areas must adhere to laws applicable to cigar lounges and ensure compliance with the Smoke-Free Air Act. Outdoor areas must be partially enclosed by barriers, walls, or fences to prevent public visibility, and operators must ensure smoke or vapor does not escape into indoor public spaces or workplaces. The CRC also may require additional ventilation features for both indoor and outdoor spaces to prevent smoke migration or recirculation.
On-site food sales are prohibited; however, patrons may bring their own food or have it delivered. While cannabis dispensaries cannot share space with businesses that sell food or alcohol, such as grocery stores, delis, or indoor markets, there is no restriction on providing food delivery menus for patrons. Independent food trucks also may sell food outside the premises, provided they comply with state and local laws.
Similar to laws regulating alcohol, patrons will not be allowed to leave a consumption area with unconsumed, open packages of cannabis. If the original packaging is not resealable, the consumption area must provide take-home containers that comply with all packaging requirements. Therefore, businesses seeking a consumption area endorsement must carefully address legal and operational liabilities, including compliance with Dram Shop laws, securing and maintaining adequate insurance coverage, implementing robust age verification systems, and establishing effective emergency and security protocols.
The introduction of cannabis consumption area endorsements marks a significant step in New Jersey’s evolving cannabis industry, offering adults a safe, regulated environment to consume legal cannabis products. By implementing phased application processes and clear operational guidelines, the CRC ensures equitable opportunities while prioritizing public health and safety. As municipalities and businesses prepare to navigate these new regulations, collaboration and compliance will be key to creating spaces that balance consumer access, local control, and community standards.
Mandelbaum Barrett, P.C. offers comprehensive guidance in the evolving cannabis regulatory landscape. For additional information and to learn how we can support your success in the evolving cannabis industry, please visit our Cannabis, Hemp & Psychedelics Practice, or contact Joshua Bauchner or Natalie Diaz.
Disclaimer:
The information provided in this post is for general informational purposes only and does not constitute legal advice. While we strive to ensure the accuracy and timeliness of the content, laws and regulations frequently change, and the information may not reflect the most recent developments. If you require legal advice or assistance, please contact Joshua Bauchner or Natalie Diaz.