An Analysis of New Jersey’s Proposed Cannabis Consumption Area Regulations and Key Concerns for Cannabis Retailers

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After much excitement and speculation, New Jersey’s cannabis consumption area regulations have been released by the Cannabis Regulatory Commission (CRC). Business owners and other industry stakeholders are invited to give their feedback on the proposed rules up to Saturday, March 18, 2023. Public comments can be submitted here. 

The proposed regulations establish business qualifications, along with outlining the application process and operational instructions for licensed cannabis retailers that want to have onsite spaces specifically designated for customers to consume cannabis. 

At Trichome Analytical, we support the responsible expansion of the local industry and giving medical patients and adult-use consumers more access and choices. Here’s our analysis of the new rules, and key considerations for New Jersey cannabis business owners. 

The Cost of a New Jersey Cannabis Consumption Lounge

It’s important to keep in mind that municipalities can allow or prohibit the operation of cannabis consumption areas; for example, Jersey City and Atlantic City have already approved ordinances allowing for consumption area at retail locations that have yet to open. So it’s a good idea to get your township on board before submitting the application.

The fees that licensed cannabis retailers will have to pay are as follows: It is $1,000 to apply, with the initial / renewal fees set at $1,000 annually for a microbusiness and $5,000 for standard businesses. Cannabis consumption lounges can be located indoors or outdoors. They must be separate from the dispensary sales floor (windows or walls apply), and accessed via an interior door after entering the dispensary—in other words, no walk-up directly into a lounge area. 

Ventilation regulations for indoor cannabis areas are the same as those for cigar lounges in New Jersey, meaning they must have a ventilation system that is exhausted separately so that air from the smoking areas is not recirculated to the non-smoking areas, and smoke is not back streamed into the non-smoking areas.

An outdoor lounge on the retail premises should have a fence or wall barrier to prevent any view from the sidewalk or any other pedestrian point of view. No cannabis smoke or vapor can migrate into any indoor public place or workplace.

Additional New Jersey Cannabis Lounge Regulations

Current sales limits will not change, so adult use consumers can only purchase up to the equivalent of 28.35 grams or 1 ounce of usable cannabis. Or, they can have up to 4 grams of solid cannabis concentrates or resin, the equivalent of 4 grams of concentrate in liquid form (solution in milliliters), 4 grams of vaporized formulations (oil), or 1,000 milligrams of multiple ingestible products (10 separate 100mg THC packages) like gummies. New Jersey medical cannabis consumers can purchase three times the above amounts. 

Dispensary employees must provide information on safe consumption and be sure not to over-serve anyone. They must also provide containers for consumers to store their unused cannabis when leaving the lounge. Products can be purchased in the retail dispensary and transferred by dispensary staff to the cannabis consumption area. The placement of an online delivery order might also be a way to receive cannabis in a lounge. 

Free samples are not allowed; per the rules, retailers “shall not distribute or allow others to distribute free cannabis samples on the premises of the cannabis business.” Unfortunately, this could limit the ability of small-scale cultivators and companies to promote their products, and for consumers to have the opportunity to try new items. 

No Sales of Food Allowed in Cannabis Consumption Areas

Cannabis consumption areas in New Jersey also cannot operate as retail food establishments. The sale of food, alcohol, beverages or tobacco on the premises is forbidden. Similar to breweries and wineries, though, customers can bring their own snacks and food to be consumed onsite. Food also can be delivered, and perhaps food trucks or a partnership with a local restaurant might prove to be an option moving forward.

An interesting addition to the proposed CRC regulations addresses cannabis consumption in hotels and motels: 

The CRC language states it is “not unlawful to take delivery of, or consume, a lawfully possessed cannabis item in a place where it is not prohibited to do so, including to smoke, vape, or aerosolize a cannabis item in a cannabis consumption area or in a guest room at a hotel, motel or other lodging establishment that permits such consumption, smoking, vaping or aerosolizing.” 

This verifies that consumption is allowed in smoking rooms at lodging locations without a consumption area license, and those businesses can dedicate up to 20% of their guest rooms as smoking rooms.

Although these new regulations are a good step forward, some lingering questions remain, and it is unclear how soon New Jersey’s cannabis consumption areas will begin to open after the 60-day public comment period closes. 

Trichome Analytical is an accountable consumer advocate that acts as a trusted bridge between regulators, industry and consumers. Our role in the cannabis industry is enshrined in statute and ensures important controls on safety, compliance, quality and efficacy. Reach out to Trichome Analytical today for advice, support or additional information about New Jersey’s developing cannabis regulations.