Social Equity Businesses are owned by people who have lived in an Economically Disadvantaged Area of the state or who have convictions for cannabis-related offenses (expunged or not). Social Equity applicants are prioritized in the business license application process. This means that these applications are reviewed before all other applications, regardless of when they are received. All applications are accepted on a rolling basis – there is no deadline. Social equity microbusinesses are considered first, then social equity standard businesses, then those applying for conversion from conditional to an annual license. In an economic environment where resources such as real estate and capital are finite, this prioritization helps to level the field for social equity applicants.

To date, 375 of the 1,538 applications received are social equity applicants -- this includes applications across all classes: cultivator, manufacturer, wholesaler, distributor, retailer, delivery, and laboratory testing. Of the 375 applications received, 237 have been granted conditional licenses, nine have been approved for conversions to annual, and one has been approved for an annual license. The remaining 128 applications are in various stages of the review process, including 68 that have received cure letters with issues to resolve.

All 375 social equity applicants qualify for the designation based on living in an economically disadvantaged area for the last 5-10 years, and 247 of them have prior marijuana convictions. Of those with prior marijuana convictions, 153 have been granted conditional approval licenses, eight have been approved for an annual conversion, and one has been approved for an annual license. The remaining applications are currently being processed.

The CREAMM Act stipulates that a fee, the Social Equity Excise Fee (SEEF), be collected by cannabis cultivators when they sell or transfer products to any other license class. The Social Equity Excise Fee will raise funds that can be appropriated for initiatives such as educational support, economic development, and social support services for those persons and communities harmed by the criminalization of cannabis.

The SEEF rate may be adjusted annually by the New Jersey Cannabis Regulatory Commission and is currently set at one-third (1/3) of one percent (1%) of the statewide average retail price of cannabis. The 2023 SEEF rate is $1.52 per ounce. This rate is based on the statewide average retail price of an ounce of usable recreational cannabis between April 2022 and August 2022. 

The CREAMM Act also stipulates that a portion of SEEF revenue must be invested into initiatives such as financial support for individuals in Impact Zones. Impact Zones have an average unemployment rate of 32%, 77% more marijuana arrests, and a 34% higher Crime Index, when compared to other New Jersey communities. Of the state’s 565 municipalities, 87 qualify as Impact Zones. 

So far, the CRC has directed cannabis tax dollars to fund the Cannabis Training Academy, run by the New Jersey Business Action Network. The Cannabis Training Academy is the only program of its kind in New Jersey. It provides no-cost, online, practical application guidance for special designation candidates. It is self-directed, so participants can go at their own pace. The program will be taught by people already active in the cannabis space and will include live Q&A and mentoring. The Academy is charged with guiding people through the application process and providing them with business skills that will boost their success and make them more attractive to investors.

In 2022, three SEEF meetings were held. The public was invited to share thoughts and ideas on how the tax revenue should be used. Following those meetings, and based on public opinion, the CRC made recommendations to the Governor's office that fall into these categories: 

• economic development, 
• justice reinvestment,
• public health, and
• workforce development and education. See the full report here.

Feedback from SEEF meetings held in November 2022 and January 2023 will inform the Commission’s recommendations to the Governor and Legislature ahead of budget negotiations for the fiscal year 2024. The full videos and written public comments from all the public hearings on how to spend revenue from Social Equity Excise Fees may be viewed here.

Final say regarding the use of SEEF dollars rests in the hands of lawmakers.