- License and Application fees
A $20,000 application fee is required for all applicants, which must be paid in two installments: one $18,000 check and another $2,000 check. The authorities will keep $2,000 but trash the $18,000 check if an application is denied. Medical marijuana shops, also known as Alternative Treatment Centers in New Jersey, pay $20,000 in yearly license costs, and recreational cannabis businesses will most likely pay the same. The New Jersey Cannabis Regulatory Commission sets stringent requirements for applicants for New Jersey cannabis retail application, including the submission of a thorough business plan. Environmental impact plans, community impact plans, workforce development plans, a review of the applicant’s safety and security protocols, and the preferred point-of-sale system for compliant cannabis product sales are among the criteria.
- Real Estate costs and location
Unless you own a shop, you’ll almost certainly be renting retail space in an area with strong visibility, high foot traffic, and easy access to your target audience. Being in the cannabis industry would almost certainly come at a cost, with yearly real estate costs exceeding $100,000. A retail store’s annual rent might range from $100 to $400 per square foot, depending on the area. Even if the New Jersey retail market had a $0.47/sqft drop during the pandemic, new retail sites will need to adapt to the growing trends of curbside pickup and delivery in the future to give the greatest customer experience.
- Employee salary and inventory costs
To have a steady supply of cannabis on hand, a significant investment is necessary. As a merchant, you’ll need to buy in quantity, and filling your store with high-quality cannabis might cost as much as $1,500 per pound. It’s critical to have enough stock and a buffer for inventory deterioration in your dispensary, given the projected demand. You’ll need to set aside funds for packing materials and labels as well. Effective inventory management can aid in cost reduction.
- Taxes and Marketing
The most heavily tax and regulated industry in the country includes cannabis and simply adds to the expense of marketing and advertising limitations. You should anticipate spending at least $25,000 on marketing and advertising every year or up to 10 percent of your revenues. New Jersey adult sales of cannabis are taxed at 7 percent and local governments are authorized to levy up to 2 percent of their local sales tax. The state government has to pay these taxes.
