Applications Now Open for Six Additional Alternative Treatment Centers

New Jersey’s Department of Health is seeking applications for six new medical marijuana dispensaries, known as Alternative Treatment Centers (ATCs), to be located in the Northern, Central, and Southern regions of the State. Below is some critical information on the application process which closes on August 31, 2018.

Why the Department Needs Additional ATCs

The six current licensed ATCs are reaching their limit in terms of the number of patients they can treat. In March 2018, Governor Murphy and the Department added five additional medical conditions to the list of qualifying diagnoses eligible for treatment with medicinal marijuana. Among the conditions were two new types of chronic pain, as well as anxiety, migraines, and Tourette’s Syndrome. Since the addition of these conditions, the program has grown by over 7,000 patients and the total number is in excess of 25,000 people.

What the New ATCs Can Do

The six ATCs to be licensed will be vertically integrated and allow for the cultivation, manufacturing, and dispensing of marijuana. The Department’s objective is to have two licensees located in the Northern region (Bergen, Essex, Hudson, Morris, Passaic, Sussex, and Warren), two in the Central region (Hunterdon, Middlesex, Mercer, Monmouth, Ocean, Somerset, and Union), and two in the Southern (Atlantic, Burlington, Camden, Cape May, Cumberland, Gloucester, and Salem).

Key Dates for Submitting a Proposal

All applicants must submit any questions to the Department electronically by August 7, 2018 at 4:00 p.m. Applicants must also attend a mandatory pre-application conference on August 9, 2018. The Department will release the electronic application submission instructions at that time. Applications are due no later than August 31, 2018, at 5:00 p.m.

The Application Evaluation Criteria

The Department has a 1,000 point rubric it will use to assess the strength of an applicant’s submission.

The ability to meet overall health and safety needs to qualified patients and safety of the public accounts for 800 possible points with the largest chunk of 300 points dedicated to the ability to cultivate, manufacture, and dispense medical marijuana. Other significant sub-criteria within this qualifier include the business compliance and operational plans for an ATC (125 points); past business experience of the applicant (100 points); financing (100 points); and security plans (100 points).

Of the remaining 200 points, 150 points are allocated to community support/participation, corporate responsibility, and diversity. The last 50 points are awarded based upon the applicant’s commitment to clinical research.

Site Control and Local Approval

The applicant must show “evidence of site control for all proposed locations in the form of proof of ownership or a lease” and “written verification of the approval of the community or governing body of the municipality in which the [ATC] is or will be located.” If an applicant does not have site control and/or local approval by August 31st, it must demonstrate a plan to obtain site control and/or local approval by no later than November 30, 2018. Site control and local approval will be used as a tie-breaker if two or more applicants have the same score, as will the location(s) that expand access to the most currently qualified patients.

Other Key Application Requirements

The application process is extensive and requires documentation of a valid business registration certification, submission of Personal History Disclosure Forms (which includes consent to a criminal history background check for all principals, directors, board members, owners, and managers), and the proposed medical advisory board of the ATC.

Future Opportunities for Unsuccessful Applicants

The Department noted in its initial Request for Applications that future calls for applications may occur in Fall 2018 and Winter 2019, but these calls will not be for vertically integrated facilities. Future applicants will have to select between cultivation/manufacturing or dispensing.

Moreover, there are several bills pending in the State Legislature that would expand the medical marijuana program or allow for adult recreational use. These bills propose a separate licensing system that would allow for additional licenses beyond those currently authorized. It is unclear whether the Legislature would permit a licensee to vertically integrate its operation, as the pending bills are divergent on this topic.

Michael D. DeLoreto is an Associate in the Gibbons Government & Regulatory Affairs Department.
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