A cannabis cultivator shall have a Class 1 Cannabis Cultivator license issued by the commission for the premises at which the cannabis is grown or cultivated. Except for an initial period during which the number of licenses is capped pursuant to section 33 of P.L.2021, c.16 (C. 24:6I-46), except as otherwise provided therein concerning cannabis cultivator licenses issued to microbusinesses, the commission shall determine the maximum number of licenses, of which at least 35 percent shall be conditional licenses issued pursuant to subparagraph (a) of paragraph (2) of subsection b. of section 19 of P.L.2021, c.16 (C. 24:6I-36), and at least 10 percent of the total number of licenses and conditional licenses shall be designated for and only issued to microbusinesses pursuant to subsection f. of that section. After the initial period during which the number of licenses is capped pursuant to section 33 of P.L.2021, c.16 (C. 24:6I-46), except as otherwise provided therein concerning cannabis cultivator licenses issued to microbusinesses, the commission shall review the current number of licenses issued and, provided there exist qualified applicants, the commission shall issue a sufficient number of licenses to meet the market demands of the State, and may, as authorized by paragraph (1) of subsection a. of section 18 of P.L.2021, c.16 (C. 24:6I-35), accept new applications for additional licenses as it deems necessary to meet those demands.

a. To hold a Class 1 Cannabis Cultivator license under this section, an applicant:

(1) Shall apply for a license in the manner described in section 18 of P.L.2021, c.16 (C. 24:6I-35);

(2) Shall have at least one significantly involved person who has resided in this State for at least two years as of the date of the application, and provide proof that this person and any other person with financial interest who also has decision making authority for the cannabis cultivator listed on an application submitted under section 18 of P.L.2021, c.16 (C. 24:6I-35) is 21 years of age or older;

(3) Shall meet the requirements of any rule or regulation adopted by the commission under subsection b. of this section; and

(4) Shall provide for each of the following persons to undergo a criminal history record background check: any owner, other than an owner who holds less than a five percent investment interest in the cannabis cultivator or who is a member of a group that holds less than a 20 percent investment interest in the cannabis cultivator and no member of that group holds more than a five percent interest in the total group investment, and who lacks the authority to make controlling decisions regarding the cannabis cultivator’s operations; any director; any officer; and any employee.

(a) Pursuant to this provision, the commission is authorized to exchange fingerprint data with and receive criminal history record background information from the Division of State Police and the Federal Bureau of Investigation consistent with the provisions of applicable State and federal laws, rules, and regulations. The Division of State Police shall forward criminal history record background information to the commission in a timely manner when requested pursuant to the provisions of this section;

(b) Each person shall submit to being fingerprinted in accordance with applicable State and federal laws, rules, and regulations. No check of criminal history record background information shall be performed pursuant to this section unless a person has furnished his written consent to that check. A person who refuses to consent to, or cooperate in, the securing of a check of criminal history record background information shall not be considered for licensure as a cultivator. Each person shall bear the cost for the criminal history record background check, including all costs of administering and processing the check;

(c) (i) With respect to determining whether any conviction of a person contained in the criminal history record background check should disqualify an applicant for a Class 1 Cannabis Cultivator license, the commission shall not take into consideration any conviction for a crime or offense that occurred prior to the effective date of P.L.2021, c.16 (C. 24:6I-31 et al.) involving a controlled dangerous substance or controlled substance analog as set forth in paragraph (11) or (12) of subsection b., or subparagraph (b) of paragraph (10) of subsection b. of N.J.S.2C:35-5, or paragraph (3) or (4) of subsection a. of N.J.S.2C:35-10, or any similar indictable offense under federal law, this State’s law, or any other state’s law, or for any conviction under federal law for conduct involving cannabis or a cannabis item that is authorized by P.L.2021, c.16 (C. 24:6I-31 et al.). Additionally, the commission shall not take into consideration any other prior conviction, unless that conviction is for an indictable offense under federal law, other than a conviction for conduct involving cannabis or a cannabis item that is authorized by P.L.2021, c.16 (C. 24:6I-31 et al.), or under this State’s law, or any other state’s law that is substantially related to the qualifications, functions, or duties for which the license is required, and not more than five years have passed since the date of that conviction, satisfactory completion of probation or parole, or release from incarceration, whichever is later. In determining which indictable offenses are substantially related to the qualifications, functions, or duties for which the license is required, the commission shall at least consider any conviction involving fraud, deceit, or embezzlement, and any conviction for N.J.S.2C:35-6, employing a minor in a drug distribution scheme, or similar indictable offense in this or another jurisdiction involving the use of a minor to dispense or distribute a controlled dangerous substance or controlled substance analog;

(ii) The commission may approve an applicant for a Class 1 Cannabis Cultivator license after conducting a thorough review of any previous conviction of a person that substantially related to the qualifications, functions, or duties for which the license is required that is contained in the criminal history record background information, and this review shall include examining the nature of the indictable offense, the circumstances at the time of committing the offense, and evidence of rehabilitation since conviction. If the commission determines that the reviewed conviction should not disqualify the applicant, the applicant may be approved so long as the applicant is otherwise qualified to be issued the license; and

(d) Upon receipt and review of the criminal history record background information from the Division of State Police and the Federal Bureau of Investigation, the commission shall provide written notification to the applicant of the qualification or disqualification for a Class 1 Cannabis Cultivator license.

If the applicant is disqualified because the commission determined that a person has a disqualifying conviction pursuant to the provisions of this section, the conviction that constitutes the basis for the disqualification shall be identified in the written notice.

(e) The Division of State Police shall promptly notify the commission in the event that a person who was the subject of a criminal history record background check conducted pursuant to this section is convicted of a crime or offense in this State after the date the background check was performed. Upon receipt of that notification, the commission shall make a determination regarding the continued eligibility for the applicant, or following application, for the licensee, to hold a Class 1 Cannabis Cultivator license.

b. The commission shall adopt rules and regulations that:

(1) Provide for the annual renewal of the Class 1 Cannabis Cultivator license;

(2) Establish application, licensure, and renewal of licensure fees for cannabis cultivators in accordance with paragraph (2) of subsection a. of section 18 of P.L.2021, c.16 (C. 24:6I-35);

(3) Require usable cannabis produced by cannabis cultivators to be tested in accordance with P.L.2021, c.16 (C. 24:6I-31 et al.);

(4) Require cannabis cultivators to submit, at the time of applying for or renewing a license under P.L.2021, c.16 (C. 24:6I-31 et al.), a report describing the applicant’s or licensee’s electrical and water usage; and

(5) Require a cannabis cultivator to meet any public health and safety standards, industry best practices, and all applicable regulations established by the commission related to the production of cannabis or the propagation of immature cannabis plants and the seeds of the plant Cannabis sativa L. within the plant family Cannabaceae. The commission may regulate the number of immature cannabis plants that may be possessed by a cannabis cultivator licensed under this section, and the size of the grow canopy a cannabis cultivator licensed under this section uses to grow immature cannabis plants.

c. Fees adopted under subsection b. of this section:

(1) Shall be in the form of a schedule that imposes a greater fee for premises with more square footage or on which more mature cannabis plants are grown; and

(2) Shall be deposited in the “Cannabis Regulatory, Enforcement Assistance, and Marketplace Modernization Fund” established under section 41 of P.L.2021, c.16 (C. 24:6I-50).

d. (1) The commission shall issue or deny issuance of a Class 1 Cannabis Cultivator license or conditional license in accordance with the procedures set forth in section 18 of P.L.2021, c.16 (C. 24:6I-35).

(2) The commission may suspend or revoke a Class 1 Cannabis Cultivator license or conditional license to operate as a cannabis cultivator for cause, which shall be considered a final agency action for the purposes of the “Administrative Procedure Act,” P.L.1968, c.410 (C. 52:14B-1 et seq.) and shall be subject only to judicial review as provided in the Rules of Court.

e. A person who has been issued a license or conditional license shall display the license or conditional license at the premises at all times when cannabis is being produced.

f. As required by the commission in regulation, a licensee or conditional licensee shall report required changes in information about the licensee to the commission within the time specified by the commission.

L.2021, c.16, s.20.