August 20, 2023

Since recreational cannabis use was legalized in New Jersey in 2022, the industry has been on fire with the high Since recreational cannabis use was legalized in New Jersey in 2022, the industry has been on fire with the high demand for buildings to grow, process, and sell cannabis. The same year cannabis was recreationally legalized in the Garden State, a study done by Grand View Research valued the industry at over $13 billion, with an expected compound annual growth rate (CAGR) of 14.2% from 2023 to 2030. But even with this feverish activity it remains a highly regulated industry with a unique set of challenges and rules. fo

Since recreational cannabis use was legalized in New Jersey in 2022, the industry has been on fire with the high demand for buildings to grow, process, and sell cannabis. The same year cannabis was recreationally legalized in the Garden State, a study done by Grand View Research valued the industry at over $13 billion, with an expected compound annual growth rate (CAGR) of 14.2% from 2023 to 2030. But even with this feverish activity it remains a highly regulated industry with a unique set of challenges and rules.

While we often associate the benefits of cannabis with its effectiveness in treating chronic pain and nausea due to chemotherapy, or perhaps with its effectiveness in treating seizures, the plant has also made its way into the cosmetic and food and beverage industries. As of 2022, approximately 64% of U.S. adults were familiar with CBD and CBD products, and approximately one-third of Americans used CBD (Gallup Survey). Given the industry’s fast- paced growth and increasingly apparent citizen interest, our team got to work.

As Stone Creek Construction Group entered the cannabis industry, we found our background in life sciences construction extremely helpful. Both industries have particular requirements around sensitive substances, most notably being the use of climate controlled environments, requiring specific ventilation, lighting, temperature, and lighting.

Knowing the unique rules for cannabis development is key to executing a successful project. Each type of cannabis-related building project needs to meet state regulations as well as municipal rules that can vary mile by mile. Navigating these waters when building can be tricky, well beyond the rather standard approach for other types of commercial buildings. Choosing the right partners for any cannabis building can streamline the development, resulting in saved time, money, and frustration. For this article we will focus on considerations when building a cultivation facility.

Finding Funding

Since cannabis is classified as a Schedule 1 controlled substance by the federal government, it remains federally illegal. Therefore securing a loan is difficult and largely unattainable from traditional banks as they must comply with federal regulations.

However, there are alternative financing sources for the industry to which license holders can turn. While these lenders are anxious to make these deals, they do want to see the borrower put their own assets into the arrangement. This means funding for cultivation facilities is most often achieved through a combination of debt and equity.

Another point of consideration when looking for a property is whether an existing space needs to be converted. Any existing spaces must be owned free and clear, as banks will not accept a property with a mortgage.

License

In New Jersey, a conditional license can be granted to those seeking to open a cannabis

r buildings to grow, process, and sell cannabis. The same year cannabis was recreationally legalized in the Garden State, a study done by Grand View Research valued the industry at over $13 billion, with an expected compound annual growth rate (CAGR) of 14.2% from 2023 to 2030. But even with this feverish activity it remains a highly regulated industry with a unique set of challenges and rules.

While we often associate the benefits of cannabis with its effectiveness in treating chronic pain and nausea due to chemotherapy, or perhaps with its effectiveness in treating seizures, the plant has also made its way into the cosmetic and food and beverage industries. As of 2022, approximately 64% of U.S. adults were familiar with CBD and CBD products, and approximately one-third of Americans used CBD (Gallup Survey). Given the industry’s fast- paced growth and increasingly apparent citizen interest, our team got to work.

As Stone Creek Construction Group entered the cannabis industry, we found our background in life sciences construction extremely helpful. Both industries have particular requirements around sensitive substances, most notably being the use of climate controlled environments, requiring specific ventilation, lighting, temperature, and lighting.

Knowing the unique rules for cannabis development is key to executing a successful project. Each type of cannabis-related building project needs to meet state regulations as well as municipal rules that can vary mile by mile. Navigating these waters when building can be tricky, well beyond the rather standard approach for other types of commercial buildings. Choosing the right partners for any cannabis building can streamline the development, resulting in saved time, money, and frustration. For this article we will focus on considerations when building a cultivation facility.

Finding Funding

Since cannabis is classified as a Schedule 1 controlled substance by the federal government, it remains federally illegal. Therefore securing a loan is difficult and largely unattainable from traditional banks as they must comply with federal regulations.

However, there are alternative financing sources for the industry to which license holders can turn. While these lenders are anxious to make these deals, they do want to see the borrower put their own assets into the arrangement. This means funding for cultivation facilities is most often achieved through a combination of debt and equity.

Another point of consideration when looking for a property is whether an existing space needs to be converted. Any existing spaces must be owned free and clear, as banks will not accept a property with a mortgage.

License

In New Jersey, a conditional license can be granted to those seeking to open a cannabis