New Jersey Cannabis Market Set to Open but Has a Long Row to Hoe
New Jersey wants it both ways.
On April 21 the Garden State will become the latest of the United States to allow the sale of recreational marijuana.
But before pot connoisseurs in the state rejoice with a bong rip, they should know that New Jersey still has some very strict rules in place.
New Jersey is the trial balloon for the Northeast tristate: New York and Connecticut will no doubt be watching the results closely.
By some estimates, New Jersey’s cannabis industry represents a $2 billion market. The spigot to that market will be turned on nearly 16 months after an estimated 67% of New Jerseyans supported a referendum that made recreational cannabis sales in the state legal.
It was the largest margin of victory for any statewide cannabis legislation ballot measure in U.S. history, according to Jersey Digs.
Of the 19 states that have legalized weed, New Jersey, Illinois and Washington are the only ones that prohibit cultivation of cannabis plants without a license.
Going even further, New Jersey is the only state that still prohibits medical-marijuana patients from growing cannabis at home.
Once you buy your cannabis, finding a place to smoke it could be a problem, too.
The state permits consumption of weed only on private property, meaning no smoking on the sidewalk, at the beach or outside restaurants and bars. And private residences, like apartment buildings, can ban smoking in their facilities if they so choose.
New York, by comparison, permits people to grow at home and smoke in any area where cigarette smoking is also allowed.
New Jersey seems to want the tax windfall that it hopes for from opening up its cannabis market, while severely circumscribing people’s ability to obtain it.
The New Jersey Cannabis Regulatory Commission’s communication department did not return TheStreet’s request for comment.
New Jersey Is Now in the Cannabis Business
New Jersey will permit seven companies, all of which are already medical-cannabis providers, to sell the drug at 13 dispensaries across the state.
Curaleaf (CURLF) is one of the seven that will have access to that market and other markets in the region.
“We are continuing to build scale and progress in all of our markets. What we are most anxious for is getting the Northeast up and running for adult use,” Curaleaf Chief Executive Joseph Bayern told TheStreet.
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Curaleaf will have three dispensaries in the southwest of the state, along U.S. Route 130, across the Delaware River from Pennsylvania.
Part of the reason Curaleaf was granted one of the seven golden tickets is that it already has the infrastructure in place to serve customers.
“I think we are very well positioned. Unlike many other [multistate operators,] we have been investing in the space,” Bayern said.
“We have opened up two new stores in the state. We believe that we are as prepared, if not better prepared, than any other players in the market,”
Other players in the market include Green Thumb’s (GTBIF) Rise dispensary. There are two RISE locations, including one in Paterson, the largest city in the state to be home to a dispensary. The other is in Bloomfield.
The New York investment firm Acreage Holdings (ACRHF) holds another seller’s license. Less than two years ago it purchased New Jersey’s Compassionate Care Foundation (medical cannabis) for $10 million.
Verano of Chicago, Columbia Care, Ascend Wellness Holdings (AAWH) , and TerrAscend (TRSSF) have also been granted licenses, along with Green Thumb, Acreage and Curaleaf.
All are multistate operators with tens of millions of dollars to build their businesses. But smaller operators that want in to the market may well be challenged in a state that is notorious for red tape and bureaucracy.
Legalizing Cannabis in the Name of Equity
“Equity” is a word that gets bandied about a lot these days.
The New Jersey government website has a page dedicated to “social equity in cannabis” where it espouses “promoting inclusion of diverse populations in the medical and recreational cannabis industries.”
Those are promising words. For Curaleaf’s part, CEO Bayern says the company is making a strong push for diversity.
“We are way ahead in the industry of figuring out a way to make an equitable marketplace,” he says. “We have been working with social-equity applicants and thought leaders to get access to the market,” he said.
This year, the company released its inaugural “Rooted in Good” social-impact report, detailing its efforts.
These include doing business with “cannabis brands, ancillary suppliers and advocacy organizations from underrepresented communities” and setting a goal of employing at least 10% of its staff “from populations touched by low-level cannabis-related offenses.”
Proponents say New Jersey has taken a step in the right direction by allowing the sale of cannabis. It now has time room to grow the business, and it’s up to the government and participating private businesses to craft a market that the state can be proud of.