What to expect from the legal cannabis market in New Jersey

April 20 may be the unofficial holiday for cannabis smokers, but April 21 will be the real holiday for the legal cannabis industry in New Jersey.

Adult marijuana sales will become legal in the Garden State on Thursday, opening the doors to what analysts estimate will be a $2 billion market by 2025. It’s been a long wait for recreational cannabis proponents of New Jersey: State voters first approved a ballot measure legalizing recreational marijuana sales in November 2020, and Governor Phil Murphy signed the bill into law in February 2021.

Delays in establishing a regulatory framework for the industry have left consumers waiting more than a year for when anyone over the age of 21 can enter one of the state’s dispensaries and dating legally purchased cannabis.

And after such a long wait, dispensary owners in New Jersey expect Thursday’s launch to have something “of a festive feel, that’s for sure,” said Joe Bayern, CEO of the dispensary company. cannabis Curaleaf, at CNBC Make It. “People just want to be part of the experience and learn and come from an educational perspective, to see what it’s all about.”

What you can expect to see in New Jersey

Only seven companies have received approval from the New Jersey Cannabis Regulatory Commission to begin recreational sales of marijuana flower and cannabis-infused products on April 21.

They get the first chance at the potentially huge market because they already operate medical marijuana dispensaries in the state, which means they’re less likely to sell out or face other logistical challenges first. day.

And the demand should certainly be high. Only 13 total dispensaries are set to open for recreational sales on Thursday, in a state of more than 9 million people — plus customers likely flocking in from neighboring states like Pennsylvania and New York.

Curaleaf, which is based in Wakefield, Mass., owns and operates two New Jersey locations — in Bordentown and Edgewater Park — which are adding recreational cannabis sales to their existing medical marijuana dispensaries on Thursday. Bayern say they expect long queues in the morning.

“We’ve had long queues at some of our locations with no adult use, so I think that’s only going to add to that,” he says. “We recruited additional staff, we worked on traffic studies, we opened new [point-of-sale] posts in all our clinics. So we did everything we could, I think, to prepare for that.”

Aaron Miles, chief investment officer of Chicago-based cannabis company Verano, agrees. When Illinois launched recreational sales in 2020, Miles says, some of the local Verano dispensaries saw “people waiting eight hours” in line to purchase products.

On Thursday, Verano also plans to add recreational sales to two of its New Jersey-based medical dispensaries — each called Zen Leaf and located in Lawrence and Elizabeth, respectively. Miles says his company has worked hard to prepare for and hopefully prevent the same kinds of supply and demand issues that Verano has experienced in Illinois.

The plan, he says, is largely to ensure that each dispensary is fully staffed and stocked in advance. “Are the lines going to last eight hours [in New Jersey]?” he said. “I’m not sure. But if they are, we certainly have the right kind of logistics in place to facilitate [that].”

Are there enough weeds?

New Jersey’s April 21 launch date is very intentional: State regulators have expressed concern that the recreational market launch on 04/20 would overwhelm dispensaries with new customers on the first day of the market.

In fact, both Bayern and Miles say state officials have been concerned for months that dispensaries may not have enough supplies to meet consumer demand early on. That would be a problem: Empty dispensary shelves could send customers back to the illicit market, while making the rollout of recreational sales seem poorly planned or even poorly managed.

Predictably, dispensary owners say they are ready. Miles says most cannabis companies initially braced for New Jersey’s recreational sales to begin in August 2021, and months of state delays have given everyone even more time to stock up.

Bayern acknowledge that the ‘limited number’ of dispensaries will likely create a bottleneck for customers. But that’s basically the idea: The seven multi-state companies launching recreational sales in New Jersey on Thursday can establish the market, while newer and smaller companies spend the next few months building inventory and hiring. Staff.

The approval timeline for these newer, smaller businesses — including businesses run by people of color and others affected by the war on drugs, consistent with the state’s diversity goals — is not currently unclear. Companies like Curaleaf and Verano will likely have a huge head start in establishing themselves in what is expected to become a multi-billion dollar market.

Nonetheless, Miles and Bayern agree that while they appreciate this head start, attracting more business can only help create a robust market in New Jersey that benefits all parties involved: more dispensaries of all shapes and sizes across the state could attract more customers to the legal market. cannabis market.

Growers like Curaleaf and Verano could even generate additional revenue by supplying products to their dispensaries’ smaller competitors.

“I think you’re going to see a ramp up quickly,” Miles says. “I think people have an incentive to make dispensaries for adult use.”

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