New jersey’s Cannabis Business Is Booming - But it sure isn’t easy

When adult-use cannabis sales were legalized in New Jersey in February of 2021, it wasn’t just pot smokers who celebrated. Town leaders saw tax dollars and tenants for empty storefronts, and entrepreneurs saw a chance to get in on the ground floor of a lucrative new industry. Since then, business has indeed boomed: 219 operating licenses have been issued, and 110 dispensaries have opened in 20 of the Garden State’s 21 counties. (58 are recreational only, 12 are medical, and 40 are both.) Jeff Brown, executive director of the New Jersey Cannabis Regulatory Commission, says he expects weed sales in New Jersey to top $1 billion dollars this year. According to some estimates, at least one cannabis business will open in the Garden State every week for the next two years.

But breaking into the brave new world of adult-use cannabis has been anything but easy money for towns or business owners.

CORNERING THE MARKET

The dominance of corporate wholesalers like Ascend, Curaleaf, Columbia Care, Terrascend and Verano is the reason New Jersey has the highest prices for the lowest-quality marijuana anywhere in the country, says Chris Goldstein, an activist with the cannabis lobbying group NORML. “Prices are insane even for low-end products,” he says. “You’ll see shake, which is basically the trimmings off the floor, for $10 a gram. For that amount of money, the marijuana should clean my bathroom and shovel my snow.” High prices push consumers away from dispensaries and back to dealers, he says.

The poor quality of Garden State weed is also due to a virtual corporate monopoly, Goldstein says

RIGHTING WRONGS

In legalizing pot, state leaders were attempting to reverse some of the damage that criminalization had inflicted on the tens of thousands arrested for marijuana offenses in New Jersey every year, disproportionately people of color. The resulting social-equity parameters make cannabis regulations even knottier, but they do give give smaller operators a much-needed boost.

The state prioritizes the applications of operators from the pre-legalization legacy market who had cannabis convictions or were otherwise harmed during the war on drugs. Also prioritized are those who have lived in economically disadvantaged zip codes or who pledge to hire 25 percent of their workforce from these zip codes.

LOCATION, LOCATION, LOCATION

Securing a storefront is typically the biggest obstacle to prospective cannabis-business owners. Few own buildings in a sections of town approved for marijuana sales, and even if they do, they probably can’t be used to sell cannabis if there’s a mortgage on the property. That’s because most mortgage agreements stipulate that the property can’t be used for an illegal business—and cannabis is still illegal on the federal level.

Then there are the sky-high rents, especially in northern New Jersey towns like Jersey City, Hoboken and Montclair, which issue the most licenses.

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