Growth of recreational cannabis market slowed in first quarter of 2024

Recreational cannabis sales grew by 4.4% in the first quarter of 2024, half the rate of growth seen during the prior quarter. (Michael M. Santiago | Getty Images)

Recreational sales totaled $201M in first three months of the year

New Jersey’s recreational marijuana sales grew slower in the first quarter of 2024 than they have at any other point since the state began allowing adult-use cannabis sales in April 2022.

The state’s 130 recreational dispensaries had roughly $201 million in non-medical cannabis sales during the first three months of the year, about 4.4% more than they reported in the last quarter of 2023, when recreational sales totaled $192.6 million.

The growth reflects a marked slowdown from the final quarter of 2023, when recreational marijuana sales grew by about 8.9% in what was then the lowest growth quarter on record, and it could herald the end of surging growth the adult-use market has enjoyed since its launch despite persistently high prices.

“There has been a significant increase in the number of dispensaries, which is great, that are selling cannabis products both medically and recreationally, but it is a concern for sure that the market growth rate is slowing,” said Todd Johnson, executive director of the New Jersey Cannabis Trade Association.

The Cannabis Regulatory Commission touted the first quarter sales figures in a press release last week, pointing to the 38% year-over-year growth compared to the first three months of 2023, when recreational sales totaled $145.7 million.

Commission Chair Dianna Houenou said the growth showed consumers moving away from black-market marijuana purchases and toward legally purchased cannabis. But the overwhelming share of that growth — fully 84% of it — happened in the latter three quarters of 2023.

“The significant growth in sales year over year is an indication of the strong potential of New Jersey’s cannabis market,” Jeff Brown, the commission’s executive director, said in a statement. “We anticipate that as even more dispensaries open across the state, new brands are introduced to the market, and cannabis becomes less stigmatized, sales numbers will continue to go up.”

Some cannabis boosters suggested the slowdown was a result of regular business cadence and shifting seasonal demand. Scott Rudder, president of the New Jersey CannaBusiness Association, noted sales typically slow after holiday spending sprees and sales.

“Usually, you see a slower first quarter and then it picks up, for our industry, around 4/20, which kicks into the spring and the summer, and then you kick into the fall with the holidays, so your second, third, and fourth quarters are usually your best quarters,” he said.

A spokesperson for the governor declined to comment and referred queries to the commission. More on This News Here.