Starting a business is difficult in expensive, overly regulated and business-unfriendly New Jersey. Starting one that grows, processes or sells cannabis looks especially challenging.
Applications to get into the promising new industry have been piling up since the state legalized marijuana for adults in 2021 and started taking applications later that year. Stores for recreational use have been slow to open, and the number of cannabis sellers in this region can be counted on two hands. Statewide, only 37 recreational cannabis dispensaries are operating, with another 13 selling medical marijuana only.
Users who saw other states more quickly create large and robust cannabis markets have been disappointed. Many also have complained that prices in New Jersey are high.
The state Cannabis Regulatory Commission has received 2,177 applications for marijuana business licenses and has approved 1,399 applications. Most of those — 1,200 statewide — are conditional licenses that allow a startup to build out operations while working toward meeting the requirements for a regular cannabis license. About 100 of the regular annual licenses have been awarded, with 37 of them converted from conditional licenses. Another 400 applications are being processed.
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Before aspiring cannabis business owners can apply for state licensing, they must have municipal approval and a planned business location. Towns and cities have been flooded with requests, but some municipalities have become reluctant to allow more applications until they see how many already forwarded to the Cannabis Regulatory Commission are cleared and become operating businesses.
Even Atlantic City, which still intends to be the cannabis capital of the Jersey Shore, is starting to wonder whether to slow applications until it sees how many actually become businesses.
ATLANTIC CITY — As the Casino Reinvestment Development Authority approved more cannabis busi…
The city early on embraced letting the marketplace determine how much marijuana commerce is sustainable, which should result eventually in a stable, right-sized local industry. The city expects millions of dollars in cannabis investments in the coming years. Plans for its Green Zone include large-scale cultivation sites, retail locations and consumption lounges. The Casino Reinvestment Development Authority, as the planning and zoning authority for the city’s Tourism District, has approved more than a dozen applications for cannabis-related businesses.
As applications outran Cannabis Regulatory Commission approvals and business openings, city officials favored pausing the process — then restored it out of consideration for those in it.
The struggles of aspiring and existing cannabis companies crystalized in a report last month by the New Jersey Cannabis Trade Association, which blamed the cannabis commission’s slow licensing for stalling the industry after only nine months of legalization.
The report said licensing problems, the proliferation of unregulated other hemp products and the lack of state enforcement against illegal marijuana sales could be costing New Jersey as much as $1.8 million a year in tax revenue per location.
The group’s executive director, Todd Johnson, told the Philadelphia Inquirer, “We are making it difficult right at the point of entry for no reason.” The group is pushing to reduce the state’s cannabis bureaucracy.
A Stockton University poll in April found that 30% of cannabis users in the state bought it from non-licensed legacy dealers — in other words, illegally. The vast majority of such buyers said the lack of a legal source near them was the main reason, so the slow rolling of the cannabis commission seems to be favoring the black market.
When the New Jersey Cannabis Convention meets in Atlantic City on Sept. 8 and 9, however, it may want to consider another, less pleasing challenge. Of those polled, 18% said high prices at legal sellers had made them look elsewhere. The industry may also need price competition to make its dreams come true.
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