By Steve Gelsi
New Jersey may be known as the Garden State, but its adult use cannabis market continues to take longer than expected to sprout.
Lawmakers originally set a Feb. 22, 2022 deadline for adult-use sales when Gov. Phil Murphy signed three bills to legalize marijuana in early 2021. The laws to establish a regulatory body for cannabis came after New Jersey residents voted 67% in favor of allowing adult-use sales in the state in November, 2020.
At last check, legal adult-use sales remain in the planning stages, much to the chagrin of advocates such as state Sen. Nicholas Scutari, a Democrat, who called the delays “totally unacceptable” in a statement this week.
Scutari, who is president of the state Senate, said he plans to form an oversight committee with members of the state Assembly to hold hearings on why adult-use cannabis has taken so long.
Despite the sluggish launch, the prospects for the legal cannabis industry remain bullish for the long-term.
“To be fair, it’s very complicated to roll out an adult-use cannabis program,” said Leonard Tannenbaum, CEO of AFC Gamma Inc. /zigman2/quotes/224519084/composite AFCG +1.14% , a debt provider for cannabis companies that’s licensed to operate in New Jersey.
Tannenbaum said the timeline remains “elongated” but regulators want to make sure the supply of cannabis is sufficient for adult-use and medical customers.
“You’ll have a very strong market in New Jersey when it opens for at least 12 months if not longer from people crossing the border from New York and other states,” he said.
New York is not expected to start adult-use sales before 2023.
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Meanwhile, New Jersey’s Cannabis Regulatory Commission on March 24 voted to table a decision to allow eight medical cannabis dispensaries to start selling adult-use cannabis. The measure would have allowed the dispensaries to start selling recreational marijuana by the end of April.
The Cannabis Regulatory Commission said it planned to visit the medical cannabis facilities, also known as alternative treatments centers (ATC) to check whether they hold enough inventory.
The applicants for the medical cannabis/adult use licenses include some of the U.S.’s larger multistate cannabis operators including Acreage Holdings /zigman2/quotes/221335077/composite ACRHF -4.41% , Ascent Wellness Holdings Inc. /zigman2/quotes/226701495/composite AAWH 0.00% , Columbia Care Inc. /zigman2/quotes/212177085/composite CCHWF -5.57% , Curaleaf /zigman2/quotes/205334348/composite CURLF -2.65% , Green Thumb Industries /zigman2/quotes/200716694/composite GTBIF +1.13% , Verano Holdings Corp. /zigman2/quotes/224743992/composite VRNOF -3.00% and TerrAscend Corp. /zigman2/quotes/209651870/composite TRSSF -6.12% .
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In a separate measure, the Cannabis Regulatory Commission approved 68 conditional license applications, including 18 for manufacturing and 60 for cultivation. Thirty-seven of the applicants are minorities, including 33 African Americans, nine Latin Americans and four Asians.
The commission has scheduled another meeting for April 11.
The AdvisorShares Pure US Cannabis ETF /zigman2/quotes/220307682/composite MSOS -2.36% has fallen 18% in the year to date, while the Cannabis ETF /zigman2/quotes/213173823/composite THCX -2.69% has fallen 9%. The S&P 500 /zigman2/quotes/210599714/realtime SPX +1.30% has lost 5%.
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