New Jersey’s recreational cannabis program has smooth launch despite supply worries

By Published On: April 29, 2022Categories: News

New Jersey’s recreational cannabis market has gotten off to a relatively smooth start, with no major bottlenecks despite long lines reflecting pent-up demand from local residents as well as customers coming over from neighboring New York and Pennsylvania.

State regulators reported few initial glitches after sales began last Thursday – although some recreational customers were frustrated by prolonged waits in lines dozens of people long.

Also, one of the 13 stores approved by regulators delayed its opening.

The store, owned by Massachusetts-based Curaleaf Holdings in Edgewater Park, northeast of Philadelphia, attributed the delay to undisclosed details that needed to be resolved with the municipality.

New Jersey is the first East Coast recreational market to open in 18 months, following Maine in October 2020.

Supply issues were top of mind ahead of Thursday’s launch, given concerns over whether operators could serve the state’s 120,000 medical cannabis patients without disrupting recreational supplies.

New Jersey’s Cannabis Regulatory Commission noted in a news release that no patient-access issues or shortages were reported on Day One and only a “few minor complaints” were investigated.

Despite the relatively smooth launch, supply concerns haven’t vanished.

Rather, a number of questions remain for a market that the 2022 MJBiz Factbook projects will generate $625 million-$775 million in sales this year, growing to $2 billion-$2.4 billion a year by 2026.

The questions include:

  • Will supplies hold up for residents, customers from neighboring states and tourists? New Jersey drew 116 million tourists in 2019, before the pandemic.
  • What will happen to the state’s grand experiment to license a large number of social equity and microbusinesses? Will those businesses get the capital they need to build their businesses and succeed in a market currently dominated by multistate operators?
  • How will New Jersey’s recreational marijuana sales fare once its rival neighbor New York launches its adult-use market later this year or in early 2023?

“Over-demand and undersupply is the biggest initial risk to New Jersey,” said Joshua Horn, co-chair of the cannabis law practice of Fox Rothschild. “I do see foresee supply-chain issues in the short run.”

Horn noted that the New Jersey medical program – with only a dozen licensed operators – remains “kind of in a catch-up mode. There’s a concern that if the medical program is not operating at 100% capacity and now you have adult-use, what’s going to happen?

“When things settle down (from the initial flurry of sales), that’s when we’ll see the viability of the program.”

Initial excitement

Ed DeVeaux, president of the New Jersey CannaBusiness Association, was the second to purchase recreational marijuana at Acreage Holdings’ The Botanist retail store in Williamstown, 40 minutes southeast of Philadelphia.

“It’s just an exciting time,” he told MJBizDaily.

DeVeaux said he had mixed emotions about customer cars taking a lane of the highway, but it reflected the strong demand.

“You had drivers from New York and Pennsylvania,” he added. “So guess what? We (New Jersey) beat you.”

DeVeaux said he thought the state’s Cannabis Regulatory Commission (CRC) fulfilled its obligation to ensure the seven marijuana companies approved for the launch were capable of handling the business while ensuring that MMJ patients were the priority.

Bill Caruso, a cannabis law attorney with Archer in New Jersey who helped write the state’s first medical marijuana legislation, agreed.

Caruso noted that the first day “went off basically without a hitch, with patient priorities being paramount.”

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