5 Predictions for the New Jersey Cannabis Market

Today is the day that many New Jersey residents have been waiting for - it's finally possible to purchase cannabis legally! 

It might not be 4/20, but maybe 4/21 could be a new kind of holiday for the Garden State. 

The road hasn't been easy. In 2017, when Phil Murphy was running for governor of New Jersey, one of his campaign promises was to bring legal adult-use cannabis to the Garden State within his first 100 days in office. The timeline wasn’t exactly accurate. But, on his 1,132nd day in office, he signed the Adult-Use Cannabis Bill into law after the November 2020 ballot measure passed with more than 67% of voter support. New Jersey officially became the fourteenth state to legalize recreational cannabis. 

As of today, residents across the state can purchase recreational cannabis from the existing medical dispensaries in the state. 

Even with such overwhelming public support, legislative progress was slow. For more than a year after the ballot measure, there was haggling at the Trenton Capital to ratify the state constitution and more haggling at the NJ Cannabis Regulatory Commission (NJCRC). 

But New Jersey has finally done it: the Garden State is open for business as of April 21, 2022. This decision doesn’t just open up access to legal recreational cannabis for six million adults in New Jersey. The legislation has implications for the entire East Coast cannabis market. 

Here’s what we think will happen over the next few years as East Coast cannabis sales start to boom like never before: 

1. Canna-Tourism.

As more dispensaries open in New Jersey, we’ll likely see an uptick in canna-tourism from neighboring states, especially as New York takes another year to start opening recreational dispensaries and other states like Pennsylvania, Delaware, and Maryland lag.
Overall, these trends are projected to help the New Jersey cannabis market reach a value of $1.5 billion by 2025.

2. Limited Licenses Mean Limited Locations. 

New Jersey market won’t suddenly greenlight every dispensary. With a careful eye on limited licensing, the New Jersey Cannabis Regulatory Commision (CRC) only gave licenses to thirty-seven additional cultivators in addition to the twelve that are already in operation. 

A total of 49 licensed operators for a total of six million adults in New Jersey would mean that each dispensary would be serving about 120,000 customers. And that’s assuming each licensed operator is open. Licenses are just the first step to selling recreational cannabis - the full process can take well over a year. 

The dispensaries that open in New Jersey are likely going to be very, very busy.

3. The Domino Effect. 

New Jersey is giving the clearest signal to the tri-state area that legal cannabis is here to stay. 

This region is the largest hub of the advertising and marketing world, which means it will only be a matter of time until larger agencies start to seriously consider representing cannabis clients and finally embrace the industry. With decades of experience in CPG, Spirits & Beverages, and Pharmaceuticals, larger ad agencies are well positioned to take consumer advertising and marketing to billion-dollar levels.

4. Social Equity Becomes the Baseline for Business. 

The foundation for the New Jersey cannabis industry was built with equity in mind from the start. With the new legislation, applications from social equity, diversely-owned businesses, and “impact zone” businesses will be prioritized, as well as businesses with 10 employees or less. The Cannabis Regulatory Commission (CRC) established a Social Equity Excise Fee that will tax cultivation and use the revenue for education, economic development, and social support. 

“We remain committed to social equity,” CRC Dianna Houenou said in a statement. “We promised to build this market on the pillars of social equity and safety. Ultimately, we hope to see businesses and a workforce that reflect the diversity of the state.”

In practice, this will mean that new opportunities will be made available with social equity applicants in mind, especially those in parts of the state that haven’t had the same economic opportunity as others, and workers and business owners with past cannabis-related offenses.  

The most exciting part of these initiatives is that the doors will be open like never before for people who were disproportionately impacted by cannabis in the first place. 

5. Medical Consumers Stay a Priority. 

Even as medical dispensaries open to recreational consumers, patients are going to remain the priority. The unique part about New Jersey is that the big opening day starts off with medical centers that will simply open to cannabis consumers. The balancing act will be making sure that supply and service goes to patients first. 

This is the top-level guidance from the state and we expect that there will be a lot of careful analysis over how much supply goes to patients and what kind of supply goes to consumers. 

Cannabis Consumption = Normalization 

Every new recreational cannabis market goes a long way to helping to normalize cannabis consumption in the country and change perceptions of consumers. It will be exciting to see how New Jersey starts to evolve into one of the biggest markets in the region. That said, 77% of New Jersey counties have opted out of cannabis businesses - leaving less than a quarter of the state to carry the demand for cannabis.  

The rollout may be a bit messy, with long lines and limited product assortment. But with more retail locations and the prioritization of spreading the opportunity equitably and fairly, the perception of the cannabis industry should continue to change and become more popular across the state. All in all, the Garden State is well-positioned to be a cannabis leader in both the Northeast US and nationally.