ATLANTIC CITY — Adults bought more than $800 million worth of legal weed in New Jersey last year, with more growth expected as the market nears the second anniversary of sales and the so-called weed holiday April 20.
There are now more than 120 dispensaries open in New Jersey, with an expectation that weed sales will exceed $1 billion in New Jersey this year.
Jeff Brown, executive director of the New Jersey Cannabis Regulatory Commission, said people are still applying for licenses in every category, although the numbers have slowed. Out of thousands of applications, the CRC has approved 1,396 conditional licenses as of its April meeting, with 327 conditional licenses having converted to annual licenses.
Brown expects the rapid growth to continue this year. As demand eases, the commission may slow down on approvals, although he said there’s no way to know when that may happen.
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“I know for sure that we’re not close yet,” he said this week. “The market has not reached its full potential.”
The hours-long waits outside a handful of dispensaries that greeted consumers after sales began on April 21, 2022, are a thing of the past, and cannabis consumers now have more choices of where to shop and what to buy.
In Atlantic City, four dispensaries are open for the recreational market, along with one that serves only those with medical marijuana cards, and dozens more are in the planning stages.
In the city and statewide, a sense of confidence remains that the market will continue to grow, well, like a weed, but there is also a recognition that the public’s appetite for cannabis has limits.
A referendum petition with almost 1,100 residents' signatures opposing the expansion of the cannabis "green zone" to Albany Avenue has been submitted to the city clerk, according to a Wednesday news release from City Councilman Jesse Kurtz.
Kashawn “Kash” McKinley, Atlantic City’s director of constituent services who is leading the city’s effort to become the cannabis capital of the East Coast, said the city’s Cannabis Commission will look at potential limits to the number of weed businesses in the city.
Previously, McKinley has advocated for leaving it up to the marketplace to determine how many businesses fit in the city’s 48 blocks. Currently, about 25 have local approvals and are working toward the state licenses to open.
In a recent interview, joined by Atlantic City Cannabis Commission member Zach Katzen, McKinley said the commission will have a recommendation this spring for a cap on the total number of cannabis businesses.
“We do not want to oversaturate, and we do not want to set our businesses up to fail,” McKinley said. He did not say where that cap would fall.
“We do have a number in mind. It is not 25,” he said.
The city recently welcomed its latest dispensary, SunnyTien at 3004 Atlantic Ave., a little more than a block from Legal Distribution at 3112 Atlantic Ave. SunnyTien is the city’s first dispensary owned by Asian women, with the website touting a staff that speaks English, Spanish, Cantonese and Mandarin.
The city’s cannabis scene reflects the diversity of the city itself, and the city’s and state’s efforts to ensure the economic benefits of cannabis businesses would include the communities most impacted by cannabis enforcement in the past, Katzen said.
For consumers, the growing market means more convenience and eventually will mean a reduction in cost.
A group of Atlantic City residents asked the Casino Reinvestment Development Authority to just say no to expanding the city’s weed-friendly green zone.
Costly cannabis
New Jersey consumers have complained loudly about the cost of cannabis compared to the listed prices in other states.
“Competition brings two things: Better quality and lower prices. Every time,” said Scott Rudder, founder of the New Jersey CannaBusiness Association. He recently opened his own dispensary in Riverside, Burlington County.
As weed continues its long move into the mainstream, Rudder and others see more choices for consumers and cheaper options, with a growing number of manufacturers and cultivators opening.
A recent change in state rules allows new options for infusions, including infused brownies and beverages.
The process for state approvals may have moved more slowly than some in the industry wanted, but Rudder remains optimistic. As more dispensaries open, however, it will no longer be enough just to have weed for sale.
“Just like any other store, you’re going to have to compete for customers,” he said. Because it remains illegal at the federal level, cannabis products cannot legally cross state lines, meaning Jersey cannabis must be grown in state.
Still, there are several multistate operators in business in New Jersey. Rudder expects consumers to favor the smaller mom-and-pop shops with ties to the community and craft-level cannabis brands that can build a niche similar to that of the local brewery or winery.
As the industry’s trajectory starts to level, funding can also be an issue. Weed’s federal status makes finance options open to other start-ups unavailable, and Rudder said big investors are getting harder to find.
Atlantic City native and Army veteran Ed Wilson says he is opening the city and state's first 100% Black-owned, veteran-owned cannabis dispensary, Bakin' Bad, on April 20.
It’s a big expense to get open, and all involved say not every business will make it through the process or remain in operation for long. Rudder said he built his financing with several small investors, but any cannabis entrepreneur will need to be ready for a significant cash outlay, to secure a location, to make it through the regulatory process, to buy products and prepare security and hire staff.
“I don’t think anybody’s opening the door for under $1 million unless they get very lucky,” he said.
McKinley believes an eventual federal legalization can only help Atlantic City’s cannabis market, and New Jersey’s. A recent cannabis business convention in the city saw participants from around the country interested in New Jersey’s growing market, he said.
In 2020, New Jersey voters supported legalization by a wide margin, but the support was not universal, and opposition remains, as seen in neighborhood efforts to block or roll back cannabis zoning in Atlantic City.
Throughout the region, opponents have cited concerns with intoxicated driving, a dangerous impact on youth and the pungent aroma in asking to keep weed businesses out of neighborhoods and communities.
Advocates expect some of those concerns to ease as the culture changes, and more people see an after work edible or a puff or two as little different from alcohol.
Those interviewed said New Jersey’s cannabis industry is just getting started. As sales climb into the billions, it will mean new tax revenue and new jobs. But the growth will not continue exponentially, and it would be poor planning to expect it to.
“It will still be pretty modest in New Jersey,” Rudder said. “We’ll certainly have less dispensaries than we have liquors stores.”
A West Cape May cannabis shop plans to observe 420, or April 20, stating that it will be the first legal event celebrating weed in Cape May County.
As New Jersey marks another post-prohibition April 20, experts expect more growth on the way.
Katzen said Atlantic City has put itself in a good position to take advantage of that growth in the coming years.
“We’re bringing in businesses to be community partners, not just to come in and open up shop. They’re looking at ways where they can come in and be part of the community in a positive way,” he said.
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