By Nina Zdinjak
In the November 2020 elections, some 67% of New Jersey’s adults voted in favor of cannabis legalization.
The new cannabis law, signed by Governor Phil Murphy in February, had a deadline of Aug. 21 for the New Jersey Cannabis Regulatory Commission to create its rules and regulations. The commission complied.
However, out of the state’s 565 municipalities, some 32 cities and towns have chosen not to allow the creation of recreational cannabis programs in their towns, although they have the right to change their decisions in the future and jump back in.
Cantor Fitzgerald analyst Pablo Zuanic shared his notes from the last week’s New Jersey cannabis conference in his Sunday analyst note.
MSO Incumbents In Advance If The Program Starts On Time “Multi-state operator incumbents in New Jersey should have a great head start if recreational sales begin on time by the February 2022 deadline,” said the analyst who noted that incumbents are vertically integrated medical operators, who will be grandfathered into the adult-use cannabis program.
According to Zuanic, these incumbents will obtain a notable advance over both the 24 new Alternative Treatment Center licenses and the new applicants.
Currently, there are 12 licensees that will be grandfathered into the program, of which only two are not completely operational: Justice Grown, iAnthus Holdings. The rest include two private companies — Breakwater and Harmony — and eight multi-state operators — Acreage Holdings, Ascend, Wellness Holdings, Ayr Wellness, Columbia Care, Curaleaf, Green Thumb, TerrAscend and Verano Holdings.
At the moment there are 22 stores opened in New Jersey, but Zuanic said he believes all ten active operators will have three stores by the time the new program begins.
Zuanic further offered a possible scenario in which the start of recreation cannabis sales in New Jersey will be delayed by litigation, with the state’s Cannabis Regulatory Commission (CRC) having to estimate incumbents’ capacities to meet the demands of both medical patients and future recreational consumers. Another reason for the delay could come from the townships, which remain in opt-out status by the deadline.
“What happens in New Jersey will/could spur the start of recreational sales in neighboring states that have already legalized rec (Connecticut, New York, Virginia), or that may in the future (Pennsylvania, Maryland),” pointed out Zuanic, adding it could also impact the rule drafting depending on how the CRC’s plans workout.
“We continue to think NJ rec sales will be oﬀ to a slow start if we go by one of the required ‘three As’ (accessibility, assortment and aﬀordability), with the number of approved stores at the beginning maybe only in the teens,” Zuanic concluded.