Medical marijuana companies in New Jersey have been clamoring for months for permission from regulators to sell recreational weed to adults. A year ago, Gov. Phil Murphy signed a law that allowed such a regulated cannabis industry to operate in the state.
The companies say they are ready and have been pressuring the fledgling New Jersey Cannabis Regulatory Commission through the media since late October to let them get started. They say they’ve boosted inventories and added hundreds of staff in anticipation of recreational sales starting by the law’s one-year anniversary on Tuesday.
But that doesn’t mean the firms have met the requirements under the law — the Cannabis Regulatory, Enforcement Assistance, and Marketplace Modernization Act — and the initial regulations that the commission issued in August. Key requirements are local permissions and adequate supply for the medical market.
“There’s an effort to pressure us to move forward in a way that’s not compliant with the law, and that’s just simply not going to happen,” said Jeff Brown, the cannabis commission’s executive director, during the commission’s Jan. 27 meeting, clearly annoyed and frustrated.
The tension reflects the drive of investors behind companies with locations in multiple states trying to build momentum and capture market share in the 18 states — including nearby New York and Connecticut — that have legalized cannabis for adults, with more expected. The market is moving fast, but it also takes patience because every state is different.
New Jersey’s cannabis market is expected to be worth $2 billion in five years.
Brown said none of the eight companies that asked for permission to start selling recreational cannabis had provided all the required information. As of Feb. 15, the status of those applications had not changed. The next commission meeting is Thursday, when an update is expected.
The commission started accepting recreational applications for cannabis cultivators, manufacturers, and testing labs in December and has received more than 300, mostly for cultivation.
The industry also insists that the law gave the commission a Feb. 22, 2022, deadline to start recreational sales.
But that deadline is squishy at best because of other conditions in the law that are out of the commission’s control and have to be met. They make a deadline unenforceable. The legislature could step in but has shown no signs of doing so, observers said.
New Jersey’s cannabis companies have expressed a wide range of expectations for when recreational sales will start.
Curaleaf Holdings Inc., which has three medical cannabis stores near Philadelphia, expected sales to start as early as last November. New York-based Columbia Care Inc., which has stores in Deptford and Vineland, predicted in November that recreational sales would start no sooner than April. Another firm said maybe this summer.
The law says alternative treatment centers — the state’s official term for medical marijuana stores — must meet three conditions to start selling to any adult: they have to get written municipal approval to be in the recreational cannabis business, prove they have enough supply to serve patients without disruption, and demonstrate the capacity in their stores to handle an influx of new customers.
Eight of the 10 companies now selling medical cannabis have submitted requests to expand into recreation sales, Brown said. A frequent problem with the submissions is the lack of municipal approval in the form of a resolution approving a specific location, Brown added.
One industry view is that a municipality passing an ordinance that allows recreational cannabis should be enough.
One of the reasons companies didn’t submit the approvals before that Jan. 27 meeting is that the towns hadn’t granted them yet.
That was the case with Curaleaf, which has dispensaries in Bellmawr, Bordentown, and Edgewater Park along with cultivation facilities in Bellmawr and Winslow Township. The $35 million Winslow Township facility had its first harvest last May, tripling the Wakefield, Mass., company’s growing capacity in New Jersey.
Bellmawr on Jan. 27 gave its blessing for Curaleaf to start selling recreational cannabis there when it gets regulatory approval. Winslow Township on Feb. 8 passed a resolution that would allow cannabis grown there to be sold for recreational consumers.
Edgewater Park had not passed a resolution as of last week, according to Curaleaf. Bordentown hasn’t even passed an ordinance that would allow recreational cannabis within its borders, the first step in the process.
Some companies are further along with municipal approvals. Ontario-based TerrAscend Corp. runs Apothecarium stores in Maplewood and Phillipsburg, as well as a cultivation facility in Boonton, in North Jersey. The municipalities have passed resolutions for all of its locations, including a store in Lodi that is expected to open soon. All but one of the resolutions was passed after Dec. 30.
Jason Wild, TerrAscend’s executive chairman, said the wait is exasperating. ”We’ve spent so much money, we’ve been working our butts off for however many years since we won the license, and we wouldn’t have imagined in a million years that it would be almost the middle of January and we still wouldn’t know when the program is going to start.”
Most of the other large medical marijuana firms with operations in New Jersey declined to provide information on their municipal approvals or didn’t respond to a request for information.
Curaleaf and TerrAscend said last month they had more than enough cannabis in their warehouses to supply both medical and recreational consumers.
But that’s not all the commission is looking for when it demands adequate supply, which is not defined by the law or the regulations, leaving it up to the commission to make a judgment call.
The August regulations say the commission won’t approve the expansion of a medical cannabis retailer into recreational products until it is convinced that statewide supplies and access are sufficient for patients.
That’s a tougher hurdle for an industry now made up of just 23 stores where patients can buy medical marijuana. By comparison, Pennsylvania had 138 stores at the last official count in the fall.
That works out to an average of 2,784 patients per store in Pennsylvania, compared with 5,299 in New Jersey. Brown said in December it would be better to have around 2,000 patients per store. To help bring down New Jersey’s ratio, the commission in December approved 30 additional medical cannabis retailers.
The commission is not alone in its worry about the impact of recreational cannabis on patients.
“If ATCs can barely serve and manage existing patient demand, I’m not sure how they can handle the adult-use market,” Chirali Patel, a New Jersey cannabis lawyer and entrepreneur, said during the commission’s Jan. 7 meeting. “I just want to make sure we set it up the right way even if it takes time because the medical market will crumble under adult-use if we don’t keep it viable.”