New Jersey’s Cannabis Market Flourishes with Record Sales and Evolving Equity Initiatives

LOS ANGELES- New Jersey’s state cannabis market is witnessing a significant uptrend, both in sales and regulatory progress, as it matures into a robust industry. According to the latest report from the state’s Cannabis Regulatory Commission (CRC), licensed cannabis dispensaries in New Jersey achieved a record-breaking $206.2 million in sales for the quarter ending September 30, 2023. This impressive figure suggests an annual sales rate of approximately $825 million, positioning New Jersey as the 12th largest retail market in the United States among its adult-use counterparts this year.

Jeff Brown, the CRC Executive Director, shared these milestones at the commission’s regular meeting on December 7. He highlighted a historic achievement with legal cannabis sales in New Jersey surpassing $200 million in the third quarter of 2023. This included nearly $177 million from adult-use sales and close to $30 million from medicinal sales.

The adult-use cannabis sales, which began on April 21, 2022, accounted for almost 86% of the total sales in the third quarter of 2023. This surge in adult-use sales corresponds with a decline in the medical market, as consumers increasingly shift towards the adult-use market. Compared to the third quarter of 2022, the state’s $29.2 million in medical sales from Q3 2023 represents a 52% decrease. Additionally, there has been a significant drop in the number of medical cannabis patients, from over 120,000 in September 2022 to 93,924 as of December 6, 2023.

October 2023 saw adult-use sales peak at $59.8 million, a 25% increase from $47.8 million in January. Concurrently, the average price of flower at adult-use retail outlets decreased to around $354 per ounce, a 10.5% reduction from January’s average of $396 per ounce. Flower sales constituted approximately 42% of the state’s adult-use cannabis sales in 2023, followed by vape carts (29%), edibles (14%), and prerolls (9%).

Brown pointed out that the decrease in prices is encouraging more consumers to transition to the licensed market. Despite a 27% increase in total sales revenue from January to October, the total grams of product sold surged by 40%, indicating a growing market beyond just revenue figures.

The state’s Social Equity Excise Fee (SEEF), levied at $1.52 per ounce of cannabis sold by cultivators, is a critical component of New Jersey’s cannabis market, with the majority of this tax revenue being reinvested into the state’s impact zones. These zones are identified based on historical concentrations of law enforcement activity, unemployment, and poverty related to past cannabis prohibition policies.

CRC board member Charles Barker inquired about the number of dispensaries opened by Black, Indigenous, or Hispanic majority-owned businesses since March 2023. This question underscores the ongoing efforts to ensure equitable participation in the cannabis market. As of early December, New Jersey boasts 64 licensed dispensaries for adult-use, including 36 dual-purpose facilities and 28 adult-use only outlets, in addition to 12 medical-only stores.

Despite CRC’s focus on awarding licenses to social equity operators and residents of impact zones, operational challenges remain for new entrants. As of November 28, 2023, out of 2,357 cannabis license applications, 1,649 have been approved, primarily for dispensary operations. A report in September indicated that 68% of the annual licenses awarded were to diversely owned businesses.

New Jersey’s cannabis market is not only expanding in terms of sales and licensing but is also making significant strides in addressing social equity and inclusion within the industry. The state’s approach reflects a growing recognition of the need for equitable market participation and reinvestment in communities most affected by historical cannabis policies.