Red tape, illicit market competition, and a lack of enforcement by regulators have all created a “doom loop” for licensed cannabis companies in New Jersey, one of the state’s leading trade organizations claimed in a recent report.
According to the New Jersey Cannabis Trade Association, the state has been too slow to act on processing new business permits and dragged its feet on combatting the illicit market, The Philadelphia Inquirer reported, which has the trade group warning that business conditions need to improve if legal operators are to succeed long-term.
The NJCTA pointed the finger at the state’s Cannabis Regulatory Commission, which it said has thus far allowed just 37 recreational marijuana shops – up from 12 in early 2022 – and 13 that sell medical cannabis.
By the end of 2022, nine months after the launch of adult-use sales, New Jersey reported $20.1 million in new tax revenue, well below other state markets, according to the report. New Mexico, for example, with a population of just 2.1 million and sales that started at the same time, managed to surpass New Jersey’s revenue, bringing in $36.6 million during the same time period.
The CRC countered the claims, telling the Inquirer it has received 2,177 applications for marijuana businesses since late 2021, including 1,399 that have been approved and roughly 400 that are still being processed.
The NJCTA also noted that legal marijuana stores have found themselves competing against gas stations and convenience stores that sell delta-8 THC products derived from hemp that can provide consumers with a high just like marijuana, the report asserted. Licensed marijuana companies are prohibited from manufacturing similar goods.
“Not only are we fighting against the illicit market with our hands tied behind our back because of regulation, but when you can’t even offer the same products, then there’s no choice for [customers] to patronize your stores,” Todd Johnson, the executive director of the NJCTA, told the Inquirer.
But CRC Executive Director Jeff Brown told the newspaper that the New Jersey cannabis industry is “poised for long-term success,” and predicted that sales will pass the $1 billion mark sometime in 2024. Brown said lawmakers are debating new regulations to target hemp-based products.
“Progress is being made,” Brown said. (Full Story)