While the media decries a lost industry, those in the know are excited about what lies ahead for New Jersey’s cannabis industry – as state and municipal cannabis regulations continue to come into form, 2023 is set to be an explosive year.
Jeff Brown, the Executive Director of New Jersey’s Cannabis Regulatory Commission (the “CRC”), and Dianna Houenou, Chairwoman of the CRC, recently sat down to discuss some interesting and approaching changes to the state’s regulatory makeup. While there are several restrictions on cannabis operators and applicants that are set to expire this year, as well as various amendments to be made, one of these changes is primed to change the entire landscape of the industry in New Jersey – the restriction period on the state’s cap on cultivation licenses (previously set at 37) just expired this past February, 2023.
While there are no established ultimate limits on the number of cannabis business licenses, by statute, the limit on Class 1 Cultivation Licenses in New Jersey has been set at 37 since early 2021. That just changed on February 22nd of this year. Undoubtedly connected, to date, consumers and operators alike have been very public about their frustration over NJ’s high market prices. In practice, however, initially high prices are part of the rollout – it’s a necessary evil that’s required to build a functional market from top to bottom. The state intentionally granted cultivation licenses well ahead of dispensary licenses with a clear intention – first create the product, then build out the infrastructure, then build out the dispensaries, then, finally, sell to the customer. As a result, inventory is relatively low compared with the demand which is reflected in the price of the consumer product. However, we have finally reached the tipping point in the statutorily created timeline and the time is now for the State to circle back to the beginning of the process – expansion of cultivators. Per Jeff Brown, “37 cultivators is not a sufficient number to serve the state’s population … [After the cap expires] you should see some things related to that coming out of the CRC early in the new year. Our goal remains to be a competitive but equitable market, where you have access for entrepreneurs who want to get into the industry.”
While somewhat unclear as to what exactly expect from CRC this year, it’s clear that New Jersey remains committed to creating an all-inclusive market that is set up to serve both large MSOS as well as the startup entrepreneur. To date, only 17 such cultivation licenses have been granted, and therefore there is still a long way to go. However, those who missed out on the early application rounds should see this as a positive – the process is ongoing, there is much more opportunity to be had, and the next phase just began.