Despite the continued progress of the statewide market over nearly three years, New Jersey is still one of the most recent states to usher in a new era of legal adult-use cannabis. Governor Phil Murphy ushered in the historic change on February 22, 2021, when he signed three bills related to cannabis legalization, effectively ending the three-year campaign to regulate and tax cannabis and beginning anew with the now-flourishing legal market.
The legal market is still young, with dispensaries in the state only launching sales back in April 2022, and the cannabis industry as a whole moves quickly. And when it comes to the Garden State, that sentiment surely holds true.
New Jersey State Law
As with other states that have introduced cannabis reform, New Jersey law allows residents and visitors over the age of 21 to purchase cannabis. Dispensaries are allowed to sell up to the equivalent of 28.35 grams, or one ounce of usable cannabis — 28.35 grams of dried flower, or four grams of solid concentrates, resin, liquid concentrate, and oils or 1,000 milligrams of ingestible cannabis-infused products. Consumers may buy a combination of products, so long as the equivalency does not exceed the limit.
In addition to sales tax, cannabis cultivators are required to charge a Social Equity Excise Fee for the sale or transfer of recreational cannabis, based on the state’s average retail price of consumable cannabis, which may change each year. Municipalities in New Jersey can also charge a transfer tax of up to 2% on the sale of recreational cannabis and similar products, and they are also allowed to charge a user tax on top of the transfer tax. State law deems that at least 70% of all tax revenue, including funds from the social equity excise fee, must go toward investment in “impact zones,” or towns with higher than average unemployment rates, crime indexes, and cannabis arrests.
Sales and Market Growth
According to data from the New Jersey Cannabis Regulatory Commission, the state has awarded 1,259 conditional licenses, 187 conversion licenses, and 122 annual licenses as of September 8, 2023. As of June 2023, New Jersey had 29 recreational cannabis dispensaries open in the state, according to the New Jersey League of Municipalities; 28 had expanded medical cannabis businesses into the recreational marketplace, alongside one recreational-only retailer. In 2022, the state totaled $555 million in medical ($226 million) and recreational sales ($329 million). For the first two quarters of 2023, spanning January through June 2023, recreational sales hit just above $305 million while medical sales hit approximately $67.3 million.
Given these trends, it seems that New Jersey is following a similar pattern as other states — a steady increase in the recreational market, boosting the overall numbers, while medical sales are gradually declining.
Cannabis Community Taking Shape
With the amount of current pending licenses, it seems that the state’s list of open dispensaries should only continue to grow in the coming years. The market is also attracting some big names, including Wu-Tang Clan rapper Raekwon’s cannabis dispensary and lounge, Hashtoria, which already has three locations in Oregon — Springfield, Portland, and Astoria. It also appears that leaders want to maintain the focus of social equity, as the state awarded $12 million in grant money to 48 licensed cannabis operators as part of the state’s efforts to remove barriers to the legal industry, namely among communities disproportionately affected by the War on Drugs.
The state also recently launched a safe-use cannabis campaign, aimed to equip the public with information and resources to make informed choices on cannabis consumption, according to New Jersey’s Cannabis Regulatory Commission. The messages — which will focus on topics like safe edible storage, preventing impaired driving, taking advantage of delivery services, and more — will be shared through more than 100 digital billboards placed beside state highways, along with bilingual ads posted in local community hubs and on social media.