Notable Players

A Deeper Look At This State

Regulatory Framework

Adult-use legalization was passed in New Jersey in 2020 by the largest landslide in history, with 69% of voters in favor of cannabis.

In March of 2022, the state opened up adult-use retail license applications and received nearly 200 applications in one day. During a public meeting held on March 24th, the CRC hearing unanimously approved 68 conditional cultivation and manufacturing licenses. A meeting later held on May 24th, announced the approval of six additional adult-use cannabis retailers to join the existing 13 that were able to launch adult-use sales on April 21st.

The CRC also granted awave of conditional approvals to cannabis cultivators, manufacturers, and retailers. There were a total of 46 conditional license awardees: 22 class I cultivator applicants, 13 class II manufacturer applicants, and 11 retailer applicants.

Temporary restrictions have been put into place for recreational cannabis business operators, one being a ban on vertical integration for operators in effect until February of 2023.

Adult-use sales kicked off the day following the cannabis high holiday, and generated $24 million across 13 retail locations within the first month of legalization.

Notable Market Activity

February 2022 | IPR completes $35MM acquisition of 114 sqft facility

September 2021 | AYR Strategies acquires Garden State NJ for a $101MM

July 2020 | IIPR completes $35MM acquisition of Curaleaf’s 111K sq.ft. cultivation  

June 2020 | Acreage completes NJ medical acquisition for $10MM+ assumption of debt

May 2020 | AWH enters agreement to acquire Green Leaf Compassionate Center

What's the Play?

Existing vertically integrated operators within the state will find an abundance of availabe capital to expand cultivation and prepare well-located retail shops to satisfy the fifth most densely populated state's anticipated enormous demand. With Pennsylvania still not having a recreational cannabis market, and New York continuing to run into delays, prepare for the neighboring states to participate in the booming demand within the Garden State.

If you have the opportunity to invest in a New Jersey operation, you almost can't lose. Nearly a billion dollars of capital will ultimately be required in this desirable market. The play is with proven operators, who will provide the highest ROI in the near-term future. The challenge here will be in valuation and structuring.

For existing operators within the state, building out your license(s) is the name of the game. For license holders that are restricted temporarily from vertical integration, maximizing your license and seeking potential out-of-state strategic parternships is a step in the right direction for dominating the market.

Market Snapshot

This Data Point

58,380

This Data Point

58,380

This Data Point

58,380

This Data Point

58,380

This Data Point

58,380

This Data Point

58,380

This Data Point

58,380

This Data Point

594/273

By The Numbers

Population

~9.24MM

21+ Population

~6.03MM

Annual Tourists

~
116
MM

Medicinal Legalization

2010

Adult-Use Legalization

2020

First Adult-Use Sales

2022

MMJ Patients

~125K

Monthly Revenue

~$30MM

Cultivation Cap

150K Sq.Ft.*

Cultivation Licenses

23/No Limit (Operational/Limit)*

Retail Licenses

24/No Limit (Operational/Limit)*

Retail License Cap per Operator

3

Vertical Integration

Allowed

Delivery

Allowed

MMJ Qualifications

Restrictive

Adult Population/ # Retail Licenses

~250K

Accepts Out of State MMJ

Yes

MMJ Patients / # Retail Licenses

*There is a limit of 37 class 1 cultivators until February 22, 2023 *Five of the cultivation licenses are for stand-alone cultivations. *15 of the retail licenses are for stand-alone dispensaries. *Each of the existing 12 vertically integrated licenses are permitted to open three dispensaries. Multiple cultivation tiers: tier 1 allows up to 5K sq.ft., tier 2 allows from 5K sq.ft. to 20K sq.ft., tier 3 allows from 20K sq.ft. to 30K sq.ft. The maximum initial canopy for any of the awardees is 30K sq.ft. Vertically integrated applicants may choose any of the canopy tiers. *License winners moving forward that are restricted from vertical integration are based off tiers stated as below: 1. Microbusiness Cultivator: premises up to 2,500 square feet; 2. Tier I Cultivator: premises up to 10,000 square feet; 3. Tier II Cultivator: premises 10,000 square feet to 25,000 square feet; 4. Tier III Cultivator: premises 25,000 square feet to 50,000 square feet; 5. Tier IV Cultivator: premises 50,000 square feet to 75,000 square feet; 6. Tier V Cultivator: premises 75,000 square feet to 100,000 square feet; 7. Tier VI Cultivator: premises 100,000 square feet to 150,000 square feet; and 8. Expanded ATC Cultivator: premises up to 150,000 square feet. Cultivators will be required to cultivate in a secure facility or property and can grow indoors or outdoors, but outdoor cultivation will only be allowed when explicitly approved by a municipality.

Top Cultivators

Notable Market Activity

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Proprietary Sharp Capital Advisors data - compiled using various sources including state and local government data

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