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 a meeting held on March 24, 2022, CRC Executive Director Jeff Brown stated the existing eight alternate treatment centers (ATCs) are not "ready" for adult-use sales. The CRC claim the market will be undersupplied and they will visit operations over the next few months to see if they can accommodate both medical and adult-use sales. Brown also wants to ensure the hiring of individuals with prior marijuana arrests and/or those residing in impoverished neighborhoods. The next board hearing is slated for May 24, 2022, meaning NJ will go another two months sans adult-use sales revenue for operators and state and local tax revenue pools.

One bright spot from the March 24th CRC hearing was the approval of an additional 68 cultivation and manufacturing licenses.

Additionally, after years of wading through multiple lawsuits, the state issued 14 cultivation/manufacturing licenses and 30 medical dispensary licenses in 2021. These license holders need to operate in the medicinal market for 12 months prior to approval to operate in the adult-use market.

Earlier in March 2022, the state opened up adult-use retail license applications and received nearly 200 applications in one day.

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

Existing operators will find an abundance of available capital to expand cultivation and prepare well-located retail shops to satisfy the fifth most densely populated state's anticipated enormous demand. And one should not forget the Garden State borders the populous New York and Pennsylvania markets, neither of which enjoys adult-use.
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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 current New Jersey medical operators, "build it, and they will come" has never been a truer adage. The Garden State is truly lush and green for cannabis investors.

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