Adult-use legalization by ballot initiative in 2020 was passed in New Jersey by the largest landslide in history, with 69% of voters in favor of cannabis. Governor Phil Murphy recently announced that state's new cannabis commission is moving forward with public meetings to roll out the program.
Since legalization, nearly 65% of New Jersey municipalities have opted out of allowing recreational marijuana businesses within their borders, though it’s possible some will reconsider now that the state Cannabis Regulatory Commission has approved rules for the new industry.
State legislative committees have begun crafting regulations, including plans to award an additional 24 retail licenses. There are 12 vertically-integrated MMJ operators today, each allows three retail dispensaries. A recently enacted law eliminates the prior requirement for vertical integration.
In late 2019, some 150 entities saw a review of applications paused due to a lawsuit. But a court ruled earlier this year that the commission could resume its evaluation and award the remaining licenses.
In September 2021, the garden state commission announced adult-use license applications for growers, producers and testing laboratories will open December 15, 2021. Adult-use license applications for retailers will open March 15, 2022, and applications will be accepted on a rolling basis.
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 both New York and Pennsylvania, neither of which has legalized adult-use.
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 truly is lush and green.
*Five of the cultivation licenses are for stand-alone cultivations. *15 of the retail licenses are for stand-alone dispensaries. *Each of the 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.