New Jerseyans spent $24 million on weed during the first month of recreational sales, roughly $5 million a week after a record-breaking first day when $2 million worth of cannabis was purchased.
Cantor Fitzgerald’s analyst Pablo Zuanic said in his recent note that New Jersey saw a “slow rec start” as its first month of sales equaled $31 per capita spent, compared to $126 in New Mexico.
The Land of Enchantment kicked off sales a year after Gov. Michelle Lujan Grisham signed the Cannabis Regulation Act in April 2021, legalizing adult-use cannabis. In the first month, New Mexicans bought $22.1 million worth of cannabis.
The Market Will Grow Despite Slow Start
Still, the analyst said that New Jersey's recreational market will grow “as supplies increase and more stores open.”
Jeff Brown, executive director of the state’s Cannabis Regulatory Commission agrees.
On Tuesday, the regulatory body approved five additional permits for medical-only dispensaries to sell adult-use cannabis.
Brown called the move “only a beginning,” adding that “there’s a lot of growth left in this market.”
The adult-use market in the Garden State kicked off on April 21, after the Cannabis Regulatory Commission gave the green light to sell adult-use cannabis to seven alternative treatment centers, which are multi-state operators.
The new retail shops include Garden State Dispensaries in Woodbridge, Union, and Eatontown, The Apothecarium in Lodi and Ascend Wellness in Montclair. They're joining the other 12 dispensaries that kicked off sales last month. The 13th location did not get final approval until two weeks ago.
Zuanic said that he estimates roughly 20 shops will sell recreational cannabis by the year-end, projecting between $20 million and 25 million in sales per store.
“The ‘three As’ - affordability, access, assortment - drive market size and growth,” Zuanic said.
Federal Marijuana Reform: The Main Catalyst
But, federal marijuana reform remains the main catalyst for the cannabis MSO group.
The analyst called SAFE Banking Act the “only realistic option this year." However he questions whether passing the bill will be “enough for 'uplisting' MSOs to the U.S. exchanges.”
About a quarter of voting members of the U.S. House recently joined forces in urging congressional leaders to enact marijuana banking provisions into law as part of the large-scale manufacturing bill - America COMPETES Act.
A group of 24 senators from both sides of the aisle have lined up behind an idea that the bipartisan Secure and Fair Enforcement (SAFE) Banking Act would "help cannabis-related businesses, support innovation, create jobs, and strengthen public safety in our communities."
So far, the SAFE Banking Act, introduced by Rep. Ed Perlmutter (D-Colo.), has managed to pass the U.S. House six times in the last three years. The bill, which Rep. Perlmutter attached as an amendment to the America COMPETES Act earlier this year, still needs to pass in the Senate.
Photo: Courtesy of Jason Briscoe on Unsplash
