Politics
Top New Jersey Marijuana Regulator Says State Will Be ‘Premier Cannabis Market’ On East Coast As Industry Expands
New Jersey “can be and will be the premier cannabis market on the East Coast,” one of the state’s top marijuana regulator says as it marks new record sales and market expansion milestones.
New Jersey Cannabis Regulatory Commission (NJ-CRC) Executive Director Jeff Brown also told Marijuana Moment in an interview that he’s “rooting for” neighboring New York as that state navigates its own regulatory challenges and hopes that eventually “we’ll both be able to learn from each other.”
For now, however, New Jersey is focused on building upon its cannabis industry successes—including reaching $2 billion in marijuana sales as of last month and the opening of more than 100 retailers statewide.
The majority of those sales have come in the last two years since the state’s adult-use market launched. And Brown said he thinks the Garden State will “definitely achieve” another record this year, predicting that the state will see $1 billion in sales for 2024.
Regulators at the NJ-CRC, chaired by Dianna Houenou, have also stressed that they will not be letting the medical cannabis system fall by the wayside even as they work to support the burgeoning recreational market. To that end, the commission recently eliminated the cost of obtaining a medical cannabis card.
In January, NJ-CRC also approved final rules to allow marijuana consumption lounges in the state where people could buy and use cannabis products on-site. And as that’s rolled out, advocates are hoping lawmakers will take steps to authorize home cultivation—a policy that Brown has encouraged the legislature to consider.
Marijuana Moment spoke to Brown about the state’s latest cannabis accomplishments and the future of the marketplace last week. The following interview has been edited for length and clarity.
Marijuana Moment: You’ve mentioned that the “vast majority” of the $2 billion in cannabis sales that New Jersey has seen came from the adult-use market these past two years. To what do you attribute that exponential growth?
Jeff Brown: As you mentioned, here in New Jersey, we’ve hit a number of milestones recently. A couple of notable ones: We now have 106 dispensaries and retailers open across the state. That includes both medicinal and recreational dispensaries.
We had $800 million in combined medicinal and recreational sales in 2023 alone, and we’ve had more than $2 billion since we started first reforming the medicinal cannabis market and then expanding to adult-use cannabis sales since 2018.
At the beginning of 2018, we started to really reform medicinal cannabis after it had been really stagnant under the prior administration. And we saw sales start to increase and they really accelerated once we authorized recreational, or adult-use, sales in 2022. We’re projecting $1 billion in sales this year alone, 2024.
This year will be two years since we authorized legal sales in 2022. And as this market develops, we’re seeing more small businesses, independent businesses, get operational—retailers, cultivators and manufacturers. So the market is becoming more diverse and we’re starting to see this growing competitive market with more competitive prices as well.
MM: I know you’ve given entrepreneurs much of the credit for these sales milestones, but what role do you see regulators playing in maintaining that economic growth?
JB: Our role is to make sure a couple of things—and this goes back to our mission statement. Number one, we want to make sure this is a safe and responsibly regulated industry here in New Jersey, so we focus a lot on product safety.
And then secondly, we want to make sure that the process that we’ve set up to license new businesses and how we regulate businesses is equitable, and I think the strong growth since the CRC has been around is really attributed to what we’ve done in licensing. Our licensing system is unique in that it’s essentially rolling applications.
But we prioritize applicants based on whether or not they qualify as a social equity business, a diversely owned business or an impact zone business. So if you’re an entrepreneur with a past marijuana conviction, you could qualify as a social equity business and your application is going to get reviewed before anybody else. If you’re a diversely owned business—i.e. a minority-owned business, women-owned or disabled veteran, that’s the second highest priority. So while we’re doing rolling application review and approval, we’re really prioritizing those key groups—individuals, entrepreneurs, who’ve been negatively impacted by cannabis prohibition.
By doing that, we focused on getting entrepreneurs access to the market, but really prioritizing those key groups to make sure that people get a leg up in this industry as it develops.
MM: So would you say this unique licensing process is central to what’s allowed New Jersey to stand-up its adult-use market so quickly?
JB: Yeah, that’s part of it. We also have a dedicated team here that works with businesses to help them get off and get operational. Every time a license is awarded, they’re assigned to a compliance officer who helps them, reviews their standard operating procedures, inspects their facility. So I think also part of that has been us standing up this agency so that we could act effectively and see this industry developed.
But I think core is our licensing process and our investment in social equity on the front end here. A lot of credit goes to our Office of Diversity and Inclusion, our director there—Wesley McWhite—and his team have done a tremendous amount of work, with outreach, education and ongoing engagement with would-be social equity businesses, diversely owned businesses and people who want to get into this industry and succeed.
We’ve received over 2,500 applications. The vast majority of those have been for conditional licenses. And we’ve issued, I believe, we’re now at over 1,700 licenses. Most of those are conditional licenses, which is kind of the first step in the process. But then we’re now well over 400 annual operating licenses being awarded as well. That means there’s more than 400 businesses that have been given the go-ahead—that once they pass the final inspection, they can start operating.
While we saw retailers starting to open up first because it’s faster and easier to get to market as a retailer versus a cultivator or manufacturer. Now we’re starting to see those cultivators and manufacturers get operational and start serving this market. That’s increasing product diversity. It’s helping to lower prices and just provide a better experience for consumers.
MM: Can you talk about some of the ways that the tax revenue from these record cannabis sales are being utilized by the state?
JB: At the CRC, I think it’s important to note that we don’t determine where the tax revenue was spent. We do make recommendations. But I want to highlight two important programs that have been funded with cannabis tax revenue [under] the Economic Development Authority (NJEDA) for both social equity businesses and diversely owned businesses.
One is called Seed Equity, and one is called Joint Venture, and they’re geared at giving grants to conditional and annual license awardees, particularly social equity businesses and diversely owned businesses. They’re giving some of the largest grants in the country to help independent businesses get operational here in New Jersey with, again, that focus on social equity.
Then the other one, which is going to be operational very soon here is our Business Action Center, which provides free business assistance to any range of industries, anybody who wants to go into business in New Jersey and do anything whether you open a hair salon to a cannabis business. You can go to the Business Action Center and get advice, get help, get connected to resources from registering their business to figuring out what they need to do with the relevant licensure agency.
So they’re launching a technical assistance program specifically for cannabis businesses. They’ve recruited faculty from around the country who’ve been successful in this—who’ve been either successful consultants or successful business owners. And that will be launching very soon. It will be free. It will be focused on would-be entrepreneurs who qualify as impact zone businesses. Those are folks who either are from, want to operate a business in or want to employ people from impact zones, which are places that have been disproportionately impacted by cannabis prohibition.
MM: You no doubt are aware of the difficulties your neighboring state of New York has had in trying to achieve balancing equity-focused initiatives with providing adequate access. What lessons do you think New York can take from New Jersey to that end?
JB: I’ll say this: As a cannabis regulator, I’m cheering for all my colleagues in other states. And one of the interesting things we have going on right now in cannabis, because there is no federal framework that exists, you have a lot of experiments going on all over the country. Whether it be New York, Maryland is launched, Connecticut, Rhode Island—everybody’s doing it slightly different.
I think there are successes and challenges in every state, and we can all learn from each other. Honestly, I’m rooting for the folks in New York. I think they will be successful. And, you know, we chose different paths, but I think once once all is said and done, we’ll both be able to learn from each other.
MM: You’ve expressed openness at a recent legislative hearing to giving consumers a home grow option and encouraged the legislature to explore that possibility. Gov. Phil Murphy (D) has also been open to it but said the market needs to mature further. What’s your feeling on that?
JB: I don’t think our market has matured. I think it has a lot more potential to reach. The $1 billion mark, which we should hit this year in total cannabis sales is certainly another milestone that I think we’ll definitely achieve. But I firmly believe that New Jersey can be and will be the premier cannabis market on the East Coast—everything from being a safe and responsibly regulated market to offering really innovative and competitive products to consumers.
But on the question of home grow, I think I would just echo my comments in the hearing. I think it’s something that has now been tried in states and entire countries. Canada, for example, has home grow nationwide. So there certainly are lots of examples. There’s lots of places to look to to understand how it has worked.
And I was encouraging the members of the committee who were interested in to doing that to do their due diligence and to look at those places and see how things turned out. We don’t have authority to authorize or not authorize home grow. Certainly if it is and it falls under our jurisdiction, we’ll do what we need to do. But I think anybody looking at the issue, there’s lots of examples now to look at. I would just encourage our policymakers to do their due diligence.
MM: Can you bring me up to speed on the status of rulemaking to allow for consumption lounges?
JB: That’s a development that we’re going to see in the market here. Those rules were finalized. What I can tell you is the next steps on consumption areas are we’ll need to essentially adopt an update or an addendum to our notice of application acceptance, which we’ll explain to anybody who wants to apply for a consumption area how they do that, when they can start submitting applications. That will happen at a public board meeting.
I think that responsibly regulated and operated consumption areas absolutely have a place in New Jersey. We have a rich tourist economy. We have, I think, lots of municipalities that might want to look to these as as an option for their residents to go and enjoy cannabis together with their adult friends. So we’re excited to roll that out. I would just keep an eye on our meetings to see the next steps on that.
Photo courtesy of Philip Steffan.
