Expansions in New Jersey
Some of the top producers and retailers in the country are ramping up their operations in New Jersey in anticipation of the state’s adult-use market.
Connecticut joins adult-use legal states
Connecticut in June became the latest state to legalize adult-use marijuana when Governor Ned Lamont signed Senate Bill 1201, making it the fourth state this year to legalize through the legislative process instead of voter initiative.
The new law automatically expunges most cannabis-related convictions from the past 15 years, includes a provision that calls for half of licenses to go to social equity applicants and requires the investment of tax dollars in communities hardest hit by the failed War on Drugs.
“The law that I signed today begins to right some of those wrongs by creating a comprehensive framework for a regulated market that prioritizes public health, public safety, criminal justice, and equity,” Lamont said in a statement. “It will help eliminate the dangerous, unregulated market and support a new and equitable sector of our economy that will create jobs.”
The law took effect July 1, with residents able to possess up to 1.5 ounces of cannabis on their person and up to five ounces at their home. Concentrates and edibles are also allowed, with limits. Legal sales are anticipated to begin by May 2022. Adults will be allowed to grow at home starting July 1, 2023.
The law creates a tax structure that includes a 3% municipal sales tax, to be be directed to the town or city where the retail sale occurred; the 6.35% state sales tax; and a tax based on the THC content of the product, which will be 2.75 cents per milligram of THC for cannabis edibles, 0.625 cents per milligram of THC for cannabis flower and 0.9 cents per milligram of THC for all other product types. According to a press release from the governor’s office, Connecticut will have about a 4% lower tax rate than New York and about the same as Massachusetts.
The Connecticut law also addresses the growing questions around Delta-8 THC, specifically including it in its definitions.
Officials at the Marijuana Policy Project praised the legislation’s social equity aspects.
“Connecticut has recognized that cannabis legalization is a civil rights issue and crafted a legalization law that aims to redress the unequal enforcement of cannabis laws and the harm caused by marijuana prohibition to Black and Brown communities, young people, and other marginalized groups,” executive director Steven Hawkins said in a press release.
— Brian Beckley
Curaleaf, the nation’s largest cannabis retail chain, opened its 107th dispensary nationwide in Edgewater Park, New Jersey. The new shop is massive — 7,640 square feet — but currently open only to cannabis patients with a valid medical card.
“We are thrilled to grow alongside New Jersey’s flourishing medical community and expand access to best-in-class cannabis products to patients in Edgewater Park,” Curaleaf CEO Joe Bayern said. “We continue to work closely with state leadership and regulators to create a successful and sustainable adult-use market, and our expansion positions us to meet the market’s increasing needs while creating hundreds of new jobs in the state.”
The company also recently tripled its cultivation capacity in New Jersey, with its second production facility completing its first harvest. Having opened its first New Jersey dispensary in Bellmawr in 2015, Curaleaf has been one of the small handful of licensed companies serving the state’s medical market. The company expects to open a third dispensary later this summer.
Also expanding its operations in the Garden State is Verano, which opened its third Zen Leaf medical dispensary in New Jersey in June.
“New Jersey has the potential to become one of the top cannabis markets on the East Coast, given the passing of adult-use legislation earlier this year,” said Verano founder and CEO George Archos.
The newest Zen Leaf shop, located in Lawrence near Trenton and the Pennsylvania border, represents the fourth collaboration between Verano and Grow America Builders, a cannabis-focused design and construction firm.
“We are more than thrilled with our 10 ½ weeks turnaround, from permitting to completing
construction,” said David Fettner, principal at Grow America Builders. “This is our fourth Zen Leaf
dispensary in the last year for Verano, and that familiarity allows us to work seamlessly with their first-rate construction and design team. New Jersey has been a robust market for us, and we
consider ourselves fortunate to have an outstanding East Coast team.”
Verano now has 78 active retail locations across the country, between the Zen Leaf and MÜV brands.
New Jersey voters approved the legalization of adult-use cannabis in November 2020 in a landslide. Public Question 1 passed with 67.1% of the vote, including majorities in every county and 562 of the state’s 565 towns. Governor Phil Murphy signed off on the adult-use cannabis reform bill in early 2021, and the state’s Cannabis Regulatory Commission has until August to promulgate the rules for the recreational market.
— Garrett Rudolph
Colorado tops Leafly report for social equity and social justice
A new report from online cannabis news site Leafly places Colorado and California as the two states making the most strides for social justice within the cannabis industry, though it shows a long road still ahead for most of the nation.
Released in late June, “Seeds of Change: Strategies to create an equitable cannabis industry” is a first-of-its-kind ranking of states according to social justice, equity and inclusion criteria. It also identifies eight distinct strategies for lawmakers to incorporate within cannabis legalization to ensure that access to the industry is not only equitable, but works to right some of the wrongs of the failed War on Drugs.
Using eight metrics, including things like the automatic expungement of cannabis records, an equitable licensing system and the dedication of tax revenues to communities adversely affected by the War on Drugs, Leafly ranked all 18 adult-use state programs, plus Washington, D.C.
The results ran from Colorado and California with scores of 95 and 90 to Alaska, Maine, Montana and South Dakota, all of which scored a 30. Noting the “deep chasm” between the top and bottom states, Leafly pointed out that Colorado recently changed its laws to include all eight of the social equity metrics the report recommends and encouraged the bottom-ranked states to “remember the people who are at the center of the politics” of cannabis.
“Colorado’s latest equity bill came many years after the state approved adult-use, and it is true that the state did not build equity into their system from the beginning,” wrote the study’s author, Janessa Bailey. “However, policymakers’ willingness to create something new in Colorado is a positive sign for equity in the cannabis industry.”
Currently, only 2% of the nation’s estimated 30,000 licensed cannabis businesses are Black-owned, according the findings, often because of high costs of entry and a lack of access to traditional capital resources.
The 35-page report defines social equity as “a tool for providing excluded communities the rights and opportunities afforded to them as equal members of society,” which in cannabis refers to “a share of resources, access to opportunity, or the removal of unfair barriers.”
Among the study’s recommendations is the need for an equitable licensing system. According to Leafly, it requires between $100,000 and $500,000 in capital to start a cannabis business, but due to federal illegality, the main sources of attaining that capital are from personal wealth, family and friends or “angel investors,” which it concludes are “far more available to white entrepreneurs,” citing that Black- and Latinx-owned business only received 0.6% and 1.7%, of total venture capital funding, respectively.
“For many entrepreneurs of color, cannabis license applications that require hundreds of thousands in startup capital, proclaimed ‘open to all,’ appear to be nothing more than veiled discrimination,” it concludes.
— Brian Beckley