New Jersey Regulators Delay Launch of Recreational Pot Sales

New Jersey regulators last week declined to award retail cannabis licenses to eight medical dispensaries seeking to sell adult-use cannabis, delaying the expected launch of recreational pot sales in the state for at least weeks. The delay, which reportedly surprised cannabis industry insiders, came less than a month after New Jersey Gov. Phil Murphy said that recreational sales were expected to begin “within weeks.”

At a meeting of the state’s Cannabis Regulatory Commission (CRC) on Thursday, executive director Jeff Brown said that the agency wants the eight alternative treatment centers (ATCs), as medical cannabis dispensaries are called in New Jersey, to submit plans specifying how the businesses will ensure there is enough cannabis for patients when recreational sales begin.

“We may not be 100% there today, but I assure you we will get there,” Brown said on March 24, as quoted by NJ.com. “We have a few things to address and when we address them I’m happy to return to this body with a further update.”

The commission then voted 5-0 to table the recreational sales licenses for the eight businesses until a later date.

Ensuring a Supply of Cannabis for New Jersey Patients

Brown said that the commission is concerned that the dispensaries will not have enough cannabis for medical patients, estimating that the market could be short up to 100,000 pounds of cannabis to meet the needs of both recreational customers and patients. Brown added that the CRC would conduct site visits to the applicants to make sure that they will be able to handle the new influx of customers, noting the commission wanted the businesses to have separate entrances and service lines for patients and recreational customers.

“Our goal is to work with the industry and the industry to work with us so at the very next CRC meeting we have a cohort of ATCs that are turn-key to launch this market here, simply pending a vote by this commission,” Brown said. “If for any that are still not there, hopefully [they’ll be] ready for conditional approval pending certain timelines and regulatory milestones that we can work to get done.”

Senate President Nicholas Scutari, who led the drive to legalize medical and recreational cannabis in the New Jersey legislature, expressed frustration after the CRC announced the delay.

“Totally unacceptable,” Scutari wrote in a text message to NJ Advance Media. “The Senate is weighing its options with regard to oversight.”

Representatives of the state’s cannabis industry were also displeased by the setback. The New Jersey Cannabis Trade Association said in a statement that it “remains optimistic that the CRC will sooner rather than later open the adult-use cannabis market in New Jersey, though we admit to being disappointed with today’s decision to further continue its delay.”

“In November 2020, New Jerseyans made it very clear that they wanted a safe and legal adult-use cannabis marketplace in the state,” the trade group added. “It goes without saying that no one could have foreseen that some 16 months later, we would still be waiting to see this come to fruition.”

The CRC did, however, approve conditional licenses for 68 adult-use cannabis cultivators and manufacturers. The licenses, which were approved as a social equity measure, are designed to ensure a path into New Jersey’s recreational cannabis market for small businesses.

“This is a historic action that the Board is proposed to take with these first conditional licenses to sell adult-use recreational cannabis in the state of New Jersey,” Brown said before the board voted to approve the conditional licenses. “I am humbled to make this announcement.”

“These are the first businesses to get a foot forward in the state of New Jersey,” he added. “I cannot stress that enough.”

Governor Still Says Adult-Use Sales Will Begin in Weeks

Last month, after the CRC failed to meet a self-imposed deadline to launch recreational cannabis sales, Murphy said that he expected the delay would be short-lived.

“If I had to predict, we are within weeks—I would hope in March—you would see implicit movement on the medical dispensaries, some of them being able to sell recreational,” Murphy said last month on his WBGO Newark radio show. “They’ve got to prove they’ve got the supply for their medical customers. I hope shortly thereafter, the standalone recreational marijuana operators.”

After the CRC announced its most recent delay of adult-use sales last week, Murphy reiterated that recreational cannabis sales would begin imminently.

“The way this is supposed to work, and it is working this way: If a medical dispensary can prove it has more than enough supply for its medical customers, it’s at least eligible,” Murphy said.

“Assuming it meets all the other requirements, it should be deemed eligible,” the governor added. “I believe it will still be a matter of weeks. It’s not gonna be months.”

The CRC did not indicate how long the latest delay would last, although the agency posted a notice of a special meeting scheduled for April 11.