New Jersey’s legal recreational pot sales could start within weeks, agency decides

New Jersey cannabis regulators on Monday said 13 medical marijuana stores, including seven in South Jersey, will be allowed to start selling recreational weed, possibly within weeks, giving millions of adults in the Philadelphia area local access to legal cannabis for the first time.

The closest locations to Philadelphia are in Bellmawr, Edgewater Park, and Deptford. The action comes 17 months after New Jersey voters approved legalization in a referendum. The delay had put the five-member Cannabis Regulatory Commission (CRC) under growing political pressure to launch the state’s recreational cannabis market.

Jeff Brown, the commission’s executive director, said at a special meeting Monday that the medical marijuana companies, called alternative treatment centers (or ATCs), had presented convincing evidence that they could start recreational sales without disrupting access for the state’s 130,000 medical marijuana patients.

“Given that we’ve recommended safeguards for protecting patient supply, we don’t see any market-wide concerns with moving these ATCs forward,” Brown said.

Brown said the cannabis companies will still have to undergo a final inspection, pay an expansion fee of as much as $1 million, and meet other requirements before sales can start. He did not specify how long that might take.

Separately, the CRC approved an additional 34 conditional licenses for recreational cannabis cultivators and manufacturers, taking the total of such approvals to 102. The newly licensed entities now have four months or so to find a site, gain municipal approval, and apply for a full annual license. The conditional license was designed to give entrepreneurs and small businesses a pathway into the industry.

Bill Caruso, a cannabis lawyer and lobbyist at Archer Law who has been involved in New Jersey’s cannabis legalization efforts for many years, called the CRC decision historic. “Looks like we may have first sales begin before the month is over!” he said in a text that also praised the CRC for approving more conditional licenses for social equity applicants.

A consumer advocate warned that the start of recreational sales could be rocky, especially for patients.

“These 13 existing medical marijuana dispensaries are likely to see a massive rush of traffic from novelty buyers, not just locally but from Pennsylvania, and New York, too,” said Chris Goldstein, regional organizer in Pennsylvania, New Jersey, and Delaware for the National Organization for the Reform of Marijuana Laws.

Brown, the CRC director, predicted that 788,000 out-of-state tourists would join 836,000 Jersey residents as shoppers at the state’s cannabis stores annually. To protect patient access, the expanded alternative treatment centers have agreed to set aside 14 hours a week for patients-only shopping, plus separate parking spots and check-out lines for patients, among other safeguards.

If the companies fail to maintain patient access and supply, they could face $10,000 daily fines and eventual license suspensions, Brown said.

In South Jersey, the three companies that will start recreational sales are Acreage Holdings, Curaleaf Holdings Inc., and Columbia Care Inc. The stores that were approved are in Bellmawr, Bordentown, Deptford, Edgewater Park, Egg Harbor Township, Vineland, and Williamstown.

» READ MORE: What is and isn’t allowed under New Jersey’s marijuana laws

New Jersey Gov. Phil Murphy, who took office in January 2018, said during his campaign that he favored cannabis legalization for anyone over 21. The state has had legalized medical cannabis since 2010, but the market had remained small and constrained because Murphy’s predecessor, Chris Christie, did not support it.

After legislative efforts to legalize recreational cannabis failed during Murphy’s first 18 months in office, New Jersey residents got to decide for themselves through a November 2020 ballot question, which passed 67% to 33%.

Three months later, Murphy signed a package of three bills that called for the establishment of a regulated recreational marijuana market. The measures decriminalized the possession of up to six ounces of marijuana, and mandated the removal of low-level marijuana arrests from the records of as many as a quarter of a million people.

Marijuana use remains illegal at the federal level.

During the last year, the new Cannabis Regulatory Commission, chaired by Dianna Houenou, once an attorney for the American Civil Liberties Union of New Jersey, wrestled with the challenges of building a new agency during a pandemic. The commission worked to expand an inadequate medical cannabis market that was hobbled by lawsuits over licensing decisions. Officials also laid the groundwork for the recreational market, which is expected to generate $2 billion in sales by 2025.

Establishing the recreational market is not as simple as giving the state’s medical cannabis industry a green light to start selling to any adults with cash in their pockets.

The commission had to write rules ensuring that the start of recreational weed sales did not disrupt access for patients. The CRC also had to make sure that small entrepreneurs, people with marijuana arrests on their records, and people from economically disadvantaged communities had a fair shot at entering the business — instead of allowing large publicly-traded companies with operations in multiple states to dominate it.

Complicating the rollout was a requirement for municipalities to decide whether to allow any type of recreational cannabis business to operate within their borders and choose where those businesses could operate. As of last September, 40 of 100 municipalities in Burlington, Camden, and Gloucester Counties had allowed at least one type of cannabis business to open.

Local control did not stop there. The municipalities’ governing bodies then have to approve a resolution approving recreational cannabis operations at each location.

» READ MORE: What to know about buying recreational marijuana in New Jersey

The CRC issued its initial rules in August, taking care to emphasize social equity, especially for Black and brown New Jersey residents who were disproportionally harmed by decades of prohibition.

By late October, large medical marijuana companies in New Jersey were clamoring for CRC permission to sell recreational weed to adults. They said they had boosted inventory and hired hundreds of employees in anticipation of sales starting no later than the one-year anniversary of Murphy signing the cannabis laws on Feb. 21, 2021.

Brown, the CRC’s executive director, pushed back in January, saying that regulators were not satisfied that statewide supplies were adequate for both the medical and recreational markets. What’s more, he said, not all of the medical marijuana firms demanding recreational sales had met all the needed local approvals.

Late last month, the CRC said supplies remained short. Members were not convinced that the most vulnerable patients would have uninterrupted access or that the companies’ social equity plans for hiring and other measures were concrete enough.

At the end of Monday’s meeting, CRC chair Houenou said: “I’m happy to see that some of the ATCs have decided to take this seriously and button up their plans for expansion.”

Houenou, who abstained from voting on the ATCs’ expansion, then put the cannabis companies on notice of her expectations as recreational sales start.

“I do expect the ATCs to work with the CRC and the towns in which the businesses are located to ensure that local officials are properly informed and ready for potential lines and traffic, that the facilities are ready for final onsite inspection, and that the CRC knows when the expanded ATC expects to start adult-use sales,” she said.