Many overdue New Jersey cannabis invoices are hurting several operators in the legal dispensary market. Heady NJ heard that it often takes a minimum of 30 days to get paid from an issued invoice after a deal is done.

NJ Cannabis Industry Paralyzed by Unpaid Invoices

There was almost a fight at the recent NECANN cannabis industry convention over the issue Heady NJ heard. It got so loud that everyone by the registration desk was looking to see what would happen. Everyone was waiting for a fight. However, they calmed down.

Notably, the Dispensary Guy Mike Wiehl recently brought up the great problem of unpaid NJ cannabis invoices on an episode of his show.

According to Cannabiz Credit, 38.4% of the total NJ cannabis market Accounts Receivable (AR) money that’s due is stuck in 91 plus days past due.

They said the average time to get paid is 55.6 days.

 A lot of NJ cannabis entrepreneurs are not making the money they expected to make by this time in the NJ cannabis market.

Many stop responding to messages when they owe money.

Heady NJ has heard that few NJ dispensaries can pay Cash On Delivery (COD). Many seek to acquire products on credit and then pay back money owed once products are sold.

Unfortunately, Heady NJ has heard from many legal NJ cannabis operators about this issue for quite some time now.

However, it is hard to name specifics. Few operators want to name on the record who owes them what. For example, a prominent NJ cannabis manufacturer said they are owed thousands of dollars from a dispensary and a wholesaler.

Dealing with Late NJ Cannabis Invoices

The problem is getting intense.

“We typically carry in receivables about $1 month’s worth of sales,” Grown Rogue NJ Operations President Josh Krane declared.

He said some of the larger companies are owed millions of dollars.

“Ironically… the bigger they are, the more they abuse it,” Krane noted. “…60 days, 90 days, they’re asking us if they can trade product.”

He explained that for a small company, being owed hundreds of thousands of dollars is very burdensome, especially when dealing with payroll.

“If I can’t pay them, they can’t pay their mortgage, feed themselves…,” Krane added.

Avoiding the Latest NJ Cannabis Invoice Payers

He said they work hard to avoid dealing with the worst offenders.

“There’s 30 to 40 we won’t sell to bc they won’t pay,” Krane explained. “Some stores pay COD. Those are the best. Some want terms.”

“Some you give them net 30, and you’re chasing the money after 60 days,” he added.

“We’re not your bank,” Krane declared. “To give someone a 60-day loan… we don’t get paid extra, we don’t get interest.”

“It’s my cash they’re making their profit with,” he noted.

Krane said they’re imposing late fees.

“I’m very keen to waive just to get the money,” he added.

“Tell us what’s going on… have a relationship with us,” Krane explained. “…Jersey is small. We all know each other.”

NJ Cannabis Trade Association (NJCTA) President Todd Johnson agrees it is a significant issue. He told Heady NJ that New York cannabis makes a list of the worst offenders and thought it would be a great idea.

The New York Office of Cannabis Management (OCM), which does most of what the NJ Cannabis Regulatory Commission (NJCRC) does, has a whole section on their website devoted to Delinquent Payment Reporting.

However, they seem to want to keep the list itself private.

NJ Cannabis Money Problems

There are likely a few reasons that so many invoices in the NJ cannabis dispensary market are overdue.

Some dispensary operators definitely ordered too many NJ cannabis products that might be collecting far too much dust because they’re not moving fast enough.

It is also likely that a lot of people who worked very hard to get a dispensary open for a few years have a lot of expenses. Plus, they likely want to pay themselves very well at the same time.

In addition, it likely reflects many companies that could be near closing.

Capital, or simply money, and the lack of it, for businesspeople has been a significant issue in the New Jersey cannabis industry as well as the industry across the American state-legal markets for years.

A new industry is always hard to get off the ground. However, the ongoing federal prohibition of underground legacy weed or marijuana and state-legal adult-use cannabis has made many banks wary of lending money to businesses in the industry. Others are also similarly hesitant to do any business with any business in the cannabis industry.

In addition, Section 280-E of the federal IRS Tax Code means licensed cannabis businesses cannot deduct expenses from their taxes.