A South Jersey cannabis webinar featured New Jersey Cannabis Regulatory Commission (NJCRC) Commissioner Krista Nash discussing the state’s emerging market.
The accounting firm Alloy Silverstein sponsored it.
“We are in the phase of normalization,” NJ CannaBusiness Association (NJCBA) President Ed DeVeaux said.
“We’re doing everything in our control to meet the Social Equity goals set forth in the legislation,” Nash said.
“Four point six million dollars in tax revenue. That is how much was collected in the first ten weeks since recreation (or adult) use sales began,” she explained said about seven open dispensaries at the beginning of the New Jersey adult-use cannabis market.
Building a Cannabis Market
“The Commission’s focus is to ensure the expansions did not cannibalize the medical market,” Nash said.
“Some of the ownership structures we are seeing are very complex,” she said. Nash explained that examining them closely has resulted in a delay in license application processing.
She noted they conduct thorough reviews for “probity.” Nash explained the high volume of applications had slowed the process. In addition, they are also eager to prevent the implementation of shady Financial Service Agreements (FSAs) and Management Services Agreements (MSAs).
“While these partnerships can be beneficial, they can skirt caps on licenses and exploit inexperienced business owners. We are carefully reviewing terms for these agreements,” she said.
Nash noted that this had delayed the process.
She explained Social Equity fees collected from adult-use cannabis sales would be used to help certain communities.
“The Commission will hold annual regional hearings in North, Central, and South Jersey,” Nash said on the use of the fees.
She noted the NJCRC is working on real estate, securing capital, and municipal op-outs or towns that don’t like cannabis companies.
Nash noted the limited supply, inflated pricing, and lack of access to capital are serious issues in the New Jersey cannabis market. They are working with the NJ Economic Development Authority (EDA) to address the issue of capital.
“But until these EDA monies are available… license holders are up against the clock to secure financing from alternative sources with fair terms,” she admitted.
“Municipalities are key here to the success,” Nash said. “We recognize there are a lot of unknowns.”
She sought to assure them that the NJCRC is holding conversations with many mayors and the League of Municipalities.
“South Jersey has land available at lower prices,” Nash said about towns.
She noted the different sorts of ancillary company opportunities, like consultants, lawyers, accountants, and supply companies.
“This is an evolutionary process in New Jersey, and I think we are off to a strong start,” Nash declared.
“We don’t have enforcement powers, but we’ve been working to reach out to welcome those in the illicit market into the space,” she said when asked about legacy operators.
Nash said NJCRC Director of Diversity and Inclusion Wesley McWhite is spearheading a “legacy work group.” It will hear their concerns about how to get safely into the regulated market.
NJ Cannabis Market Questions
“We’re fine-tuning the rules. Stay tuned,” she said about the delay on cannabis consumption lounges.
Lounges are on the agenda during the next NJCRC meeting on October 20th. It will be a hybrid in-person meeting in Trenton and live-streamed.
“Edibles are something we’re looking at, and that is involving another state agency. There’s health and safety involved in that. We will visit that at some point,” Nash said. NJCRC rules on consumption lounges and infused pastries like pot brownies in the market remain forthcoming.
“We are eagerly anticipating what the CRC is coming down the pipes with that,” said Fay Coleman of Pure Genesis, a hemp company that wants a license.
She added that New Jersey needs a municipal performance scorecard to ensure the diversity of the community matches the diversity of the businesses.
“There are just people who take advantage,” DeVeaux said. “I need to have my wits about me as I enter this industry.”
“Labor and industry are working together in this state,” Hugh Giordano of the UFCW labor union said. “At the end of the day, we’re competing against other states.”
“The UFCW has put a lot of resources towards that. The shore towns will take more conversation. Local community activism is needed,” he added.