adult-use cannabis market

The New Jersey Senate Judiciary Committee held an oversight hearing on the nuances of the adult-use cannabis market and medical cannabis.

NJ Senate President Nick Scutari (D-Union) said New Jersey could be a leader on the East Coast as the cannabis industry creates jobs, revenue, and taxes.

He was also interested in decreasing the stigma around cannabis.

“All that put together gives an industry we could never imagine decades ago,” Scutari added. “I know we’ll be able to get there.”

He noted there are affordability issues and the licensed industry’s ability to compete with the underground market.

Judiciary Committee Chair Brian Stack (D-Hudson) noted the work to make the industry more equitable.

“Yet it remains a largely white business,” he said.

NJ Cannabis Regulatory Commission (NJCRC) Executive Director Jeff Brown explained they have been very busy accepting applications and launching the industry.

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He said in 12 months they issued 102 conditional licenses for cultivation and manufacturing cannabis companies. New Jersey adult-use sales began on April 21st.

“The commission also expanded access to medical marijuana by issuing 44 permits and setting third-party testing standards,” Brown said.

“We’re on par with… with how long it took to begin rec sales,” Brown said.

He noted they sought to ensure adequate supply for patients.

“We have 130,000 patients involved in the program,” Brown said.

Brown said they have received 900 adult-use cannabis license applications and 500 have been reviewed. Three hundred and 20 letters were sent to applicants who needed to submit additional information.

“Stakeholder priorities are varied,” Brown said.

Brown noted there is child-resistant packaging and details labels regarding the business, the expiration date, ingredients, potential allergens, and the number for the poison control center.

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“Educating municipalities is a priority as well,” Brown said.

NJCRC Director of the Office of Diversity and Inclusion Wesley McWhite III explained his office is tasked with ensuring the participation of social and economically disadvantaged communities.

“The CRC’s Social Equity framework ensures a firm and solid foundation we will continue to build,” he said.

McWhite wants the cannabis workforce and industry “to reflect the diversity of our state.”

He added they are developing “equity scorecards” for the industry.

Regarding the adult-use licenses awarded, McWhite said 37 are self-identified as Black-owned while 13 are Hispanic-owned. He noted there are working on securing locations and municipal approval. Of the 2019 license winners, four are Blacked owned companies while three are Hispanic-owned McWhite said.

“Has there been any submission for the clinical registration permits? When will they be issued?” Stack asked.

“Our next focus here is getting our permanent recreational rules in place and then running immediately to medical cannabis,” Brown said.

He said they want to partner with academic medical centers and existing players. Brown noted they have not released guidance on that.

Senator Joe Lagana (D-Bergen) was interested if the 2019 licensees could sell adult-use cannabis in less than a year.

“Can we make that happen?” he asked.

“The terms of the final decision are what they are. We’re going to continue to monitor it and make recommendations,” Brown said.

“How’s (NJCRC) Chair Houenou?” Scutari asked.

“She apologizes for not being here. I think she’s a little under the weather.

I think she regrets not being here,” Brown said.

“I hope it’s nothing serious. It was scheduled for a while,” Scutari replied regarding the hearing.

He noted a lot of people self-medicating. He noted he is following Colorado and their licensed industry is on 80 percent par with the unlicensed market. Scutari noted their adult-use cannabis market is competitive.

“We don’t have to reinvent the wheel. I’ve been there many many times. We are all aware there is a robust illicit market continuing in New Jersey, and our legalization hasn’t changed that. What does a fully mature and developed market look like?” Scutari said.

“One of the best indicators is price. I think where we’re starting w rec cannabis it’s simple supply and demand. We have a lot of demand and little supply.” Brown said.

He said they need to create more competition.

“Our focus is really on licensing new business under our equity framework,” Brown said.

“Do you need more staff?” Scutari asked.

“We always need more staff. We’ve grown from about 20 people. We’re now over 60. We have a number of temps and contractors. We’re working our way through it,” Brown said.

“This is an industry we expect to grow. It should be a self-sustaining administrative force,”

Brown said they anticipate their budget more than doubling in the next fiscal year as more staff is hired.

“What’s the status of product rollout? Right now, they’re fairly limited,” Scutari said.

Brown explained the forms available are flower, oils, gummies, tinctures, and recently concentrates like shatter or butter.

Scutari said there are noted no edibles in the market.

“That requires a different regulatory framework. That’s something we’re working through. It’s more akin to regulating a kitchen versus a lab,” Brown said.

“How soon?” Scutari asked. He noted a lot of people would prefer an edible.

“We hope to expand those in the future,” Brown said.

“I don’t know what a tincture is,” NJ Senate Minority Leader John Bramnick (R-Union) said. “Are you receiving regular reports about overdose?”

“You can’t technically overdose from cannabis,” Brown said.

Homegrow and the Unlicensed Adult-use Cannabis Market

“Those selling openly marijuana products, what is your info on law enforcement?” Bramnick asked.

“We don’t have jurisdiction over what’s termed marijuana,” Brown said.

In the state law, legal “cannabis” is sold by dispensaries while “marijuana” is sold by those unlicensed. It is the same plant.

“I assume since these are your competitors, you intend to take swift action against the unlicensed businesses. Do you intend to have a discussion with law enforcement over those?” Bramnick said.

Brown noted that cease and desist letters were sent to the most prominent unlicensed cannabis companies by the NJ Attorney General.

“We continue to work with our state partners. That’s all we can do,” he said.

Brown then explained the nature of tincture as a type of oil that can be consumed.

“Affordability is something our senate president has talked about,” Senator Troy Singleton (D-Burlington) said. “One area that’s been talked about is affordability as a barrier to cannabis. What is the current price per gram, per right, and per ounce in dispensaries?”

“We’re seeing eights sold between $55 and $60,” Brown said.

He said an ounce would be that times 8, which comes out to $480. Brown noted that amounts to $15 or $20 per gram. The average purchase is $150 for a quarter of an ounce.

“How does that pricing compare to other rec markets?” Singleton asked.

“It’s limited outlets and high demand until we get more businesses out,” Brown said.

He said the price has dropped to $317 per ounce in the market.

“There’s more work that needs to be done,” Singleton said.

“Prices have been coming down. We’d like to see them come down more, Brown said. “We certainly held them accountable.”

“So many in this program are telling me they’re being priced out. People are continuing to complain. Most don’t qualify for discounts,” Singleton said.

“We are 100 percent in agreement that we need to reduce price,” Brown said.

“There has been no secret of my support for homegrow. Is there any data you have seen of homegrow having a determinantal impact on the rec market?” Singleton asked.

“No, I have not seen any data. It’s something that advocates are passionate about.

I know it’s outside the purview of the CRC,” Brown said.

“New Jersey is the only state w legalized market that doesn’t allow homegrow. Would it be a logical economic thought to allow homegrow?” Singleton asked.

“I can’t speak to that,” Brown said.

He pivoted to discussing microbusinesses growing cannabis.

State Senator Tony Bucco (R-Morris) was concerned about the thriving unlicensed market.

“The issue you raised is outside our purview,” Brown said.

“It’s something the CRC should be concerned about,” Bucco said about unlicensed operators.

“I think there needs to be some clarity about the CRC… such as law enforcement. Even in my role in Union City where I serve as mayor, there’s some questions,” Stack said.

“Our purview is over legal regulated cannabis,” Brown said. “We certainly coordinate with state partners.”

“It’s sort of surreal. I see society sort of falling apart,” Senator Mike Doherty (R-Sussex) said. “This is a decadent discussion.”

“We’re here to talk about the topic of the day,” Scutari said.

Senator Nellie Pou (D-Passaic) lamented the nature of pending regulations.

“We want our employers to ensure the safety of their employees,” she said.

She was very interested in diverse applicants securing cannabis licenses.

Minorities 4 Medical Marijuana (M4M) Veteran’s Outreach Director Leo Bridgewater said some micro licenses will have problems with a limited number of plants they are allowed to grow.

“Homegrow would quickly remedy access to medicine while allowing patients to grow 6 to 12 plants… without harming the market,” Bridgewater said.

“It’s not a lot of flower. It’s this,” he added while holding a small jar. “This jar right here is about $1,000. That’s what it would cost in a retail location for a patient in the state of New Jersey.”

Cannabis activist Edward “Lefty” Grimes of Sativa Cross lamented he was not able to sign up to testify in favor of homegrow.

“Some patients pay up to $10,000 a year. Homegrow gives more control,” Professor Rob Mejia of Stockton University said.

“Why isn’t homegrow part of the conversation?” advocate Jessica Gonzalez asked since many acknowledged the steep price of cannabis. “We must remember we are not talking about a commodity. We are talking about a medicinal product. Yet here in the Garden State it still yields high penalities.”

She added rushing regulations and the high cost of entry to the market are to the detriment of Social Equity applicants.

Stack said that Scutari wanted to hear from certain experts, and thus others could not sign up to testify. He deferred to him on a decision on moving homegrow forward.

Scutari has said he would like to see the adult-use cannabis market develop rather than homegrow become legal.

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