In the 2020 general election, New Jerseyans voted two-to-one in favor of recreational cannabis legalization. Meanwhile, less than 10,000 feet across the Hudson in New York, the drug remains illegal. In order to figure out what New Jersey’s legalization means for cannabis use and possession in New York (for instance, when will we be able to smoke freely at the Hoboken PATH terminal? And will this put city drug dealers out of business?), we spoke with over a dozen experts — including a businesswoman who’s been working in the industry for over a decade, and a criminal defense attorney who specializes in cannabis.
How many dispensaries are there right now in New Jersey?
In New Jersey 12 licenses have been given to Alternative Treatment Centers (ATCs) — businesses which grow, process, and sell cannabis within the Garden State’s lines. Each is also allowed up to two second locations. “Not all of them have opened yet, and some have multiple locations” says reporter Amanda Hoover who covers cannabis for NJ.com, the Star-Ledger, and NJ Cannabis Insider. “Currently I believe we’re holding at 16 dispensaries, but it depends which day of the month you ask, because it’s increasing pretty rapidly,” says Shaya Brodchandel, president of New Jersey Cannabis Trade Association and CEO of Harmony Foundation.
So when will those dispensaries open for recreational use?
The first adult-use dispensaries are predicted to open in “the second or third quarter of 2021, if I’m being somewhat optimistic,” says Edmund DeVeaux, president of New Jersey Cannabusiness Association. First, the state has to pass legalization and decriminalization bills, which will then get signed into law by Governor Phil Murphy — a process that was expected to happen before year’s end, but was delayed on December 28, when Murphy proposed adding fines for underage use. The new bill was sent back to lawmakers on December 29, and if they agree to the changes, Murphy could sign both bills within days. Once that happens, the state’s Cannabis Regulatory Commission (CRC) will be fully appointed, and that five-person body must issue regulations within six months of the effective date of the law for every part of the industry — from growing to distribution. “The first sales are going to be from ATCs, because they’re already licensed under our medical program, so it’ll be easier for them to meet adult-use regulations,” says Jennifer Cabrera, counsel with Vicente Sederberg LLP.
Will there be enough product to go around?
There’s a concern of limited cannabis supply, because the state’s existing 100,000 medical patients already “complain about shortages all the time, and there’s about 1 million more cannabis consumers that the state wants to get into the legal market,” says Hoover, who says that ATCs have to certify that they have enough cannabis supply for medical patients in order to sell for adult use. But, increased production at many ATCs is already well underway, including at Curaleaf, a multistate cannabis operator with one location in Bellmawr and two others slated to open this summer. Taxes and the financial burden of COVID-19 are both incentivizing New Jersey to “move fast on this process, which is part of the reason they’re looking to grandfather in ATC operators” and grant them recreational licenses within the first round of licensing says Patrik Jonsson, Curaleaf regional president of the Northeast.
Where will recreational dispensaries open? Will there be ones within walking distance of public transportation?
At first, recreational dispensaries will probably open in the same areas as existing medically licensed facilities — both because these ATCs will likely become co-located medical and adult-use facilities, and because that’s “one way to gauge which municipalities are more 420 friendly,” says Hoover, pointing to cities with existing facilities, including Trenton, Montclair, and Secaucus, as well as other areas that have already approved new dispensaries, like Hoboken. Cities with high levels of tourism are also good bets for recreational dispensaries, including Atlantic City — the only municipality in the state that currently has two dispensaries — and Jersey City, which connects directly to New York City in an 11-minute trip on the PATH. “There’s a great little downtown, and the mayor, Steven Fulop, has been very cannabis friendly,” says Tara “Misu” Sargente, founder of Blazin Bakery and host of the podcast TrailBlazin’ With Tara Misu. Harmony Dispensary, which is a 30-minute trip from Penn Station, is already looking to open satellite locations in Jersey City and Hoboken “right by the PATH train,” says Brodchandel. “They’re areas that are high in population in the county where we operate, and they’re close to New York, so there’s a lot of traffic and commuters.”
Can I walk right in and buy product?
“All you’ll need is a government-issued ID to show that you’re 21,” says Hoover, who says that you’ll also want to come with cash on hand, since most of the cannabis business operates on a cash-only basis due to federal restrictions. Because New Jersey’s market is currently monopolized by a dozen operators, the state’s prices are high, averaging about $300 to $500 per ounce as compared to New York, where an ounce is typically in the $200 range — though Hoover says she’s even heard of people paying up to $650 for certain strains — so you’ll want to have about $50 or more on hand if you’re buying an eighth.
And what will you find in there at first?
Right now New Jersey’s ATCs are limited to selling flower, cartridges, lozenges, and topicals under medical regulations, but the recreational legalization bill “contemplates the sale of flower products and all other edible, or ingestible products,” says DeVeaux — like vapes and edibles. At Columbia Care, another multistate operator with one open dispensary in New Jersey and two projected to open this summer, chief growth officer Jesse Channon says that new markets generally sell “70 percent high-quality whole flower,” with vapes and edibles comprising the rest. At the Apothecarium, a multistate chain that just opened its first location in Phillipsburg, New Jersey, on the border with Pennsylvania, pre-rolls — which are illegal in Pennsylvania — are one of their biggest sellers, along with vapes, which are a more “user-friendly method of consumption in the COVID world that we’re living in where people are smoking indoors,” says Chantelle Elsner, the Apothecarium’s senior VP of retail operations.
Where can you actually smoke in New Jersey?
Smoking and ingesting cannabis anywhere other than private property is currently illegal in New Jersey, so when adult-use operators first open their doors it will probably only be legal to smoke in your own or a friend’s house (ideally one that is owned, since landlords can still ban cannabis use in rental properties under federal law). But the recreational legalization bill allows for the eventual creation of cannabis consumption lounges, “licensed cannabis businesses where you pay to enter and can bring in your own product,” says DeVeaux. Consumption lounges are a safe place for people living in government-run public housing — where cannabis remains federally illegal — to consume. They’re also an opportunity for “cannatourism”: 420-friendly businesses — like limo companies or “bud and breakfasts,” which both operate in other states, like Colorado — might also be places for green tourism, according to Hoover, who says that ancillary businesses are often easier to operate, since they “don’t actually deal with the plant, but deal with everything around it,” although those businesses would open only after recreational dispensaries are set up. Since the state is located in a “cannabis desert” as Sargente puts it, these dispensaries and businesses both stand to make a lot of money. “We have 130 million people within a day’s drive of New Jersey, and the closest place with legalization is Massachusetts and that’s five hours away, so we should be getting some cannabis tourism,” she says. Cannabis operators are also counting on customers coming in from out of state. “Attracting 21-plus customers from neighboring states is definitely part of our business plan,” says Jonsson, whose Curaleaf dispensaries are currently or slated to be located right on the border with Philadelphia. The Apothecarium is also slated to open two additional stores in northern Jersey by this summer. “They’re both about 20 minutes from New York. Pulling in people from different areas was definitely a factor of why we chose those locations,” says Elsner.
What are the penalties for carrying marijuana back to New York?
Carrying marijuana across state lines is federally illegal, but “being subject to federal laws on this particular issue would probably be rare,” especially if it’s your first offense and you’re not involved in transporting large quantities, says Jackie Gosdigian, senior policy counsel at Brooklyn Defender Services, who points out that legal penalties differ on a case-by-case basis. In most instances, “if you are in New York and you have marijuana, whether it’s on your person, in your residence, in your car, or in your hand, you’re going to be subject to the laws of New York State,” says Gosdigian, adding that in New York unlawful possession of less than two ounces of marijuana is a maximum of $150 fine, not a criminal offense. “If someone’s got an eighth of weed, I really don’t think they’ll be taking them to the FBI building and that this’ll be a federal case,” says criminal defense and cannabis attorney Joseph A. Bondy. While crossing a border with cannabis is federally illegal, “there are nominal likelihoods of those laws being enforced. And even if there was enforcement, I can think of a number of defenses to those kinds of situations,” he adds, pointing out that the decriminalization of cannabis in New York State has meant fewer cannabis felony convictions across the board. Cabrera agrees that while it is illegal, anecdotally you don’t often hear about arrests for transporting small quantities of marijuana across state lines. “I mean how many people are actually being pulled over and having their cars searched at a border? It’s one of the things where if you’re a person of color, you’re more likely to deal with this. Most white people don’t deal with it.”
What does legalization mean for the legacy market in New York (and New Jersey)?
Until there’s enough competition to drive prices down, Jessica Gonzalez, an associate with Bressler, Amery & Ross expects that the legacy market — also known as the black market — will still do well. “People might just rather go to their dealer who they’ve had a relationship with for years,” especially if they don’t want to pay taxes on their product. But once the state’s recreational market is open and more recreational dispensaries open, prices are expected to drop.
And what does this mean for legalization in New York?
“New Jersey is going to be the catalyst for Northeastern states, especially in the tristate area, to legalize,” says Gonzalez, pointing to the tax revenue that bordering states stand to lose by having their residents purchase cannabis in New Jersey. “I believe that New York will get it within the 2021 budget,” which is proposed by the governor in mid-January, and typically signed into law at the beginning of April, after negotiations with the state legislature. As recently as mid-December, Governor Andrew Cuomo said in a news conference that the state is facing a $15 billion budget deficit, which could be partially offset by marijuana revenue.