Starting next year, weed sales will become available in New Jersey, according to analysts of New Frontier Data, a research analytics and data analysis company focused exclusively on the cannabis industry.
The legalization of cannabis in New Jersey has been a work in progress since November 2020 when a recreational referendum to legalize it was passed by a major majority. However, the effective legalization has been delayed for several months as dispensaries in the Garden State await the go-ahead to open their doors to regular retail customers.
As far as I know, February 2022 is still the date for available sales of adult-use cannabis in New Jersey, says John Kaiga, Chief Knowledge Officer of New Frontier Data, Yahoo Finance.
If this happens, Kaiga says, an influx of consumers can be expected from nearby states. In addition, he believes recreational legalization in Maryland will push states like New Jersey, Delaware and Pennsylvania to do the same.
The illicit market of New Jersey and the surrounding areas had a heavy influence on weed prices. Even when dispensaries do begin sales to illicit customers, Kacey Morrissey, New Frontier Data'senior director of business analytics, said that regular, heavy consumers will continue to purchase the majority of their cannabis from the retail market.
There's an extremely high illicit market in New Jersey, New York. There will be, apparently, no matter what the prices are, Morrissey said. There's always the novelty in every new market, sort of legal material of now purchasing from the new market. Also there's always a big hustle-bustle in the beginning. In addition, Morrissey anticipates supply chain issues to accompany the anticipated February 2022 initialization of sales. This is caused by the influx of consumers who want to try legal marijuana for the first time.
The beginning usually causes some product shortfalls, she said. After a few months of initial excitement and prices are set, with legal accounting— prices people are seeing are much higher than the illicit market — that demand will then taper off and people will have bought a couple of items on the initial market as novelty. More recently, products with a concentrated delta 8 tetrahydrocannabinol, also known as delta 8 THC, have also gained popularity in the tri-state area due to the substance exploiting a state loophole in cannabis laws, which can easily be found at smoke shops and other stores. They can come in the form of gummies and chocolate bars to pre-rolled joints and even beef jerky. The FDA issued a warning regarding Delta 8 products, stating the cannabis products may pose serious health risks. According to Morrissey, the full legalization of cannabis in New Jersey will significantly reduce the demand for Delta 8 products in the state.
Once you legalize the full plant I don't think people are seeking out something like Delta - 8 in isolation, Morrissey said. I think it's kind of a workaround for legalization or getting high because there is some small but diminished psychoactive effect for delta - 8. Kaiga believes that in the case of recreational weed pilgrimages, New Jersey will experience the ability to draw consumers from surrounding markets where recreational cannabis laws may be more stringent for the time being. Given that there may be a period in which New Jersey is the only fully operational adult-use market in the mid-Atlantic corridor, he expects New Yorkers and Pennsylvanians alike to flock to Garden State.
Kaiga stated that the volume of cannabis tourism will depend on the number of businesses approved for sale as well as where these businesses are located in relation to surrounding states.
The ability to draw consumers from New York, Pennsylvania, Delaware, Maryland, et cetera will be an important opportunity for the state's adult-use market, at least until New York and other surrounding markets start to activate their own adult use programs, Kaiga said.
Currently, 18 states have legalized marijuana for recreational use, while 13 other states have decriminalised it. Kaiga says the legal process in New Jersey might lead to other states embracing marijuana.
We absolutely think it's going to have an effect on other states policies he said. So, in fact, the passage of the Doping Use Measure in New York served as an accelerant to legislative debate around legalization in New Jersey, we think. New York, which became adult-use legal in 2019 is still in the process of formalizing the regulations. They are moving more slowly than New Jersey in that respect, Kaiga said. But part of the impetus to finally address this issue in New Jersey was the approval of adult use in New York. In adjacent states Maryland, Delaware and Pennsylvania recreational use is still illegal, although developments have been made in the past few years. Earlier in the year, Delaware Representative Ed Osiensk introduced a bill to legalize recreational adult-use cannabis to the general assembly.
It does tend to be a regional contagion effect, where when one jurisdiction will legalize recreational marijuana the surrounding municipalities or jurisdictions will see there are consumers going into that market and spending money there that their home state could have earned, he added. And that tends to serve as an accelerant for the discussion. Once New Jersey s legal environment for adult recreational marijuana is more fleshed out, Kaiga said, other states may be forced to reconsider their positions. We do think that's going to exert quite a bit of pressure on the surrounding states to also follow suit. Thomas Hum and Ihsaan Fanusie are writers at Yahoo Finance. Follow them on Twitter with thomashumTV and Ivanusie IFanUsie.