Ask Our Experts: New Jersey’s New Adult-Use Market


Q: Amid the news about five new states legalizing cannabis, there have been some conflicting reports about New Jersey, and when adult-use sales will begin there. Can you clarify what is happening, and what any impacts might be to the outlook for its market growth projections?


By Josh Adams, Ph.D., Senior Industry Analyst, New Frontier Data

A: Previously, those states having chosen to legalize cannabis sales for adult use on top of existing medical cannabis programs have taken differing approaches. The respective delays between passage of legalization and the start of adult-use sales has been wide-ranging, and depended heavily on whether the given state chose to utilize the existing supply-chain infrastructure of their medical cannabis program in order to expedite the start of adult-use sales.

New Jersey has not been without its fair share of implementation hurdles for its medical cannabis program — most notably high retail counter prices. Tax rates and resulting prices for adult-use cannabis, however, are expected to be low enough to contend with the illicit market, and it is expected that medical license holders will be eager to serve the additional demand  (regulations permitting).

If New Jersey gives its adult-use market a head start — and allows as early as March 2021 for sales through medical dispensaries — total annual sales revenues for adult-use cannabis in the Garden State are projected to exceed $2 billion by 2025. Should delays instead conspire to push the program’s sales to the following calendar year (i.e., January ’22), they would forestall the inevitable growth of the program, resulting in annual revenues shy of $1.8 billion by 2025.

Thus, the difference in total revenues earned over the time frame of 2021-2025 would be worth an additional $1.5 billion should sales begin in March ’21 instead of January ’22.