April 20 might be the unofficial holiday for pot smokers, but April 21 will be the real day of celebration for the legal cannabis industry in New Jersey.
On Thursday, adult-use marijuana sales will become legal in the Garden State — opening the doors to what analysts believe could be a $2 billion market by 2025. It's been a long wait for New Jersey's proponents of recreational cannabis: Voters in the state first approved a ballot measure legalizing recreational marijuana sales in Nov. 2020, and Gov. Phil Murphy signed the bill into law in Feb. 2021.
Delays in establishing a regulatory framework for the industry have left consumers waiting more than a year for the moment when anyone over the age of 21 can walk into one of the state's dispensaries and walk out with legally purchased cannabis.
And after such a long wait, New Jersey's dispensary owners are expecting Thursday's launch to have something of "a celebratory aspect to it, for sure," Joe Bayern, CEO of cannabis company Curaleaf, tells CNBC Make It. "People just want to be part of the experience and learn and come from an educational standpoint, to see what it's all about."
Only seven companies that received approval from New Jersey's Cannabis Regulatory Commission to begin recreational sales of marijuana flower and cannabis-infused products on April 21.
They get the first crack at the potentially massive market because they already operate medical marijuana dispensaries in the state — meaning they're less likely to sell out or face other logistical challenges on day one.
And demand is certainly expected to be, well, high. Just 13 total dispensaries are set to open for recreational sales on Thursday, across a state of more than 9 million people — plus customers likely flooding in from nearby states like Pennsylvania and New York.
Curaleaf, which is based in Wakefield, Massachusetts, owns and operates two New Jersey locations – in Bordentown and Edgewater Park – that are adding recreational cannabis sales to their existing medical marijuana dispensaries on Thursday. Bayern says he's expecting long lines in the morning.
"We've had long lines in some of our locations without adult-use. So I think this will just be adding to that," he says. "We've brought on extra people, we've worked on traffic studies, we've opened up new [point-of-sale] stations at all of our dispensaries. So we've done everything we can, I think, to be prepared for it."
Aaron Miles, the chief investment officer at Chicago-based cannabis company Verano, agrees. When Illinois kicked off recreational sales in 2020, Miles says, some of Verano's local dispensaries saw "people waiting eight hours" in line to buy products.
On Thursday, Verano also plans to add recreational sales to two of its New Jersey-based medical dispensaries – each called Zen Leaf, and located in Lawrence and Elizabeth, respectively. Miles says his company has worked hard to prepare, and hopefully prevent, the same kinds of supply-and-demand problems Verano experienced in Illinois.
The plan, he says, is largely to make sure each dispensary is fully staffed and stocked ahead of time. "Are lines gonna be eight hours long [in New Jersey]?" he says. "I'm not sure. But if they are, we definitely have the appropriate kind of logistics in place to facilitate [that]."
New Jersey's launch date of April 21 is very intentional: State regulators expressed concern that kicking off the recreational market on 4/20 would overwhelm dispensaries with new customers on the market's first day.
In fact, Bayern and Miles both say, state officials have been concerned for months that dispensaries might not have enough supply to meet consumer demand from the get-go. That would be a problem: Empty shelves in dispensaries could send customers back to the illicit market, while making the rollout of recreational sales appear ill-planned or even mismanaged.
Dispensary owners predictably say they're ready. Miles says most cannabis companies originally prepared for New Jersey's recreational sales to begin in August 2021, and state's months of delays have afforded everyone even more time to stock up on supply.
Bayern acknowledges that the "limited number" of dispensaries will probably create a bottleneck for customers. But that's essentially the idea: The seven multi-state companies that launch recreational sales in New Jersey on Thursday can establish the market, while newer and smaller businesses spend the next several months building up supply and hiring staff.
The approval timeline for those newer and smaller companies – including businesses run by people of color and others adversely affected by the war on drugs, per the state's own diversity goals – is currently unclear. Companies like Curaleaf and Verano will likely have a huge head start establishing a foothold in what's expected to become a multibillion-dollar market.
Still, Miles and Bayern agree that while they appreciate the head start, bringing in more businesses can only help build a robust market in New Jersey that benefits all involved: More dispensaries of all shapes and sizes across the state could attract more customers to the legal cannabis market.
Cultivators like Curaleaf and Verano could even bring in additional revenue by supplying products to their dispensaries' smaller competitors.
"I think you're gonna see a ramp up quickly," Miles says. "I think people have incentive to get the the dispensaries turned over to adult use."