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The start of 2023 has been anything but dull in the Northeast cannabis industry. Licenses are being issued and new dispensaries are opening their doors as the tri-state area’s adult-use industry finally comes online. With this exciting growth comes significant opportunities for cannabis entrepreneurs and professionals throughout the region. Read on to learn more about these latest developments in New York, New Jersey, and Connecticut and what they mean for you.

New Jersey ends limits on cultivation licenses, OKs vertical integration

New Jersey’s legalization law, The CREAMM Act, established a statewide cap of 37 large cultivation licenses (known as Class 1 licenses) for the first 24 months of legal adult-use cannabis in the state. At the NJ Cannabis Regulatory Commission (CRC) meeting on February 8th, however, the CRC decided to end that cap. Effective February 22, 2023, the move is meant to “spur the continued development of New Jersey’s burgeoning cannabis industry and improve the licensing process,” according to the minutes of the meeting.

Since NJ’s adult-use cannabis industry kicked off, only 17 cultivation facilities have opened in the state. According to the CRC, that is the fewest number among 15 states analyzed. The state would need “nearly 850 more” to meet the national average.

The Permitting and Licensing Committee also reviewed the parameters of the prohibition on certain vertically integrated businesses (businesses that cultivate, manufacture, and sell their own supply direct to consumers.) After February 22, 2023, cannabis license holders will be permitted to hold a cultivator license, a manufacturer license, a retailer license, and a delivery service license at the same time, clearing the way for vertically-integrated operations. Additionally, wholesale license holders can hold a distributor license, and expanded ATCs may cultivate, manufacture, retail, and deliver.

More adult-use dispensaries open in New York

Gov. Kathy Hochul (D) announced the opening of two more licensed adult-use cannabis operations in New York, including the first located outside New York City. The dispensaries follow Housing Works Cannabis Co., which became the first licensed adult-use dispensary in the state when it opened its doors in December 2022. Smacked Village joined shortly after, also in Manhattan on Bleecker Street. Smacked Village is the first adult-use dispensary in New York owned by an individual with a cannabis conviction on their record. 

Just Breathe, a retail location owned and operated jointly by the Broome County Urban League and On Point Cannabis, opened for business February 10th on Court Street in Binghamton. Union Square Travel Agency, the third adult-use cannabis dispensary in New York City, opened in Manhattan and is located on East 13th Street. 

Both Just Breathe and Union Square Travel Agency have ties to non-profits and have opened their doors to large crowds of eager customers, ready to supply various products available, including flower, edibles, vapes, and more. The new dispensaries open amid projections that New York’s cannabis industry will top $1 billion in sales in 2023.

NJCRC calls for feedback on consumption lounges 

Previously, the NJ CRC gave the green light to a proposed framework that would allow medical cannabis dispensaries and adult-use retailers to operate consumption lounges. Now, the NJ CRC is seeking public input on the proposed rules. If finalized, the new rules would allow existing dispensaries to apply to expand their facilities to accommodate onsite consumption.

Written remarks from the public can be submitted here and should include the commenter’s name and affiliation. Feedback and comments can also be sent by mail, with a deadline of March 18th, 2023. All mail should be addressed to Dave Tuason, Deputy Counsel, New Jersey Cannabis Regulatory Commission, 225 E. State St., 2nd Floor, Trenton, NJ 08608.

Proposed rules include:  

• Operators would not be permitted to sell food onsite; however, customers could bring their own or have it delivered. Alcohol and tobacco could not be sold or consumed.

• Consumption lounges can be indoors, or outdoors in an enclosed space.

• There must be a 21-plus age requirement with photo identification for entrance.

• Application fees of $1,000 for all businesses would be required. Microbusinesses would be charged a $1,000 licensing fee, while standard licensing would cost $5,000.

The complete list of proposed rules can be found here. If approved by the CRC, New Jersey will join eight other states that have regulations providing for an on-site use option at dispensaries. 

Connecticut tops $5 million in adult-use sales in January

Connecticut’s adult-use recreational cannabis sales totaled $5.1 million in the industry’s first month of operation, from January 10 to January 31. According to state officials, medical cannabis sales reached $8.2 million during the same period. This data does not include taxes collected at the point of sale on transactions, which adds approximately 20 percent to the retail price of cannabis. This consists of the state’s 6.35% sales tax, a 3% city or town sales tax dedicated, and a 10% to 15% tax based on THC content.

Eight dispensaries have opened in the legal market, each serving medical and recreational customers. More locations are expected to come online over the next several weeks. The sales data was documented using BioTrack, an inventory tracking system set up to monitor the movement of cannabis products within the state. This data will continue to be reported monthly at ct.gov/cannabis.

Stay in the know with CWCBExpo

It’s going to be a big year for the Northeast’s cannabis industry, and staying up to date on new trends and regulations in your area is more essential than ever. Ensure your business is prepared for success by staying up to date with resources like CWCBExpo’s monthly news updates and annual exhibition in New York City. Also, join us at our annual trade show at the Javits Convention Center in New York City on June 1 – June 2, 2023. Register today to secure your chance to hear from the foremost leaders in New York’s cannabis industry and to network with other entrepreneurs and professionals working in the space.