New Jersey Cultivation Cap Lifted

New Jersey removes limit on number of licensed cultivation operations in the state

by Paul Iacampo · April 20, 2023

New Jersey removes limit on number of licensed cultivation operations

As of February 22, 2023, New Jersey’s Cannabis Regulatory Commission amended the state’s cannabis regulations and eliminated the cap on licensed cultivation operations, on recommendation from its Permitting and Licensing Committee. The State had previously only issued 17 operations – 6 strictly for medical cultivation, and the other 11 for adult-use as well as medical – with a cap at 37 total licenses.

Regulators hope that lifting the cap will help boost the stagnating adult-use cannabis market in the state by allowing cultivators to expand their operation, leading to more access for medical cannabis patients and lower prices. The New Jersey Cannabis Regulatory Commission's decision is an effort to better address social equity issues in the cannabis industry. The state has opened new applications for different cannabis license classes and adjusted regulations to better prioritize diversity-owned businesses in the application review process.

More cannabis sales, more cannabis dispensaries

New Jersey’s current licensed cultivation canopy space is much less than the average in other states where cannabis is legal. More cultivation space means more product, and more product needs more distribution sites. Lifting cultivation gaps will hopefully boost license applications in the state, and a refined review process for priority applicants will ensure that new applications will be assessed efficiently, helping businesses get up and running more quickly. The CRC hopes that more dispensaries will increase competition and force prices down, while continuing to generate more cannabis tax revenue for New Jersey.

Weed delivery

New Jersey’s current licensed growing space totals just over 400,000 square feet, much less than the average in other states where cannabis is legal. By some estimates, New Jersey would need to boost their cultivation sites from 17 to over 800. The main source of the state’s cannabis revenue has come from multi-state operators who already had a foothold in the medical cannabis market; New Jersey’s recreational market needs to grow significantly to catch up.

Other roadblocks still stand in the way. A majority of the state’s municipalities have opted out of permitting cannabis businesses–shrinking the market for new dispensaries or cannabis delivery businesses. Real estate is expensive, and there will be intense competition for limited space. Add to this the continuing problem of raising the capital to purchase real estate without access to federally-regulated banks, in the acceptable zones, and it’s clear that entrepreneurs will continue to see challenges and potential in New Jersey’s still-developing adult-use cannabis market. All that being said, New Jersey is taking a step in the right direction to help boost the state cannabis industry, and related benefits.