TRENTON — Some cannabis consumers are continuing to buy from the underground market due to a lack of dispensary locations and the high price they charge for cannabis.
During a meeting Aug. 18 of the state Cannabis Regulatory Commission (CRC), Chairwoman Dianna Houenou acknowledged the largest barriers to opening a cannabis dispensary were outside the control of the commission and many times outside the control of the business owners.
“What we’re seeing is that many businesses are having difficulty securing property, further frustrated by landlords who are changing the terms of an agreement at the last minute. There have been construction and construction permitting delays and lengthy municipal approval processes,” she said. “Together these barriers are leading nearly three out of four conditional license holders to request more time before submitting an annual license application.”
Conditional licenses allow for setup of a cannabis dispensary but not operation until the CRC completes all investigations and inspections.
Houenou said she has heard from individuals who are opting to purchase unregulated cannabis from the underground market because they are waiting for local businesses to open before switching to regulated products. She said consumers take a risk when buying cannabis items that have not necessarily been tested.
“As businesses get past these hurdles, we will see more stores opening up to the public,” Houenou said.
During the public comment portion of the meeting, Chris Goldstein, who identified himself as a cannabis consumer, said many working-class consumers cannot afford to use the dispensaries.
He said the average price for a case of beer in the state for 24 12-ounce cans is $19.30 but the average price for just 3.5 grams of regulated cannabis, which will make five or six marijuana cigarettes, is about $60.
He said prices in the underground market are about half the cost and there is no tax.
“Maryland recently debuted retail adult use sales at an average price of $35 for an eighth (of an ounce) to consumers,” Goldstein said. “If we’re willing to take a day trip up to Maine, you can find a good quality variety of full ounces, that’s 28 grams, for $75 each.”
It’s cheaper to drive to Maine to buy cannabis, including gasoline and tolls, in some cases from the very same corporations that are selling it for five to eight times as much in New Jersey, he said.
Voters went to the polls to stops arrests for cannabis possession, Goldstein said.
“We deserve a little bit better, and we deserve a fair price now that legalization is here,” he said.
CRC Executive Director Jeff Brown presented cannabis sales revenue numbers for the second quarter of 2023 showing a 10 percent increase from the first quarter from recreational cannabis sales from $145 million to $160 million in the second quarter.
He said tax revenue did not have as high an increase, showing a rise of 1.4 percent. Brown said cannabis tax revenue to the state increased from $9.8 million to $10.2 million in the second quarter.
Medicinal cannabis sales dipped 5 percent quarter to quarter from $34.4 million to $32.8 million, Brown said.
“It’s important that consumers know if you don’t buy legal, you don’t have the guaranteed safety, you don’t have third-party testing, you don’t have the regulations in place to protect you like you do in the legal market, but prices are still very high and that is pushing consumers away from the legal market,” he said.
He said legal market sales will increase as more stores open.
Brown said the CRC was seeing a proliferation of Delta 8 and Delta 9 hemp products at cheaper prices than the legal market. He said the Delta 8 and Delta 9 products are in a “legal gray area,” unregulated and they pose serious consumer safety concerns.
The CRC has issued 1,200 conditional licenses and approved 105 conversions from conditional to annual licenses, he said, for a total of 246 operating licenses.
The commission has received almost 2,200 applications and of those, nearly 1,400 have been approved with 300 sitting in rejected status. Brown said 181 licenses were before the office of licensing and 179 before the office of compliance and investigations.
During the meeting, the CRC approved 30 conversions from conditional licenses to annual licenses and 11 annual licenses, none of which was in Cape May County.
By JACK FICHTER/Sentinel staff