East Coast Cannabis

New Jersey finally got their act together and back in April the CRC gave a handful of medical operators the green light to start selling to the public so long as supply for the state's 130,000+ registered patients.

There are 18 stores currently selling adult-use as well as newly tax-free medical cannabis (see map below) and some are saying that the anticipated supply crunch has long since begun.

Some single stores in northern NJ have the potential to do $30-$50 million annually and it is just a matter of time before the needs of the 6 million adults 21 and older are met with competitively priced, quality cannabis.  Ascend topped $1,210,000 in their Rochelle Park location's best week.  

On the Social Equity and Diversity front, the CRC's Jeff Brown said they have granted 308 conditional licenses , including 110 retailers, 130 cultivators, 68 manufacturers, the latest of which shoiuld be officially announced shortly.

Annual licenses, with lower priority than their SE counterparts, number 240 and are in a unfortunate holding pattern, much to the chagrin of potential operators.

Rules for delivery applicants are due by year's end even the 486 municipalities that are still opted out of any Class 5 cannabis retail licensing will  have operators delivering cannabis to their cities and townships.

New York State has cannabis plants in the ground and ambition plans to open 150-200 dispensaries with capital from a $200 million public/private fund.  These retails are geographically broken down as one might expect, with a majority of these in the Manhattan metro area including Long Island and Westchester.

These conditional adult-use retail dispensaries (CAURD) will only be available to justice-involved individuals that have prior business experience and documented success or social enterprises operated by independent nonprofit organizations. Unfortunately, a lawsuit by a Michigan operator questioning the validity of New York's de facto residency requirement is stalling 65 of the 150 dispensaries in the microregions of Brookyln, Finger Lakes, Central NY, Western NY and Mid-Hudson.  

Region (Number of CAURD Locations)

Manhattan​ (22)

Long Island​ (20)

Brooklyn​ (19)

Mid-Hudson​ (17)

Queens​ (16)

Western New York​ (11)

The Bronx​ (10)

Finger Lakes​ (9)

Capital Region​ (7)

Central New York​ (7)

North Country​ (4)

Staten Island​ (3)

Southern Tier​ (3)

Mohawk Valley​ (2)

19 more cultivation licenses have just been approved for a total of 242 as well as 15 processing licenses.

There has been conflicting information published by the Office of Cannabis Management pertaining to location specifics. Directly from the OCM FAQ:

1. Can I choose where my CAURD licensed retail dispensary will be located?

• Applicants who are selected will be assigned a retail dispensary location in one of the fourteen (14) geographic regions of NYS. When applying you will be asked to indicate which region(s) of the State you would prefer to be assigned a license in. You will be able to rank your top five (5) preferred regions. You will not be able to choose the specific street address or neighborhood for this dispensary. Provisional licensees will be able to share their preferences among the available locations in the region for which they have been selected. If you would like to select your own site for a retail dispensary, the CAURD license may not be the right fit for you. Future adult-use retail dispensary licenses (and those for on-site consumption sites) will have more flexibility in allowing licensees to choose their own location.”

Then they issued the folowing:

“The proposed regulations do not insist upon applicants to use New York Social Equity Cannabis Investment Fund locations and provide for the allowance of an applicant to provide their own location that complies with the proposed regulations.”  Hopefully, some clarity will come our way in the upcoming weeks.

The OCM is currently doing it's best to crack down on unlicensened "gifting" of cannabis via cease and desist letters to over 50 operators in the inevitable gray market.

Connecticut's lottery system is going to give them trouble as there was no shortage of applicants (37,000 at last count) and very few licenses available.  Their Social Equity Council isn't going to make the same mistakes as Massachusetts and will hopefully be sped up by remaining under the Department of Consumer Protection instead of creating an enitrely new regulatory body like Massachusetts, New Jersey, New York and basically everywhere else but Washington State.

5 retail dispensaries were approved on July 28th, as part of the Social Equity initiative.  These five potential SE operators won't be identified until they have been referred to the DCP for the next licensing step. (One applicant was denied by the SEC and 9 others were expected to be rejected due to owernship and control issues.

16 Social Equity cultivator license applicants qualified (out of 41) according to CohnReznick, the accounting firm tasked with vetting the submissions. Of the 25 not accepted, 8 failed to meeting residence and income requirements and 17 were rejected based on ownership and control issues.  There are at least a dozen lawsuits filed challenging the licensing process  The fee is $3 million and any of the 16 that are approved by the DCP will receive a provisional license.

The locations of these cultivators will be:

• Bridgeport (2)
• Hartford (5)
• New Britain (3)
• Waterbury (2)
• Manchester (1)
• Southington (1)
• Middletown (1)
• Stamford (1)

One of the backers of  the 16 current Social Equity licensees, Art Linares, is causing a ruffle because he also happens to be Samford Mayor Caroline Simmons' husband as well as a former 33rd District Sentator and candidate for State Treasurer.  Linares Faye LLC is one of two principals of a holding company called Connecticut Social Equity Holdings LLC, the other being helmed by Steven Van Scoy of East Haven, the actual SE candidate. Sounds about right.

The list of applicants filing lawsuits so far:

1. Coast Cannabis (Westbrook)
2. Red Barn Farms (West Hartford)
3. DF C2 (Stamford)
4. Leaf  CT (Waterbury)
5. Let's Grow (Hartford)
6. Elm City Agg (Guilford)
7. Green Meadows Farm (Bridgeport)
8. Gunter Investments (West Hartford)
9. Natuilus Botanicals (Bridgeport)
10. Core Cult (Farmington)
11. The Hartford Cannabis Company (Hartford)
12. The Goods THC Company (Hartford)
13. Acreage Connecticut Cultivation JV LLC (New Haven)

Anyone with $3 million to apply has deep enough pockets for litigation, especially Acreage.  They have created a Joint Venture with Kebra Smith-Bolden and the denial seems based on a corrected typo concerning Smith-Bolden's 65% ownership originally listed as 50% on the application.  Stay tuned.

Rhode Island is allowing 33 adult-use retails across 6 regions, 25% of which will be set aside for social equity applicants and 25% for worker-owned cooperatives.  

Current medical operators, called compassion centers, can potentially open for hybrid sales by 

12/1/22 after paying $125,000 fee to Social Equity Fund.

The conversion process is set to begin by 10/15/22 with an aggressive timeline set to get them to adult-use-sales by December 1st.  The State Department of Administration is already forecasting $41 million in sales by the end of June 2023.

The Vermont Cannabis Control Board (CCB) website is kept very current with all licensees,. but there's been a backup due to understaffing that has catastrophically delayed the process for some small cultivators.  

Regulators thought that indoor growers would be responsible for 80% of the supply, but sungrown cannabis portends to be more like 60%.  Very Vermont and very welcome in an industry stymied by sustainability, but undersupply and the correlating price inflation are going to hamstring the licensed market.

It is estimated that Vermont will need 500,000 square feet of canopy to meet demand.

87 of the 104 cultivation  licenses approved so far are for small, outdoor growers by design and there are about 60 potential retailers in the pipeline.

68 towns have opted in to allow dispensaries and applications for retail operators opened on 8/3/22, a month earlier than expected.

Adult-use sales are still pegged to being 10/1/22.

Tax revenue is estimated to be $27 million annually.

Maryland has an extremely developed medical market serving over 157,000 patients with nearly 103 operational dispensaries supported by 18 cultivators and is on pace for $600 million in sales for 2022.  

"Do you favor the legalization of the use of cannabis by an individual who is at least 21 years of age on or after July 1, 2023. in the State of Maryland?"

Adult-use passed 11-8-22 ballot as Question 4 though sales may take until 2024 or even 2025 because of the inevitable delay in creating the framework. Like New Jersey, however, medical operators could also start selling to the public much sooner.

Once an adult-use framework is enacted, regulators will need to establish rules, start the licensing process, and license winners will need time to develop their businesses. Diversity is not something that was achieved in the medical market, so a "disparity study" critical to developing a diverse, equitable recreational marijuana industry isn’t expected to be finished until the middle of the 2023 legislative session.

DC has been the grayest of gray markets since Initiative 71 took effect on 2/26/15 and adults 21 and older could possess up to two ounces, gift up to one ounce and grow up to 6 plants.  

Congressional oppostion has kept a regulated market from being created via a rider attached to the omnibus spending bill barring the use of funds to do so. Sales are currently prohibited though the gifting market thrives.

Over 600,000 current patient,s 131 dispensaries and $1.2 billion in annual sales makes the Pennsyvlania medical market very attractive for MSOs and unsurprisingly, Trulieve, GTI, Curaleaf, Jushi, Cresco/Columbia Care, Ayr, Ascend and TerrAscend have all staked out a footprint.

Arcview Market Research pegs the adult-use market at $3.9 billion in 2025.

Pennsylvania is feeling the pressure of neighboring states’ passage of adult-use marijuana