By Todd Johnson, Executive Director, New Jersey Cannabis Trade Association
As 2024 comes to an end, it’s clear that each year since the launch of New Jersey’s legal cannabis marketplace has brought its own unique challenges. However, this year stands out as one of the most challenging yet. As our industry continues to take root, operators are facing the harsh realities of running a cannabis business, often making tough decisions that directly impact their company’s ability to survive.
The recent permanent closure of an adult use dispensary, less than one year after opening its doors, marks the first closure in New Jersey and highlights the challenging headwinds cannabis operators face every day. Our association took a tremendous amount of heat for our doom loop comments back in the summer of 2023, and this serves as a reminder of the very difficulties we’ve long cautioned the community, Legislature and Cannabis Regulatory Commission (CRC) about. This is a difficult industry in which to operate, illustrated by a Whitney Economics poll from this past June which found that only 27% of cannabis businesses operate profitably. Sadly, that number is even lower for minority operators. This is one of the reasons why our association came out so strongly against a dramatic increase in the Social Equity Excise Fee. If those cannabis tax funds are not going toward helping independent, social equity and/or minority-owned cannabis businesses succeed, are they truly making the positive impact on the people and communities the CREAMM Act intended to help?
However, despite the hardships faced this year, it was also a defining year—one where New Jersey’s cannabis operators united like never before, demonstrating remarkable resilience and collaboration to improve our industry for all.
A Look Back at 2024
The year began with an exciting wave of national attention. The Department of Health and Human Services issued a groundbreaking recommendation to ease federal restrictions on cannabis and reschedule it from its current Schedule 1 status to a Schedule 3. This rescheduling is now being evaluated by the Drug Enforcement Administration with a conclusion likely to come in the first half of 2025. The NJCTA has been a vocal advocate for the reclassification of cannabis, and we applaud the historic efforts of the Biden Administration, which has moved us closer to comprehensive reform and decriminalization that we hope to see in the new year.
The NJCTA continued to grow this year, welcoming new members – Inclusion Gourmet, High Grass Farms and Puffin – whose contributions have greatly enhanced our advocacy efforts.
In May, the departure of Jeff Brown from the CRC marked the end of an era. Under Jeff’s leadership, New Jersey experienced expanded medical access for patients, the launch of the adult-use market and witnessed significant growth of the marketplace with more than 100 licensees opening their doors for business. As Christopher Riggs stepped in as Acting Executive Director, he carried that momentum forward, helping our industry achieve significant milestones in the latter half of this year.
A Year of Progress
Those in our industry know that summarizing the challenges, hardships and triumphs of this year is no easy feat. However, I want to highlight a handful of key victories where the NJCTA, in collaboration with our state’s resilient operators and other partners in the industry, worked together to achieve significant milestones:
1. Expedited Onboarding
The NJCTA joined forces with United Food and Commercial Workers, Local 360 (UFCW) and the New Jersey CannaBusiness Association (NJCBA) to advocate for the return of an expedited onboarding process. During the COVID-19 pandemic, the NJCTA worked closely with regulators to implement an expedited onboarding waiver process, allowing businesses to conduct background checks, permitting self-certification for employees while state background checks were in progress. With continued delays, the NJCTA, UFCA and NJCBA requested the reinstatement of the expedited process to address the ever-growing backlog of hundreds of people, ready, willing and able to work.
The employee badging process, which was initially designed to be completed in 7 to 10 days, was instead taking weeks, and sometimes months, to be completed – leaving potential employees languishing and sometimes, obtaining employment elsewhere.
For those with a history of cannabis-related offenses, background checks could take up to six or seven times longer than others. These delays created significant challenges and acted as a deterrent for hiring managers to hire legacy participants for jobs in the legal cannabis industry. We must stay vigilant and always look for ways to make bridging the gap from legacy to legal easier for those looking to transition their careers in cannabis.
Through our collective efforts, we were pleased to see the CRC approve a provisional badging process, allowing employees to begin working in advance of background checks, provided that certain statutory or regulatory prerequisites are met. Going forward, we question if state mandated background checks are even necessary for frontline employees. They are not required in other regulated industries such as alcohol or gambling, so why are they necessary for cannabis workers?
2. Regulating Intoxicating Hemp-Derived Cannabinoid Products
The NJCTA has been at the forefront in advocating for the regulation of unsafe, unregulated intoxicating hemp-derived cannabinoid products for years. At this year’s NECANN conference, we emphasized our outreach efforts on highlighting the critical need for these regulations.
This issue reached a turning point in May when Senators Teresa Ruiz and Paul Moriarty, alongside Assemblymen Herb Conaway, Cody Miller and William Sampson, introduced the “hemp bill” (S3235/A4461). This vital piece of legislation aimed to address the public health emergency by removing unregulated, untaxed and unsafe intoxicating hemp products from the market, thereby keeping them out of the hands of minors.
I had the privilege of testifying before the Senate Budget and Appropriations Committee in support of this bill, and on September 12, Governor Murphy took decisive action by signing the bill into law, immediately prohibiting the sale or distribution of products intended for human consumption containing any detectable amount of THC to individuals under 21 years old.
While a court order temporarily prevents the state from enforcing certain provisions of the law, the prohibition on sales to those under 21 remains in effect, marking historic progress on this urgent issue.
3. Advocating for a Sensible Social Equity Excise Fee Rate
Late in the summer, discussions began about a potential increase to the Social Equity Excise Fee (SEEF) rate to an alarming $30 per ounce – a staggering 2,500% hike from its 2024 rate of $1.24 per ounce. Although statutorily allowable, the possibility of such a drastic increase sent shockwaves through the industry.
The NJCTA swiftly mobilized to alert industry stakeholders, the Governor’s Office and the CRC about the severe impact a dramatically increased rate could have on our developing industry, as it would directly threaten the viability of small, social equity and diversely owned cannabis business, as well as all operators across the state.
In addition to my testimony before the CRC on October 17 and our relentless outreach efforts, ahead of the annual League of Municipalities conference in Atlantic City, we hosted a panel discussion event alongside the New Jersey Cannabis Equity Association at Bakin’ Bad Dispensary to gather feedback from operators across the state. The conversations and insights from this event can be accessed at the video on our YouTube channel.
On December 12, the CRC set the SEEF rate for 2025 at $2.50 – a significantly lower rate than what was discussed initially. The NJCTA appreciates the CRC’s deliberative and thoughtful approach in setting next year’s rate, and their willingness to listen to the concerns of the thousands of cannabis industry stakeholders and consumers who expressed grave concerns about the ramifications of a drastically increased SEEF.
The NJCTA is hopeful this moderate increase will allow operators to navigate the increased cost of operations without requiring material price impacts for consumers. Moving forward, we strongly support a change in the SEEF mechanism to ensure that when funds are raised and reinvested in underserved communities, it is done so purposefully and intentionally to achieve the intentions of CREAMMA while allowing the cannabis industry and budding entrepreneurs to thrive.
4. Elimination of Patient-Only Hours
At the same December 12 meeting, the CRC issued a waiver to its rules, the first of its kind, allowing for the elimination of patient-only hours at Alternative Treatment Centers (ATCs). This change will enable ATCs to serve both patients and consumers during all operating hours, strengthening the industry while ensuring patients continue to receive priority access through expedited access and dedicated Point of Sale (POS) systems.
The NJCTA has long been a vocal advocate for this change and submitted the waiver request back in January of this year. We are proud of this result and appreciative of the Commissioners and staff for their thoughtful approach to this issue. We specifically want to thank the Coalition for Medical Marijuana - New Jersey for their ongoing collaboration and consistent dialogue to ensure patients’ needs remain a top priority at all ATCs.
Charting a Path Forward
The NJCTA remains committed to ensuring that our blossoming industry is safe, accessible, affordable, equitable, just and poised for continued growth. Contrary to common misconceptions, cannabis is not a quick path to getting rich – it’s a brutal and tough environment that requires resilience, diligence and dedication.
Looking forward, we will continue to push for critical reforms on the national, state and local levels, including rescheduling, SAFER Banking, the convergence of regulations around hemp and selling products that provide lower intoxication levels.
The NJCTA is proud to be the voice of the licensed cannabis industry, and in a position to amplify the voices of individual industry participants to ensure concerns are heard loud and clear. To our fellow operators: stay vigilant, take care of your employees and never, ever, give up. We all love this plant, but it’s essential that we protect it, and our industry, by advocating for laws, regulations and policies that set us up for success, not failure. While we know there will be challenges ahead, we have no doubt that the collaboration and resilience we’ve shown this year will lead us toward even greater success in the future.
Todd Johnson is the executive director of the New Jersey Cannabis Trade Association (NJCTA), which is comprised of the state’s permitted medical and adult-use cannabis operators with the shared mission to ensure the legal cannabis marketplace is not only safe, accessible and affordable, but also equitable and just.
Todd is also a co-founder of Community Greenhouse, a mission-driven cannabis company with plans to open a dispensary in Newark, NJ, in 2025.
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