New Jersey’s cannabis market is rapidly approaching the billion-dollar milestone. From July 2022 to June 2023, dispensaries in the state sold more than $734 million in cannabis products. The majority of these sales, over $555 million, came from recreational marijuana customers, according to data from the New Jersey Cannabis Regulatory Commission.
This impressive sales growth is accompanied by a significant expansion in the number of dispensaries. Twelve dispensaries opened for recreational sales in the first and second quarters of 2023, contributing to a sales increase of about 10% per quarter. In the third quarter alone, 20 new dispensaries began recreational sales, a notable increase compared to the nearly year-long wait for the same number of openings from June 2022 to June 2023.
The trends in adult use and medical cannabis markets are diverging. Medical cannabis sales have seen a sharp decline of over 44% since adult use sales began in April 2022. Conversely, sales of adult use cannabis have surged by nearly 40%. During the same period, New Jersey medical marijuana patients spent approximately $178 million.
The decline in medical marijuana sales is occurring alongside a significant drop in the number of registered medical marijuana patients in New Jersey. As of September 2023, there were just over 98,000 registered patients, a decrease of about 20% from nearly 123,000 patients one year earlier. Since the start of recreational sales, the number of registered patients has decreased by almost a quarter.
In terms of tax revenue, the state imposes a 6.625% sales tax on cannabis sales. Since the launch of recreational sales, New Jersey has collected nearly $39 million from this tax. Additionally, the Social Equity Excise Fee (SEEF), which is charged to cannabis cultivators and wholesalers, has generated another $1.9 million. The New Jersey Cannabis Regulatory Commission is responsible for recommending how SEEF revenue should be used to support communities most affected by the War on Drugs.
The SEEF rate fluctuates based on the average price of cannabis and is currently set at $1.52 per ounce, with a planned decrease to $1.24 next year. Municipalities can also implement a 2% transfer tax on cannabis sales, which directly benefits local governments. It is important to note that both the sales tax and SEEF apply only to recreational marijuana purchases. Medical marijuana patients were subject to sales tax until July 2022, when a four-year phaseout concluded.
This report highlights the evolving landscape of New Jersey’s cannabis market, showcasing the significant financial impact and shifting dynamics between recreational and medical sales.
