NJ has some of the most expensive legal weed in the country. But why?

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NJ has some of the most expensive legal weed in the country. But why?

Assume, for a moment, you want to get high. And you want to do it on the cheap.

For around $300, you can drive to Massachusetts, pick up an ounce (about $200), and drive back. For $450, you can even hop on a flight to Denver, buy an ounce (about $40) and fly back.

There are flaws with these plans. After all, it's still a felony to transport even legally-purchased cannabis across state lines, even between states that allow it.

But if cost is the main concern? It's cheaper than buying legal weed at most dispensaries in New Jersey.

In the Garden State, an eighth-ounce of legally purchased cannabis costs as much as $60 — $65 after tax — at the 24 dispensaries currently open for "adult use," an industry term used to refer to sales to recreational customers over 21 years old.

But there's minimal discount for bulk purchasing: While there are some price cuts on larger amounts of smaller buds, known as "littles," an ounce of top shelf flower otherwise costs exactly as much as purchasing eight separate eighth-ounce portions.

It's a stark contrast to the black market. "Gifting companies," which claim to technically sell baked goods and only deliver marijuana as a "free gift" to customers, charge as little as $150 for an entire ounce, for example.

In order to compare pricing trends, the Asbury Park Press reviewed menus at every adult use dispensary in New Jersey and dozens of dispensaries in other states. The Press also analyzed data from various cannabis control agencies in other states.

The data is clear: New Jersey has some of the most expensive cannabis in the country.

Across the country, cannabis prices have plummeted to their lowest prices of the legal weed era as supplies hit an all-time high in states where legal weed has been available for years.

The lower prices haven't hit the east coast yet. An ounce still costs around $200 in Massachusetts and Maine. New York and Connecticut charge slightly less than New Jersey, but have higher taxes that even out the prices.

But in the Midwest and on the west coast, prices are a fraction of where they were even two years ago. In Michigan, the pre-tax retail price for an ounce of cannabis is around $80, down from $516 when recreational sales began in 2019.

And in Colorado, it's $40 for an ounce — cheaper than just an eighth-ounce in New Jersey.

Little supply, and less competition

Cannabis is an industry, and industries follow the trends of supply and demand. And in New Jersey, supply is at a minimum — and demand is booming.

There are only 13 cannabis cultivators in operation, only 10 of which are permitted to grow cannabis for the adult use market. And there's also a lack of competition, with only 10 companies own the 24 adult use dispensaries.

"There's just a lot more demand than supply. We expect to see more cultivators coming online over the next 12 or 18 months, and that will bring more supply into the market," said Todd Johnson, executive director of the New Jersey Cannabis Trade Association, which represents most dispensaries and cultivators in the state. "But you're talking about 650,000 consumers entering this marketplace. When you have that kind of influx, there's going to be incredible demand."

A 2022 report by Whitney Economics and Leafly, a cannabis market analysis firm and cannabis news website, estimated that New Jersey was only able to capture less than 20% of the total demand for cannabis in the state in the first three months of the adult use market. Its 0.3 dispensaries per capita ranks easily at the bottom of all other legal weed states, according to the report.

Like Johnson, the New Jersey Cannabis Regulatory Commission has maintained that "new locations and greater competition" will cause "the customer base to grow and prices to come down," Executive Director Jeff Brown said in December, in announcing nearly $200 million in cannabis sales for the second and third quarter of 2022.

The CRC has already issued nearly 1,700 adult use licenses to various cannabis retailers, cultivators and manufacturers. But not a single one has opened up shop yet — and the vast majority of those licenses are conditional, leaving licensees to fight over the few communities that have opened up to the industry.

Until those businesses open, the prices are unlikely to drop. Other states have competition at virtually every level of the industry, both vertically-integrated businesses — which own everything from cultivation to retail, like New Jersey's existing dispensaries — and individual license holders.

And it's not just smaller, mom-and-pop businesses charging cheaper prices: The multi-state operators adjust their pricing according to market trends, as well.

The cheapest eighth-ounce at one of Curaleaf's three New Jersey dispensaries costs $50 before taxes. In Connecticut, it's $36. In Arizona and Nevada, it's $20.

"The cannabis industry gets to exist in these regulatory bubbles that stop at the state border, even though these companies operate internationally," said Chris Goldstein, a longtime marijuana legalization advocate with the National Organization for the Reform of Marijuana Laws. "The price in New Jersey is high, and it's being artificially maintained. No other industry gets away with it.

"If any other industry charged this much for essentially the same product, it would pretty plainly be called price-gouging."

Johnson says it's not that simple: Every state has different laws, regulations and, importantly, market demands. And because marijuana is still illegal on the federal level, it's not as simple as bringing more supply from, say, Massachusetts into New Jersey.

"Every state is essentially its own animal. No product can go across state lines, so the supply-and-demand dynamics in New Jersey will be different," Johnson said. "Each operator has to decide at what price poitn they're going to sell their products, and that will determine how much supply they have on hand."

13 years in the making

Critics, like Goldstein, maintain that the system is working exactly according to plan, including the high prices.

The New Jersey marijuana legalization laws, enacted in 2022, specifically allowed for existing medical marijuana dispensaries to get the first crack at recreational sales, while regulators were still sorting out new licenses.

And until February, the CRC was prohibited from licensing any more than 37 cultivators, including the existing medical marijuana dispensaries.

Goldstein takes it a step further: The cannabis industry in New Jersey is still reeling from Gov. Chris Christie's early restrictions on the medical marijuana program, which only allowed for six dispensaries and significantly limited the number of qualifying conditions for medical marijuana patients.

The supply-and-demand issues became notable after Murphy and legislators expanded the program in 2018 and 2019, but the number of patients grew exponentially — from 15,000 to 111,000 since 2018 — while the number of medical and adult use dispensaries has topped out at 35, for now.

While most states also allowed existing medical marijuana dispensaries to open up for adult use before the rest of the market, those states had far more robust medical marijuana markets with countless more dispensaries operated by more than just 10 companies.

"Chris Christie doesn't get the credit he deserves for helping to create corporate cannabis," Goldstein said. "It's corporate-controlled. It's expensive. Patients have to pay to get their cards. It's still very limited. This is Christie's idea for medical marijuana."

Christie never hid his disdain for marijuana. During a 2014 radio call-in show, he said medical marijuana programs could become a "front for legalization … unless you have a strong governor and a strong administration" that places restrictions on it" during a call-in show.

And in 2016, he referred to tax revenue from legal weed as "blood money."

"There is nothing we spend in government that is important enough to allow me to willfully poison our children for that money," he said on another call-in show.

'People I used to know'

Despite the high prices, business is booming. From April through September, the Cannabis Regulatory Commission reported nearly $200 million in adult use cannabis sales.

And it's not going away anytime soon: Analysts predict legal weed in the Garden State could become a $3 billion industry within a few years.

Plenty of cannabis users, new and old, prefer the experience of walking into a store and picking products off a menu, even if it costs a little extra.

Chris Brigandi and Will Fetzke, two 23-year-olds from Sayreville, became regulars at the Ayr dispensary in Woodbridge soon after recreational sales began.

"It's definitely more expensive, but I can walk into a store and buy it," Brigandi said, after buying a vape pen and two cartridges on Thursday. "I don't have anybody looking at me sideways. I'm not waiting outside in front of some house for a dude to come out with a baggie."

For Fetzke, it's about safety. A frequent vape user, he was spooked after a sudden outbreak of lung illnesses largely among vape users in 2019 that hospitalized more than 2,800 people, including 68 fatalities.

He walked out of the dispensary on Thursday with two vape cartridges and an eighth-ounce of legal weed — about $230, all together.

"This way, I'm getting a solid product. And I only paid an extra $25 more than I would have if I went to people I used to know," Fetzke said. "I'd rather spend the extra money to make sure I'm buying something that won't kill me."

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