New Jersey is likely to start sales first, but New York is poised to become the nation’s weed capital.
The Northeast is poised to transform the U.S. cannabis industry — and make New York City the nation’s weed capital.
New York, New Jersey and Connecticut — with a combined population of 33 million — are scrambling to open recreational markets in the coming months. Millions of other East Coast residents in neighboring states will suddenly find themselves within an easy drive of legal weed.
After years of taking a back seat to the West Coast, many industry observers believe that New York City will become the center of the cannabis industry. And the city’s outsized influence could be the long-sought catalyst for federal leaders to pursue a national legalization approach.
“New York is going to be Amsterdam on steroids,” said Jeanne Sullivan, a longtime New York-based cannabis investor, citing the tens of millions of tourists who flock to the city every year.
Despite the liberal leanings of East Coast states, the region has lagged on cannabis because many do not allow citizens to place initiatives on the ballot. Most states that have liberalized their cannabis laws have done so through voter-led efforts.
But last year, New York and Connecticut passed legalization legislation, while New Jersey lawmakers approved a legal cannabis framework, carrying out a 2020 ballot measure allowing adult use.
Though the federal government continues to classify marijuana as an illegal drug with no medical uses, there are now 18 states nationwide that have embraced recreational legalization, representing nearly half the country’s population. Another 19 have enacted comprehensive medical programs.
Even staunchly conservative states like South Dakota and Mississippi have passed legalization referendums in recent years as statehouses drive the action without Washington’s help. The burgeoning industry took in $25 billion last year, with sales slated to top $40 billion by 2025.
Now, cannabis companies across the nation see the potentially multibillion-dollar tri-state market as a new engine of growth. Earlier this month, multistate operator Verano Holdings scooped up a New York license by acquiring Goodness Growth for $413 million. And two multistate operators — Ascend Wellness and MedMen — are locked in a contentious legal battle over a deal to acquire a New York license.
“Never before have I seen this great mass of new people that haven’t invested in cannabis [before] that are now looking” to enter the sector, Sullivan said, noting that New York City is the center of the finance, fashion and advertising sectors. “All those [industries] are already thinking of great ways to play.”
Garden State gets the jump
Before a single recreational-use shop opens in Manhattan, Northeast customers will likely flock to weed stores in the Garden State. New Jersey is poised to launch cannabis sales to anyone at least 21 years old well before its neighboring states.
Though the state blew a Feb. 22 deadline for launching its adult-use marketplace, Gov. Phil Murphy recently said that medical dispensaries could start selling to recreational customers “within weeks.”
That almost certainly means New Jersey will get a jump on seizing market share — and initial tax revenue from recreational sales….
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