Despite New Jersey’s wealth and dense population, marijuana market not reaching potential
When New Jersey voters elected to legalize adult-use marijuana by an unprecedented 67%-33% margin in November 2020, it was widely hailed as a watershed moment in the development of the cannabis landscape in the United States.
New Jersey’s ideal location at the geographic center of the Northeast megalopolis, its status as the state with the second-highest income in the United States and its place as the most densely populated market in the nation were viewed as the perfect recipe for the commercial success of a regulated marijuana industry.
However, nearly five years after New Jersey voters signaled their desire for a robust marijuana marketplace, the state’s cannabis ecosystem remains underdeveloped.
An unfavorable market comparison
In 2025, New Jersey is on pace to generate $1.3 billion in cannabis sales.
By contrast, Missouri – a low-income state with 40% lower population than New Jersey and whose voters approved a recreational marijuana market a full two years later – will generate more than $1.6 billion in cannabis sales in 2025. That’s a whopping 25% more than New Jersey.
The stunted development of New Jersey’s cannabis market is the result of local and state policy decisions that unduly burden licensed marijuana businesses while ignoring, and often facilitating, the proliferation of illicit operators.
Moreover, a recent proposal by Gov. Phil Murphy to substantially increase cannabis taxes has the potential to further advantage the illicit market.
But if New Jersey begins to take affirmative steps to support its licensed marijuana businesses, its cannabis market might yet reach its immense potential.
Until then, its legal marijuana market will continue to underperform and its illicit market will continue to thrive.
High prices, too few cannabis cultivators
According to Connecticut-headquartered research and analysis company Cannabis Benchmarks, the wholesale price of marijuana in New Jersey is currently $2,600 per pound, substantially higher than the national average of $1,050 per pound.
New Jersey’s Cannabis Regulatory Commission (CRC) reports that the average cost of flower at the state’s marijuana retailers is approximately $10 per gram, two or three times the price in most mature markets.
Pricing remains high in New Jersey because of limited supply.
There are roughly 50 operational cultivators in New Jersey today, a remarkably low number considering most mature cannabis markets have several hundred licensed cultivation operations.
New Jersey’s municipal approval process for cannabis cultivators is significantly more cumbersome than other states, with more restrictive local ordinances, complex zoning hearings and burdensome community outreach requirements.