New Jersey Marijuana Supply Levels Remain In Question As Curaleaf Moves To Lay Off Workers At Cultivation Facility

“As with all kinds of businesses, performance against increased competition and customer choice will determine success.”

By Sophie Nieto-Muñoz, New Jersey Monitor

The decision by New Jersey’s largest marijuana company to curtail production at its second growing facility in four months is raising questions about New Jersey’s marijuana supply.

Curaleaf announced last week the company is laying off 49 people at its Winslow Township plant, citing an “ample supply” of marijuana to meet the market’s current needs. But marijuana advocates argue that the claims of sufficient cannabis supply are not in line with stubbornly high prices in New Jersey, and that shutting the Winslow facility will create problems for consumers as more small dispensaries open.

“You don’t need an economics degree to understand that you’re not getting a good deal in New Jersey,” said Chris Goldstein, a regional organizer with the National Organization for the Reform of Marijuana Laws. “It doesn’t make any sense for them to be closing the grow and laying off all these employees, just as small businesses get their licenses and could be buying these products.”

New Jersey has some of the most expensive marijuana in the country. An eighth ounce of recreational marijuana at Curaleaf stores in New Jersey costs up to $60. That compares to $40 on the underground market. And in other states seeing a massive oversupply of marijuana, like Oregon, Curaleaf sells eighths for as low as $10.

So why are New Jersey consumers shelling out so much while Curaleaf closes facilities claiming there’s more than enough weed in the state? The advocates pointed to the unknown state of New Jersey’s supply and overwhelming corporate control of the industry.

Leo Bridgewater, a longtime cannabis activist, said if New Jersey has so much cannabis that Curaleaf can shut down two growing facilities, prices here should be lower. He said what the company is saying and what they are doing are “two very different things.”

“This is definitely more a reflection on Curaleaf as a company than the New Jersey cannabis industry as a whole,” Bridgewater said.

Curaleaf’s move to close its Winslow operation comes four months after the state Cannabis Regulatory Commission yanked Curaleaf’s annual licenses at three facilities over claims it clashed with unionization efforts and a lack of transparency with state officials. Four days later, the agency reversed its decision and renewed the licenses.

In a statement, Curaleaf CEO Matt Darin said the company complained to the commission about the “difficult market conditions” in New Jersey, noting delays in license approvals and a lack of enforcement of the illicit market.

“The current 35 existing licensed dispensaries in New Jersey are insufficient to meet the needs for a state this size and far fewer than what were led to believe would be opened. These market realities make it unsustainable to continue producing cannabis products at current levels, compelling us to scale back production,” he said.

The commission disputes Curaleaf’s claims about New Jersey’s market, saying the commission believes it is “growing substantially,” Spokeswoman Toni-Anne Blake pointed to 138 new licenses approved for manufacturing or retail businesses that could be potential Curaleaf customers.

“As with all kinds of businesses, performance against increased competition and customer choice will determine success,” Blake said, adding the agency anticipates “continued growth.”

Recreational cannabis sales totaled roughly $474 million in the last 12 months, she said.

Goldstein regularly keeps track of New Jersey menu prices and said he hasn’t found a substantial dip in prices since the recreational industry launched in April 2022. He noted that multistate operators—corporate cannabis companies—hold the 15 functioning cultivation licenses. They provide marijuana to the whole state, limiting choices for consumers, he added.

Goldstein wants the state to publish data on its supply and wholesale pricing. He pointed to Pennsylvania, where the top medical marijuana official criticized dispensaries for overcharging consumers last year. Weeks later, dispensaries dropped their prices.

“There’s two words that really describe this type of behavior: market manipulation,” he said. “Unfortunately, we’ve gotten used to this in New Jersey’s cannabis industry.”

Curaleaf declined to comment when asked about its supply of cannabis. The commission declined to share details about the state’s marijuana supply.

Bridgewater defended the Cannabis Regulatory Commission, saying many of the delays in increasing the number of retail locations are out of its hands. He cited the overwhelming number of New Jersey towns that have opted to ban dispensaries.

He also argued that it’s too early for there to be much useful data on the state’s cannabis supply. He said he hopes the commission is tracking supply and will share the information when it shows a complete picture.

“I would like that data…but when you’re only a year out, I mean, we only have 35 retailers and we’re 15 months out. It’s not enough of a sample size for me to make a decision, or to take away much from,” Bridgewater said.

This story was first published by New Jersey Monitor.