New Opportunities for NJ’s Legacy Cannabis Businesses
Since the legalization of marijuana in New Jersey, many legacy operators are wondering if they should stick with the black market or go legal. It’s a tough decision for any business owner, but luckily, the Garden State is working on some unique benefits that will make it easier to decide.
Recreational Cannabis Focusing on Opportunities for Legacy Operators
The best way to handle the black market is to make it so enticing to shift to the legal industry that it doesn’t make sense to continue operating outside of the law.
This is what New Jersey aims to do.
According to Northstar Financial, illicit cannabis dealers in New Jersey will have the opportunity to become part of the legal cannabis sector. These budding ganjapreneurs will be offered the chance to rise above the hardships caused by prohibition through cannabis-related entrepreneurial ventures.
The success of legal marijuana in New Jersey will depend on how well the state manages to do just that. The War on Drugs is no longer a priority, but for the cannabis market in NJ, there’s still one big threat: black markets. With this being the case, the best way to challenge the illicit markets is to offer more opportunities for the people impacted most by prohibition.
Provisions for Minorities in New Jersey’s Cannabis Space
New Jersey plans to provide provisions for supporting minorities. This will involve offering support to those who’ve been incarcerated to give them more opportunities to work with cannabis.
The state could also give an amnesty period for legacy operators, enticing many to leave the black market early on. However, with the high costs of operating a legal cannabis venture, it’s easy to see why some will hesitate.
Going legitimate isn’t easy. But the state is trying to make it more straightforward for the people impacted most by prohibition. Since the black market has historically challenged the legal cannabis sector, the idea to eliminate it initially stands to ensure legal adult-use cannabis thrives in New Jersey while offering much-needed tax revenue. However as seen in other sectors, legalizing and enforcing proper accounting practices comes with its own issues.
The illicit market lacks regulation, which makes it cheaper to operate a legacy cannabis operation. However, these businesses aren’t easy to scale, especially when considering the role law enforcement plays. But, while these business operators are taking on more risk, they’re able to remain competitive.
The Problem with the Legacy Market
The price of cannabis flower is artificially inflated through taxation and compliance-related expenses. For instance, in California, when recreational cannabis was legalized in 2018, the state expected a massive turnout for it. The sales fell that year, which left many legitimate cannabis operations shattered.
The main issue here was that the taxes found throughout the supply chain made cannabis flower around 80 percent more costly than anything the black market had for sale. Thus, the high cost was one that many people were unwilling to pay. Without a way to compete on pricing, this can cause many legitimate cannabis business operators to fail.
For the legacy operators still working in New Jersey, your chance to go legitimate is here. As the adult-use market in the Garden State becomes better established, many consumers will pivot to purchase at dispensaries. Even though the prices will be higher, the safety is appealing to many people.
If you’ve been wildly successful operating in the legacy market, perhaps it’s best to quit while you’re ahead. While it’s more expensive to sell cannabis legally in New Jersey, the risks are far less, and you’ll have more potential to scale your business.