Cannabis Real Estate

A year ago, ZenLeaf in Elizabeth was one of 13 dispensaries that officially opened for recreational marijuana sales in New Jersey. Since then, sales have been nonstop, according to general manager Sonny Achrekar. “We’re always get new people in and now that the weather is getting better, we’re going to get all the people flying in because we get all the airport traffic. So it’s just consistent,” he said.

“The market is developing, and we don’t want to hinder that. The New Jersey canopy is currently only 418,000 square feet—far below the average of other states with legal cannabis,” said Commissioner Maria Del Cid-Kosso. “New Jersey currently has only one cultivation license for every 197,000 residents. The national average is one license for every 31,000 residents. We have a lot of room to grow. We expect that lifting the cap will open the space for more cultivators, ultimately resulting in more favorable pricing and better access for patients and other consumers.”

For cultivators who can overcome those headwinds, an attractive market awaits.

Will Perry, CEO of Oregon cultivator Magic Hour Cannabis, is working to launch production in New Jersey, teaming up with a local partner who has access to the necessary real estate.

Oregon marijuana prices have crashed, with the median wholesale price hitting $599 per pound in February.

In New Jersey, however, Perry expects premium marijuana could earn at least $4,500 per pound.

Atlantic City will be the future site of a state-of-the-art marijuana cultivation facility, according to a Thursday announcement from Vantage Commercial, which orchestrated the deal.

The addition of a cannabis cultivation facility run by Agri-Kind is expected to bring hundreds of jobs to the community and will support the growth of the cannabis retail businesses in the region.

Hundreds of businesses in New Jersey are one step closer to fully operating in the cannabis industry. Last month, the Cannabis Regulatory Commission approved nearly 300 additional conditional licenses, bringing the total to date to about 800. The CRC also approved the first 18 annual licenses.

As New Jersey approaches the end of its second year of medical and adult-use legalization, the access to compliant cannabis real estate is worrying some cannabis real estate professionals. With the extremely long lead times on securing and developing compliant cannabis real estate, new licensees face potentially high barriers to opening their doors promptly, risking the loss of invested money. For one cannabis real estate consultant, the reality is setting in — some new licensees may risk losing it all if they don’t source their property soon.

On Wednesday, October 26, 2022 at 7:00 pm at Somerdale Borough Hall, the Planning and Zoning Board will hear the application of Ivy Property Group LP, who will present an application requesting amended final site plan approval and preliminary and final site plan approval to permit the construction of a retail cannabis dispensary on property that has no current street address.

Although the council originally passed its cannabis regulations in 2021, it has been fine-tuning them ever since. The latest modification came after the city discovered that by restricting cannabis sales to H-C Highway Commercial and Selected Light Industrial District a small section along Avenue A was also included.

The latest change removes that area from consideration for those seeking to participate in the growing industry.

But there’s also bad news: when it comes to ensuring equity in the growing cannabis market in New Jersey, the gap is wide between promises made and promises delivered. A key policy goal touted by the state has been its commitment to creating a cannabis industry that benefits communities that have historically faced the disproportionate brunt of the war on drugs — mainly low income Black and Latino communities.

So, how much does it cost to operate a dispensary in New Jersey?

The cost of opening a dispensary in New Jersey is likely between $250,000 to $2,000,000. The variance is due to several cost factors, including where your dispensary is located and the type of license you acquire. Opening a micro business dispensary costs less than the projected amount.

What are some cost factors to opening a dispensary in New Jersey?

Some costs you will need to consider when setting up your budget include: