5 Cannabis MSOs Fined $360K in New Jersey; 2 Companies Respond
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5 Cannabis MSOs Fined $360K in New Jersey; 2 Companies Respond

The state’s Cannabis Regulatory Agency cited Acreage, Ascend, Curaleaf, GTI and Verano for adult-use transactions during medical-only hours.

June 24, 2022

In February, New Jersey cannabis regulators delayed rolling out adult-use cannabis sales on the premise that existing medical retailers did not have the capacity to serve both customer types at that time.

Two months later, when the state’s Cannabis Regulatory Commission (CRC) approved seven of New Jersey’s 11 medical cannabis operators to expand their operations to serve the broader adult-use market during an April 11 public meeting, state officials expressed confidence in those companies to continue prioritizing the needs of medical patients. At the time, there were 120,000-plus registered patients with 17 qualifying conditions, according to CRC.

And when those seven companies officially opened their doors to adult customers at 12 of the state’s 24 retail locations on April 21—making New Jersey the 14th state to launch commercial adult-use sales—it was a day of celebration in the Garden State. It also was a day that some of the largest cannabis operators in the U.S. vowed that patient care under New Jersey’s medical program would remain a top priority.

RELATED: New Jersey Adult-Use Cannabis Sales Have Commenced

What about the long lines associated with an adult-use program launch?

Two patient-only hours per day was the answer (often, the first hour and last hour of operation are reserved for medical patients at a dispensary).

But five of the seven companies to launch adult-use retail operations on April 21 were later fined a combined $360,000 by the CRC for allegedly not honoring those medical-only hours: Verano Holdings ($90,000), Green Thumb Industries ($80,000), Ascend Wellness Holdings ($80,000), Acreage Holdings ($60,000) and Curaleaf ($50,000), as reported by Bloomberg.

The fines came at a rate of $10,000 per day for each day the alleged violations occurred from April 21 to April 29, the news outlet reported.

The other two companies participating on launch day, Columbia Care and TerrAscend, were not cited.

In a prepared statement to Cannabis Business Times from Curaleaf’s Stephanie Cunha, the company’s regional director of public relations, the multistate operator (MSO) with 134 dispensaries nationwide, as of June 16, took ownership of the infractions.

“Curaleaf acknowledges responsibility for these citations and have paid our fines to the state,” the statement read. “During the first few days of adult-use sales in New Jersey, we were responding to the overwhelming lines and demand at our facility for adult use. Because of sales and events leading up to the first days of adult-use sales, a vast number of our medical patients had stocked up on products before the 21st, resulting in virtually no lines at our facility at the time. Medical patients who came to Curaleaf during these days were immediately prioritized over recreational consumers and served almost immediately with no wait. We continue to prioritize our medical patients and are now living up to our promise to provide two designated hours to the medical community at each of our locations every day.”

Curaleaf’s citations came at its Bellmawr location in South Jersey, where the company’s retail team processed 142 adult-use transactions during medical-only hours on opening day, according to public documents from an open records request, Bloomberg reported. Combined, the five companies allegedly processed roughly 3,200 adult-use transactions during hours that were reserved for medical patients over the first nine days of the program rollout.

Those transactions were “to the detriment of the medicinal patient population,” CRC Executive Director Jeff Brown wrote in violation notices sent to the companies on May 13.

Also responding to the citations in a prepared statement to CBT was Sharon Ali, a Mid-Atlantic regional general manager at Acreage, which began selling cannabis to adult-use customers at its The Botanist dispensaries in Egg Harbor Township and Williamstown (both in South Jersey) on April 21.

“Turnout at The Botanist locations in Williamstown and Egg Harbor Township during New Jersey’s adult-use opening was above and beyond our expectations, with customers forming lines around the block,” Ali said. “Even with the long lines, our commitment to our patients and customers is—and will continue to be—paramount. Our staff takes extra time and care to ensure every guest has their questions answered and needs met, when they visit our stores.”

Acreage’s retail teams allegedly recorded a combined 257 transactions to adult-use customers during medical hours on the first day at their Egg Harbor and Williamstown locations, according to the CRC citations.

“The staff’s attentiveness led to some adult-use customers remaining in-store for a limited time after our dedicated patient-only hours began,” Ali said. “The Botanist was among the inaugural group of cannabis operators permitted to commence adult-use sales in New Jersey. There are hurdles and challenges in being first, but The Botanist is committed to progressing our industry positively, remains focused on keeping patient-only hours exclusive to patients and remains committed to maintaining the best processes during the industry’s transition, which will satisfy the state, our patients and adult-use customers.”

Spokespeople from Verano, Green Thumb Industries (GTI) and Ascend Wellness did not respond to CBT requests for comment at the time this article was first published.

Verano opened its Zen Leaf dispensaries in Elizabeth and Lawrence Township (Central Jersey) to adult-use customers on April 21. In North Jersey, GTI’s RISE dispensaries in Bloomfield and Paterson, and Ascend’s location in Rochelle Park also did.

While CRC officials required existing medical retailers to ensure they’d provide at least 14 patient-only hours per week before approving them for expanded adult-use operations, regulators also considered exclusive parking options and point-of-sale systems for patients, express access so patients don’t have to wait in long lines, and the ability for patients to reserve products ahead of time.

In addition to the original seven companies that expanded their operations at 12 stores on launch day, Miami-based MSO Ayr Wellness opened three Central Jersey dispensaries in Woodbridge, Union and Eatontown to adult-use customers on June 15.

While 16 of New Jersey’s 24 medical cannabis retail locations have now expanded to serving adult-use customers, as of June 24, additional adult-use retail licenses will be awarded to those without existing medical operations. CRC officials began accepting applications for those potential operators on March 15 and received 232 submissions in the first three days.

Those applications will be reviewed on a rolling basis without a limit yet established for adult-use retail licenses in the state.