New Jersey Celebrates 1st Adult-Use Anniversary With Zero Black-Owned Dispensaries Outside Medical Market

Charles Barker said "nay" time and time again during the New Jersey Cannabis Regulatory Commission’s (CRC) regular meeting April 14—seven straight times to be exact.

The votes? To approve annual adult-use license renewals for seven of the biggest multistate cannabis operators (MSOs) in the world: Acreage Holdings, Ascend Wellness, Columbia Care, Curaleaf, Green Thumb Industries, TerrAscend and Verano.

While the other four CRC commissioners asked questions of representatives from those companies—from bargaining agreements with unions to money spent on social equity initiatives—and often added context to their votes, Barker remained mute during the process other than to verbally cast his votes against the license renewals.

The seven companies, grandfathered in from New Jersey’s medical cannabis program, were the first to market when adult-use sales commenced April 21, 2022. Their annual license renewals were required ahead of the state’s one-year anniversary in order to continue selling cannabis to adult-use customers.

Despite Barker’s no votes, all renewal motions passed with the exception of Curaleaf’s resolution. The CRC held an emergency meeting three days later and voted, 4-1, to renew the company’s adult-use licenses under certain conditions that must be met by June 1.

RELATED: Curaleaf’s New Jersey Licenses Renewed With Conditional Approval During Emergency Meeting

While Barker did not provide explanation for his voting record April 14, comments he made during the CRC’s regular meeting in March offer context to his stance.

“I’m just very concerned,” he said March 2. “We’re at another month, another meeting, and based on my review, 11 of the 14 annuals up for proposed awards today are majority owned by white applicants. There are zero majority owned by Latino/Latina applicants. And there is one out of 14 majority owned by a Black applicant. And I hope we can do better. I’m confident we can do better. I know we want to do better. And I’m looking forward to that.”

His comments came before the board of commissioners voted to approve the 14 annual license applications for adult use, nine of which were for retail operations. Annual licensure is the final step of regulatory approval from the state before becoming operational, granted applicants also need local approvals. 

Some New Jersey applicants choose to pursue conditional licenses first—which provide certain flexibilities, like changing locations—before converting to annual licensure.

After Barker’s comments, CRC board Chair Dianna Houenou asked him to clarify the “we,” because “obviously ‘we’ as board members can’t control the makeup of these businesses,” she said.

“When I say ‘we,’ I mean the entire CRC: the board [and] the staff together prioritizing and promoting awardees that reflect the diversity and inclusion that we say we want to see, prioritizing those most harmed by the failed war on drugs, especially our Black and Brown people,” Barker said. "We have expressed that. We have exhaustively reiterated to the public that this is our commitment. And we’re working [on] it. It’s just not being reflected in our proposed awards. And so, I would like a better understanding of why, and I’m hopeful that we can get there.”

In New Jersey, Black people were 3.5 times more likely to be arrested than white people per 100,000 population between 2010 and 2018, specifically with Hunterdon County in the northwest part of the state having the highest racial disparity with Black people 13.7 times more likely to be arrested, according to the American Civil Liberties Union. Cannabis-related arrests largely contributed to these rates.

In addition, New Jersey has the highest racial disparity rate in the U.S. for its prison population, with Black residents incarcerated at a rate 12.5 times that of white people, according to a 2021 report from The Sentencing Project that cites 2019 Bureau of Justice statistics. Again, cannabis-related arrests contribute to this disparity.

While New Jersey launched commercial adult-use sales via seven vertically integrated medical operators being the first market, the CRC’s focus on equity remains a work in progress a year later.

When Gov. Phil Murphy signed in 2021 the Cannabis Regulatory, Enforcement, Assistance, and Marketplace Modernization (CREAMM) Act—New Jersey’s adult-use legislation—Impact Zones were established to identify communities disproportionately affected by the drug war for particular consideration in the state’s burgeoning cannabis market.

Specifically, people from these zones, which include 87 of New Jersey’s 565 municipalities, were to be given preference in cannabis licensing, and their communities were to be prioritized for allocation of revenues generated from cannabis sales.

More than two years after Murphy signed the CREAMM Act, and a year since adult-use sales commenced, there are 24 adult-use dispensaries open in New Jersey, according to the state’s Office of Information and Technology. Twenty-one are owned by eight of the largest publicly traded cannabis companies in the world; two BLOC dispensaries are owned by MSO Justice Cannabis Co., and one Harmony Dispensary in Secaucus is operated by CEO Shaya Brodchandel.

New Jersey’s adult-use marketplace has yet to include a Black-owned dispensary that is open for business. This comes at a time when New Jersey’s licensed retailers are capitalizing on millions in expanding sales revenues.

RELATED: New Jersey Sold Nearly $555 Million in Cannabis in 2022

In the medical market, Suzan Nickelson became the first Black woman dispensary owner when she opened her doors to Holistic Solutions in February in Waterford. Nickelson, who was awarded a medical dispensary license in 2019, was approved April 14, 2023, to expand Holistic Solutions’ license to adult use, putting her on track to become the first Black-owned retailer to sell adult-use cannabis in New Jersey. Holistic Solutions has yet to announce the date it will begin serving adult-use customers.

During the CRC’s meeting in March, Barker told his peers on the board that the state’s market “demands” more Black-owned cannabis businesses.

Chairwoman Houenou said she believes the entire board of commissioners shares Barker’s vision in wanting to see a diverse industry. “But, at the end of the day, the CRC cannot control or dictate who exactly is submitting the applications,” Houenou said.

The lack of diversely owned businesses currently operating in New Jersey’s cannabis market does not come without an interest from aspiring entrepreneurs.

As of Feb. 13, 2023, diversely owned businesses made up 72% of the 1,647 adult-use license applications submitted to the CRC, which included 940 retailer applicants, 415 cultivator applicants and 253 manufacturer applicants. In addition, 25% of the applicants (413) qualified as social equity businesses and 43% (706) were for businesses in Impact Zones.

And while the CRC’s focus on equity is still unfolding in regard to vetting and approving potential market entrants, those who do receive their annual licensure are still up against navigating capital raises, local ordinances and other red tape before setting their business plans in motion.

During the CRC’s most recent board meeting April 14, the commissioners approved adult-use annual licenses for one cultivator, one testing laboratory and seven retailers, including Simply Pure Trenton NJ Inc. and The Cannabis Place 420 Corp.—both are diversely owned businesses that received their conversions from conditional licensure.  

RELATED: From Budtender to Dispensary Owner

As businesses like Simply Pure Trenton and The Cannabis Place continue to work toward opening their cannabis facilities, Barker suggested during the March meeting that the CRC take a step back from issuing licenses and/or renewals to non-equity applicants until the proper foundation is in place for an inclusive industry.

“I do believe the CREAMM Act gives the CRC the authority to determine and make decisions based on what the market needs and what the market demands,” Barker said. “Some of the main reasons why we legalize cannabis in every state is to address the harm to certain groups, specifically Black and Brown groups. And the market needs and demands more Black and Brown businesses in order to establish an equitable foundation.”

Barker said there’s a difference between creating market opportunity and equitable market opportunity, and that he believes the CRC has the statutory authority to adjust the rollout of the adult-use market accordingly.

“If we’re not seeing [equitable market opportunity], I do think we can be more patient until it’s a more level playing field so that when we propose awardees, there’s parody and people are starting on equal footing,” he said. “And that’s the point that I’m trying to express.”

The CRC could certainly be more patient, Vice Chair Sam Delgado said. But how does the board know if New Jersey businesses can be patient, too, Delgado asked.

“These businesses, they have to pay their landlord; they have to pay their legal fees; they have to pay the consultant fees,” Delgado said. “For example, in this [proposal], there is only one African American business majority owned. But if we had moved against that and not approved this, that one African American business wouldn’t be able to open a business. … So, we have to be judicious in our approach.”

The board of commissioners voted, 4-1, to approve the 14 annual adult-use license applicants in that resolution. Barker cast the dissenting vote.

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