For the second time in the past four months, cannabis business behemoth Curaleaf is reducing its cultivation footprint in one of the newest adult-use markets in the country.
The New York-based multistate operator, which has more than 5,000 employees nationwide, announced this week that it’s laying off 49 workers at its Winslow cultivation and production facility in southern New Jersey. This facility became fully operational in 2021 in anticipation of the state’s adult-use sales launch, which happened in April 2022.
The largest publicly traded cannabis company in the world by market cap, Curaleaf announced earlier this year (in March) that it would be ceasing its cultivation operations at an older cultivation facility in Bellmawr—also in South Jersey—in order to meet the company’s business needs in the state by streamlining its operations via the Winslow facility.
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But now, four months later, Curaleaf is reducing its workforce at Winslow to meet current market demand, which company officials say has fallen short of expectations, a spokesperson confirmed with Cannabis Business Times.
“Today we made the difficult decision to eliminate several positions at our Winslow production facility,” according to a company statement. “Curaleaf remains the market leader in New Jersey; however, we are scaling back production because we have ample supply to meet the market’s current needs. The reality is that after over a year of adult-use sales, the New Jersey market is struggling to grow at the rate once forecasted by state regulators and industry experts, as the result of regulatory delays that have slowed the opening of additional licensed dispensaries.
“The current 35 existing [adult-use] 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.”
Curaleaf operates a market cap of three dispensaries in the state, including in Edgewater Park, Bordentown and Bellmawr, which were existing medical cannabis retail locations that transitioned to adult-use sales last year.
While Curaleaf represents one of a handful of multistate operators at the three-dispensary limit, success for vertically integrated cannabis operators in New Jersey is highly dependent upon finding shelf space for their products outside of their own retail locations.
Although the New Jersey Cannabis Regulatory Commission (CRC) has received more than 2,000 applications from prospective cannabis businesses since 2021, including more than 1,000 for adult-use dispensaries, state regulators had 783 pending applications as of June 13, 2023, according to the commission. And among the 35 adult-use dispensaries that are open as of July 18, the majority are run by existing medical licensees who were grandfathered in.
The news of the Curaleaf’s workforce reduction comes as statewide sales have remained somewhat stagnant following the initial uptick from the launch in the second quarter of last year. Total cannabis sales—adult-use and medical combined—were $177.7 million in the third quarter of 2022, $182.4 million in the fourth quarter, and $179.3 million in the first quarter of 2023, according to the CRC.
States that launch adult-use sales often experience steady growth throughout the first year (as well as immediate subsequent years). But that has not been the case so far in New Jersey, a state of roughly 9.3 million people.
“Throughout the past year, we have voiced our concerns to the CRC about the difficult market conditions created in part by licensing approval delays, alongside lacking enforcement of the illicit market, and we have now proactively engaged them and organized labor in a dialogue about the changes we are making today,” according to the Curaleaf statement.
