New Jersey's Cannabis Market Lags Peers, Says Cantor Fitzgerald
New Jersey voters will decide Nov. 3 whether to legalize recreational cannabis.
If it's approved, New Jersey would become the first state in the Mid-Atlantic to legalize adult-use marijuana.
Nevertheless, speakers at the NJ Cannabis Insider conference held on Tuesday weren’t too optimistic about the legalization, Cantor Fitzgerald’s Pablo Zuanic in a Tuesday note.
Even if recreational use is legalized, there's likely to be a substantial lag time, moderators at the conference said. For example, the first adult-use stores in Massachusetts opened nearly two years after legalization.
'Lack Of Supply, Long Lines, High Prices, Distant Stores'
New Jersey is known for lagging behind other states with medical cannabis, mainly due to its shortage of dispensaries, Zuanic said.
To overcome the issue, the state would need to significantly increase the number of stores and legalize recreational use, the analyst said.
"So, a key complaint from the conference participants was about lack of supply, long lines, high prices, and distant stores (seven for the entire state at present)."
While New Jersey could see 11 stores in total by this summer, that number is still very low compared to other states, representing 1.2 stores per 1 million people, Zuanic said.
Those few stores can experience a considerable income, he said.
Curaleaf generated $19 million last year from its one New Jersey store, representing 20% of the company's revenue, the analyst said.
"We estimate the med market in NJ remains under penetrated vs. peers, with per capita medical cannabis spend in 2019 only in the mid-teens ($15)compared with $22 IL, $30 in MI and FLA, ~$50 in MD and CO."
© 2021 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.