Curaleaf Holdings' (OTC:CURLF) founder and chairman Boris Jordan was one of many disappointed cannabis entrepreneurs who did not take the news well.

The New Jersey Cannabis Regulatory Commission took the decision on the grounds that, in the aggregate, cannabis operator in the state doesn't have enough capacity to serve the current medical market.

Following its midday meeting, the state regulator called a special meeting for April 11, where the issue will be revisited.

Recreational Sales To Launch By Mid-May

Cantor Fitzgerald's Pablo Zuanic said that recreation sales might begin in the Garden State by mid-May despite this setback.

"In practical terms, the CRC only has two weeks to check operators' capacity and ability to supply the med market," the analyst said in his latest note. "Because of probably significant political pressure and lobbying, we are of the opinion some incumbents (not all) will get the green light on 4/11."

"If for any that are still not there, hopefully (they'll be) ready for conditional approval pending certain timelines and regulatory milestones that we can work to get done."

Still, Zuanic questions the "motivations/intentions of the CRC and constant delays."

Without having all the facts, it would seem the CRC may want to delay the rec head start for med incumbents in order to narrow the gap with new social equity applicants starting operations," he added.

Either way, New Jersey is still on track to beat Massachusetts in terms of launching the marijuana recreational market after voters approved it via the ballot box in November 2020, the analyst noted.

Conditional Licenses

Separately, the commission unanimously awarded the first 68 conditional licenses to adult-use cannabis cultivators and manufacturers, including 50 cultivators and 18 manufacturers, reported Politico.

 Zuanic said these businesses will not be ready to supply the market until the first half of 2023.

"If the newly approved licensees submit their application by March 31, are approved by April 31, the only thing preventing them from starting would be build out and receiving local permits," the analyst added.