Sure, Pot Is Authorized. However It’s Additionally in Brief Provide in NY and NJ

In New York and New Jersey, the race is on to develop authorized weed.

In Orange County, N.Y., there are plans to construct a big hashish cultivation and processing plant on the grounds of a defunct state jail.

About 25 miles south, over the border in New Jersey, an industrial complicated as soon as owned by the pharmaceutical large Merck shall be transformed into a fair larger marijuana-growing hub.

In Winslow, N.J., about 30 miles outdoors Philadelphia, a brand new indoor cultivation complicated simply celebrated its first harvest.

The appearance of legalized adult-use marijuana in New York and New Jersey is an entrepreneur’s dream, with some estimating that the potential market within the densely populated area will soar to greater than $6 billion inside 5 years.

Because marijuana is illegal under federal law and cannot be transported across state lines, marijuana products sold in each state must also be grown and manufactured there.

Federal banking law also makes it nearly impossible for cannabis-related businesses to obtain conventional financing, creating a high hurdle for small start-ups and a built-in advantage for multistate and international companies with deep pockets.

Oregon, which issued thousands of cultivation licenses after legalizing marijuana six years ago, has an overabundance of cannabis. But many of the other 16 states where nonmedical marijuana is now legal have faced supply constraints similar to those in New York and New Jersey as production slowly scaled up to meet demand.

“There’s always a dearth of flower in a new market,” said Greg Rochlin, chief executive of the Northeast division of TerrAscend, a cannabis company that operates in Canada and the United States and this month opened New Jersey’s 17th medical marijuana dispensary.

In New York, where the medical marijuana program is smaller and more restrictive than New Jersey’s, the menu of products includes oils, tinctures and finely ground flower suitable for vaping. But the sale of loose marijuana buds for smoking is prohibited, and only 150,000 of the state’s 13.5 million adults who are 21 or older are registered as patients.

With modest demand, there has been little incentive to boost supply. Until now.

Adult-use marijuana sales could begin within a year in New Jersey and in early 2023 in New York, industry experts predict.

“I would be a fool not to be making the product,” said Ben Kovler, the founder and chief executive of Green Thumb Industries, a cannabis company with operations in both states.

With fewer overhead costs, and a smaller carbon footprint, hemp farmers who expand to grow cannabis for certain uses may even be able to undercut indoor-facility prices for at least part of the year, officials said. Hemp, which has much less of the intoxicating chemical found in cannabis, THC, is used to make CBD oil.

New York’s law also permits individuals to grow as many as six marijuana plants for personal use; New Jersey’s legislation does not allow so-called home grow.

In the coming months, both states are expected to issue regulations to govern the new industry. Each has framed legalization as a social justice imperative and has dedicated a large share of the anticipated tax revenue to communities of color disproportionately harmed by inequities in the criminal justice system.

Trying to balance the goal of building markets focused on social and racial equity against the inherent dominance of multistate corporations with early toeholds in the region will be crucial, officials in New York and New Jersey said.

“They should have that ability to help jump start the market,” Norman Birenbaum, New York’s director of cannabis programs, said about the 10 medical marijuana companies already licensed to operate in the state. But it should not come “at the expense of new entrants,” he said.

Jeff Brown, who runs New Jersey’s cannabis programs, said the market has room — and a crucial need — for newcomers.

The state’s current operators, he said, “are not by themselves going to be able to supply the personal-use market.”

TerrAscend’s new dispensary, in Maplewood, N.J., drew a line of customers within hours of opening earlier this month.

Stuart Zakim, one of the first people in line, talked to a cashier — the “budtender” — about alternatives to the product he originally requested but was told was not in stock.

“You’re not waiting in the dark for your dealer anymore,” said Mr. Zakim, a longtime medical marijuana patient. “You’re walking into a beautiful facility.”

“The supply issue,” he added, “is really the biggest issue.”

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