This Emerging US Cannabis Market is Growing Like a Weed!!!

Earlier this year, New Jersey started to allow for the sale of recreational cannabis and we have been closely following the market since then.

Last week, the New Jersey Monitor published a report on the amount of tax revenue that has been generated from the sale of recreational cannabis and announced that the state generated $4.6 million in tax revenue in the first 10 weeks.

According to New Jersey’s Cannabis Regulatory Commission, the state sold approx. $80 million if recreational cannabis between April 21^st and June 30^th.  Since the launch of the program, the number of dispensaries that are allowed to sell recreational cannabis in New Jersey has increased. We attribute the increase in recreational cannabis revenue to the increase in the number of dispensaries in the state.

We believe the increase in the number of dispensaries has improved accessibility for recreational cannabis consumers and are bullish on this trend. Going forward, as more cannabis businesses become operational the amount of time it takes consumers to make purchases will shorten and expect saturation to start to impact the market soon.

We have seen a similar trend in Illinois’ recreational cannabis industry and expect the trend to play out as each state market starts to scale.  In Illinois, the amount of recreational cannabis sales has increased on year-over-year basis. At the same time, the number of recreational cannabis products sold has grown even faster on a comparative basis and we believe our readers need to be aware of potential price compression.

Although it will take some time for saturation to impact New Jersey operators, we believe it is a reality and only a matter of time. As saturation becomes reality, we expect to see margin pressure for operators in New Jersey and will closely monitor how this market evolves over the next year.

On April 21^st, New Jersey started to allow for the sale of recreational cannabis and the industry generated approx. $24 million of revenue in the first month. We were less than impressed with the performance of the market and are glad to see an increase in the number of operational dispensaries in the state.

When the market opened, 12 dispensaries were licensed to sell recreational cannabis. Now, there are 18 licensed dispensaries in New Jersey and we expect this number to increase before the end of the calendar year.

If you are interested in learning about cannabis companies which are levered to New Jersey, please send an email to support@technical420.com with the subject “New Jersey Cannabis Operators” to be added to our distribution list.

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Michael Berger is Managing Partner of StoneBridge Partners, LLC and Founder of Technical420.com. Prior to entering the cannabis industry, Michael was an Equity Research Analyst at Raymond James Financial covering the Energy Sector. Michael has been featured in publications such as The Street, Bloomberg, US Money News, and hosts various cannabis events across North America.

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