NJ's State Department of Health Grants Three More Cultivation Licenses
On Tuesday, New Jersey's Department of Health announced that they've issued permits to three different companies that authorizes them all to begin growing medical cannabis at their registered cultivation facilities.
Per the official press release from the State's DOH, these permits were issued after comprehensive reviews including several site inspections, background checks of corporate officers and reviews of security operations and cultivation facilities.
Notable companies who had their application to New Jersey denied in the same December 2018 application process include Cresco Labs, Harvest Health & Recreation, Liberty Health Sciences, PharmaCann (who was to be acquired by MedMen until the deal was called off in October 2019), Surterra (a private, vertically-integrated operator with a presence in various states, including a robust retail portfolio in Florida -- only second to Trulieve), and Vireo Health.
According to New Jersey officials, all three companies will be eligible for a second permit that allows them to open their Alternative Treatment Centers ("ATC") -- or medical dispensaries -- pending their manufactured products being tested by state laboratory.
Afterwards, once the dispensaries are functional and subsequently inspected by State officials, the second permit will then be issued to the companies that enables them to officially begin operations, and dispensing medical cannabis products out of their respective ATC's.
To The Victor Go The Permits
iAnthus, who acquired MPX Bioceutical in an all-stock transaction back in October 2018, were awarded Tuesday with a permit to begin cultivation at their 33,000 square foot Pleasantville production facility. This facility, which also houses an extraction lab and kitchen, can be expanded up to 83,000 square feet.
Company officials believe the first harvest will bear fruit in the second quarter of 2020.
Additionally, iAnthus – pending state review – will be able to open and operate a dispensary in Atlantic City, a town that sees an estimated 24 million annual visitors. Planning to be up-and-running in the first quarter of 2020, the company's future 1,300 square foot storefront will showcase the company's retail branding "Be.".
Columbia Care's ~50,000 square foot production facility was also authorized this past Tuesday. The company's production facility, along with their approximately 4,000 square foot retail storefront, will be situated in Vineland, New Jersey. Vineland, with a population of nearly 60,000 per recent census estimates, is just 33 miles from Philadelphia, and less than 100 miles from Baltimore, Newark, and Jersey City.
Pending the successful acquisition of The Green Solution, a Colorado based company that they announced plans to acquire in November 2019, Columbia Care will now boast a retail portfolio of 86 total dispensaries in 17 total states and jurisdictions.
The third and final vertically-integrated license permit approval announced by New Jersey this past Tuesday belongs to Verano Holdings. Situated in a 120,000 square foot production facility in the town of Readington that previously housed a WalMart, Verano is able to immediately begin producing medical cannabis products.
Additionally, just like iAnthus and Columbia Care, Verano will be eligible to operate a
medical dispensary, pending state review, in the town of Elizabeth. As the company does in other markets where it offers retail storefronts, Verano plans to service New Jersey’s medical population under the retail brand of Zen Leaf. The company expects their dispensary to be open this Spring.
Verano Holdings, a Chicago-based vertically-integrated operator with a portfolio expanding throughout 11 states and territories, announced that they were being acquired by by Harvest Health & Recreation in an all-stock transaction initially valued at $850 million back in April 2019. The merger is still pending a successful closing.
Medical Program Overview
The most recent state data - from July 2019 - revealed that New Jersey's medical cannabis program had just over 67,600 patients. The state's Department of Health also noted that they see approximately 500 patients enrolling into the medical program per week. At present moment, there are just six active dispensaries serving the entire state.
The state also has more than 1,000 participating physicians and 17 qualifying conditions, including opioid use disorder, anxiety, post-traumatic stress disorder and chronic pain. More information about the New Jersey medicinal marijuana program can be found at www.nj.gov/health.
Renewed Push For Adult-use Legalization
Although Governor Murphy and others strongly advocated for legalization legislation in the state beginning in 2018, the administration conceded their push by March 2019 as they simply couldn't persuade a majority of State Senators to back the proposed legislation. However, on the heels of the collapse from their last legalization push, legislative leaders have since announced plans to place a referendum on the 2020 ballot.
Voting in late December 2019, the Democrat-led Assembly passed the measure 49-24, while the Senate passed the question 24-16. New Jersey residents will now be able to vote on adult-use legislation when they go to the polls later this year on November 3.
“My belief that our current marijuana laws have failed every test of social justice and that the right course is to legalize its use by adults has not changed. I am disappointed that we are not able to get this done legislatively and that our failed status quo – which sends roughly 600 people to jail a week for possession, the majority of them people of color — will continue. However, I have faith that the people of New Jersey will put us on the right side of history when they vote next November. By approving this ballot measure before the end of this legislative session, New Jersey will move one step closer to righting a historical wrong and achieving what I have spent more than three years advocating for.”
If approved by voters, this ballot initiative would legalize cannabis for recreational use for all persons over the age of 21 and would take effect on January 1, 2021. Additionally, the ballot measure outlines that there will be a state sales tax of 6.625 percent for recreational cannabis, while prohibiting any additional state sales taxes -- however, local governments would be permitted to add on an additional 2 percent sales tax. Lastly, New Jersey would earn the designation of becoming the twelfth state to legalize recreational cannabis.
For more information on the companies mentioned in this article, visit their respective investor profile page.
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