Acreage Holdings (ACRG.U) hopes to leverage their newest acquisition, the medical cannabis non-profit Compassionate Care Foundation (CCF) to get access to the New Jersey cannabis market.
Today’s acquisition gives Acreage entrance into the New Jersey cannabis market, which with its population of nine million people is estimated to bring in $317 million in legal medical cannabis sales by 2022, according to Arcview Market Research.
“This reorganization will result in increased access to affordable medical cannabis for New Jersey’s existing patients in short order. Moreover, we have long believed that upon adult-use legalization, the New England and Mid-Atlantic regions will be the pre-eminent cannabis market in the U.S. and Acreage is best positioned of any U.S. cannabis company to benefit,” said Kevin Murphy, chairman and chief executive officer of Acreage.
CCF’s vertically integrated operations include licenses for cultivation, manufacturing & processing, and three retail dispensaries.
Here’s what they do:
Cultivation: CCF operates one of New Jersey’s largest indoor growing facilities in Egg Harbor, New Jersey, growing high end flower. Acreage and CCF plan to expand this facility to serve the existing demand for medical cannabis and in anticipation of adult-use legalization.
Retail Dispensary Operations: CCF has the potential to operate three retail dispensaries, one of which is currently in operation in Egg Harbor. An additional dispensary is under construction in Atlantic City as The Botanist, and an letter of intent has been signed for another The Botanist dispensary in Williamstown, New Jersey.
Revenge of the NIMBYs
You would think that the state that holds Atlantic City wouldn’t have a hard time legalization recreational cannabis, especially given the financial bump it’s given Nevada. But nonetheless, New Jersey has proven to be a tough nut to crack in terms of facilitating a legal recreational market.
Medical cannabis has been legal since 2010, when outgoing governor Jon Corzine signed the Compassionate Use Medical Marijuana Act, permitting medical cannabis use for people with a long list of nasty diseases ranging from cancer to Lou Gerhig’s disease, and any terminal illness. You couldn’t grow your own cannabis, and therefore had to source it through “alternate treatment centres” licensed by the state.
Sounds familiar. We had something like that up here for years.
What isn’t familiar, however, is the sheer amount of popular resistance cannabis will have to overcome in New Jersey to reach full legalization. Most of Canada shrugged their shoulders when it came to cannabis, with large pockets of the country effectively giving it a de facto legal status with cops looking the other way. That won’t be happening in New Jersey.
In May 2017, a democratic senator introduced recreational-use legislation, it ended up mired in political hell until Republican tool Chris Christie left office, but it failed in 2018, and then again in 2019. It will be back on the ballot in 2020.
But failure at the legislative level doesn’t necessarily reflect the will of individual municipalities. In this case, many of the municipalities don’t want it legalized either.
Although the legalization bill did not survive the state legislature in 2018, a handful of municipal governments in New Jersey enacted legislation that would further ban or restrict cannabis sales and use.
The municipality of Freehold, for example, banned the sale of all cannabis (recreational or medical), while Oakland banned retail stores, cultivation facilities, manufacturing, testing, social clubs, cultivation, possession, storing, testing, labeling, transport and delivery, dispensing and distribution, but exempted medical cannabis dispensaries and uses.