Tag Archives: new jersey

The Cannabis Retailer’s Survival Guide to 2026

By Pam Chmiel
No Comments

2025 saw most businesses scrutinizing their operations to trim margins and survive the tumultuous market. 2026 is about digging deeper to uncover hidden costs that will further improve their bottom line.  

Tom Zuber, partner at Zuber Lawler, led a panel discussion at the recent IgniteNJ event, where experts offered advice on margin discipline and where to cut costs.

 

What to Consider When Entering A New Market

Trent Woloveck, Chief Strategy Officer at Jushi Holdings, says retailers entering a new market must evaluate three core cost centers: labor, compliance, and real estate.

Operators should closely analyze traffic patterns, peak hours, and staffing models to understand true operating costs and potential revenue. Retail, he notes, is a people-centric business where customer experience cannot be sacrificed, even in a margin-compressed environment.

Engaging with local authorities and community leaders is essential for educating lawmakers and shaping favorable, reasonable legislation. Woloveck emphasizes the importance of being a responsible operator so that regulators do not feel as though the sky is falling simply because they legalized medical and/or adult-use cannabis.

When it comes to real estate, Woloveck stresses the importance of a “main on main” location with high traffic counts, adequate parking, and strong signage, while keeping rent between 3% and 5% of total projected revenue as a benchmark for profitability. He acknowledges that securing prime locations remains one of the harder costs to control, largely because many landlords near malls or carrying mortgages on their properties are still unwilling to lease to cannabis operators. Woloveck is optimistic that federal rescheduling will expand that pool of willing landlords, increasing supply and putting downward pressure on rents. He draws a parallel to COVID-era lease concessions that proved beneficial for operators in markets like Virginia.

 

Battling Price Compression

While retailers are combating price compression that is driving down basket size, Travis Scadron, EVP at Surfside, suggests other ways to increase margins by passing merchandising costs onto brands and monetizing the real estate on your website. He cites Amazon as an example, noting that 68% of the profit on Amazon’s e-commerce platform comes from advertising sales. He stressed the importance of pushing the right products at the right time and with the right pricing.

Trip McDermott, COO of Verano, a vertically integrated operator, says the company is seeing margin erosion across all areas of the supply chain. He specifically pointed to cultivation, noting that labor prices are rising, as are input costs such as salts, nutrients, and coco. On the retail side, he said labor costs are also increasing, compounded by mounting pressure to discount.

“So, there’s erosion happening everywhere, but it’s where you can control part of that erosion, which is going to be around reducing turnover of your employees, trying to get more out of them, continuous training so you’re not having to rehire, improving efficiencies so that you’re getting more units per head out of all those employees,” he advised. “Automate where you can without sacrificing quality, and really look into the data to understand where there’s opportunity for improvement,” he added.

McDermott highlighted extraction processes as an area where costs are easily overlooked. Operators who are not capturing data on their extraction yields may be quietly eroding their margins without realizing it. Key questions to ask include: What are your inputs? Is it trim or flower? What are the yields on the other end of the extraction process? “I would say that’s an area for improvement, a lot of operators should really focus on,” said McDermott. “Capturing that data is not only important for fully understanding your cost of goods, but it also adds up to a lot of money at the end of the day.”

 

Customers First

Krista Raymer, Chief Strategy Officer at C3 Industries, cautions operators against cutting costs in areas that directly impact the customer experience. In a market where a core group of loyal customers drives the bulk of transactions, she argues that retaining existing customers is just as important as acquiring new ones. Labor reductions, shifts in inventory assortment, and changes to the marketing mix can all have unintended consequences for the in-store experience if not carefully considered in advance.

 

The Hidden Risks of Inventory

On the inventory side, Raymer warns that carrying costs can quietly balloon as operators chase newness and freshness to satisfy customer demand, which does not always align with how quickly the product actually moves. Maintaining analytical control over inventory is critical to avoiding dollars tied up in slow-moving product. Tom Zuber echoed the point, noting that buyers need to stock what actually sells and not be influenced by vendor friendships. If a brand does not meet customer expectations, it will sit on the shelf as dead weight, becoming a direct drag on the store’s bottom line.

Verano’s McDermott adds another dimension to the inventory conversation, pointing to product costing at the facility level as one of the most under-invested areas in the industry. He argues that implementing an ERP system to accurately understand the true cost of producing each product is foundational to becoming a fully dialed-in operator. The process is not easy, but McDermott says it will identify weaknesses and pinpoint where products are underperforming, providing direction for SKU rationalization. Without that level of product cost of goods, he warns, operators are likely working from their gut, which is further off than they realize.

 

Flexibility and Market Pivots are Key

Woloveck notes that rather than spreading thin across many markets, Jushi has shifted its strategy toward going wider and deeper in select states, pulling back on store expansion after a 40% increase in store count and redirecting dollars toward cultivation buildouts in high-opportunity markets like Virginia and Pennsylvania. He noted that this “concentrate and win” approach has become a common strategy across both public and private MSOs.

On vertical integration, the panelists offered contrasting views. Verano’s McDermott says that being vertically integrated in New Jersey has been an advantage, allowing the company to capture margins at every stage and bring new products to market where it can be more price-competitive in the wholesale space, particularly as newer brands use price as a competitive weapon.

Raymer says the company assesses each operation state by state and that vertical integration is not a one-size-fits-all strategy. In New Jersey, C3 operates without vertical integration, and Raymer says that works because it allows them to experiment with the market without operational pressure. In Missouri, by contrast, the company is fully vertical, targeting a set percentage of its own product through retail. As wholesale costs evolve and markets mature, she suggests the evaluation around vertical integration will continue to shift. “It just depends on where the state is, both from a cost to produce, as well as what the wholesale costs look like within that market,” she said.

 

Looking at Product Margins From Different Angles

Raymer says C3 Industries looks at inventory and assortments within a state and then by store to identify where there is room to push on margin or negotiate costs based on factors like sales velocity. The company uses markup strategies based on how quickly a product moves through the environment, focusing on total margin dollars rather than margin as a percentage.

Woloveck has observed a notable consumer shift toward larger units, with customers trading up from eighths to quarters or ounces on flower, and vape formats growing from 0.3 grams to 2 grams. Larger pack sizes lower the cost per unit and improve overall margin dollars, even if total unit count decreases. He stressed that every state, and even a city or jurisdiction within a state, requires its own distinct strategy.

 

 

 

 

What Cultivators Are Talking About in New Jersey

By Pam Chmiel
2 Comments

New Jersey is a highly desirable cannabis market for new operators because of its rapid billion‑dollar growth, strong consumer demand, and status as one of the most profitable yet undersupplied markets on the East Coast.

Cultivators came together at the recent IgniteIt event to share their perspectives on the market. Genetic preservation, price compression, the future of breeding, and what makes a great cultivator were among the key topics.

 

What Makes A Good Cultivator?

Aside from operational chops, a cultivator must be able to “read the room” in their cultivation facility. Panelist Chad Salute, Head of Cultivation at iAnthus, who has been growing since the 90s, says, “It’s not just a set-and-forget-it environment, light or irrigation strategy.” He added that great cultivators are the ones who can come in, read the plants, and push them as hard as they can to get the most expression.

Salute explained that top growers rely on constant observation and hands-on adjustments. They monitor subtle cues like plant color, structure, and canopy variation, then fine-tune conditions daily. He compared the process to training athletes, noting that strong vegetative growth lays the foundation for peak performance later in the cycle. Ultimately, he said, the difference comes down to experience and instinct. The best cultivators can scan thousands of plants, spot small micro-environmental issues, and make targeted changes that bring out the highest quality results.

Josh Krane, Fractional Head of Innovation for Justice Cannabis, adds, “If someone doesn’t have those ‘goggles,’ the best SOPs, the best building, the best nutrients are not going to get you to the best expression of that plant.” He added, “On a per-cultivar basis, I need a few turns with the plant to really understand how it responded to the tweaks we made, and if we are getting the best out of this plant, and if it is going to stay in our cultivation long-term.”

Tanner Travers, founder of Pantheon Cultivation, described growing as “half science, half art.” He emphasized that growers must deploy data in their grow rooms, but also know that every strain and facility behaves differently, making trial and error part of the process. Krane added that cultivators rarely have the luxury of running single-strain rooms. Instead, they must use experience and judgment to set environmental conditions that support multiple genetics at once, constantly fine-tuning to keep diverse plants performing well.

David Todd, VP of Enterprise Solutions at GrowGeneration, pointed out that growers historically relied on heavy, often imbalanced nutrient inputs without fully understanding why certain techniques produced standout results. He said today’s advances in plant science and data are helping cultivators move beyond trial and error toward more precise nutrient strategies.

Salute added that some of the “fire” expression from legacy grows may have come from plant stress, which researchers are now studying in more depth. He said identifying controlled stress triggers that enhance terpene and cannabinoid expression without harming plant health is the focus for cultivation science.

 

Price Compression as an Opportunity

Krane advises operators to seize the moment before the race to the bottom forces growers to prioritize yield over craft product. “Now is the time to discover what your market wants, what works best for your strategy, your growth philosophy, and then dial that in,” he said. “Ultimately, we’re all going to hit our canopy cap. Then it’s going to be a race to see who can stay economically viable. So, a great lead now helps future-proof revenues tomorrow.”

There may be a silver lining to operating in state silos: it forces operators to get granular about consumer preferences to build their brands and inform product lines, rather than casting a wide net across state markets. This approach is creating a unique view of the different cannabis cultures across the U.S. that other industries don’t have.

Krane, who has led grows in other states, says he has learned that what works in one state doesn’t work in another. “This is a unique industry with a unique customer base that wants a very specific set of characteristics in their cannabis,” he explained. For example, he finds that California loves candy, while New Jersey is a haze-driven market.

Budtenders and buyers are a great resource for understanding consumer preferences, says Krane, but he urges brands to go directly to consumers to see what resonates with them. “They are a vocal market and want to share their opinion,” he said.

David Holmes, founder of Claude9, says they have hosted a very popular event for years, inviting a couple of hundred people to sample a variety of strains and gather data on what consumers want in their cannabis.

 

2026: The Year of Breeders and Genetics

As the cannabis industry grows, the need for stabilized seeds that reliably produce uniform plants over generations is becoming essential for scaling production and meeting market demand.

According to Holmes, breeding has picked up in the last five years, with large-scale meetings among breeders becoming more frequent, as breeders try to crack the code for hybrid seeds, where 500 to 1,000 seeds in an indoor facility could be uniform and replace clones. While he still thinks the ability to create true hybrid seeds is years off, he gave investors a shout-out, saying that if they want to keep their finger on the pulse, they should look at hybrid seeds for expansion opportunities.

 

Sounding the Alarm Over Genetics

Panelists also highlighted the growing urgency around long-term genetic preservation and the need for more genetic banking services. Travers pointed to emerging solutions such as cryogenic storage and tissue culture banking, which allow cultivators to preserve meristem tissue at ultra-low temperatures and potentially restore plants years later. He warned that without these tools, valuable cultivars can be lost due to pathogens, epigenetic drift, and the practical limits of maintaining mother plants.

Salute explained that tissue-cultured preservation is not without challenges; it does not always return with the same expression growers remember, while Krane added that even successfully revived legacy strains may no longer meet modern commercial needs for yield, consistency, or consumer preferences. Panelists did agree that as technologies mature, genetic banking will play an increasingly important role in protecting cannabis biodiversity and giving operators the option to reintroduce classic cultivars in the future.

Travers also noted that beyond preservation, tissue culture offers a practical operational benefit. By storing genetics in culture rather than maintaining large mother rooms, operators can significantly reduce the footprint required for long-term plant maintenance, freeing up valuable canopy and propagation space.

 

The Future of Exports

Panelists said that while many cultivators would welcome the opportunity to export cannabis internationally, significant regulatory and market hurdles remain. Holmes noted that export markets typically require expensive GMP-level facilities and strict testing standards, which can drive up costs and, in some cases, affect product quality. Krane added that large-scale exports would likely favor industrial agriculture models focused on yield and consistency rather than craft quality. They agreed that global trade could create a clear divide between high-volume export cannabis and smaller, premium cultivation.

Todd offered a more optimistic view of global expansion, particularly from a supply and technology standpoint. He said emerging European markets are creating strong demand for American cultivation inputs, expertise, and intellectual property. Rather than exporting flower, he sees major opportunities in exporting proven cultivation solutions that help growers learn from the U.S. market to raise all boats. As new international markets develop, Todd said products backed by real-world R&D and reliable data are resonating with cultivators worldwide seeking a competitive edge.

Jersey Girls Bring Down the House At IgniteIt Event

By Pam Chmiel
No Comments

There was passion, power, and plenty of practical business advice from the women (and one man) who took the stage at the recent IgniteIt event in New Jersey. As the industry shifts away from the early “shiny-object” phase, operators are increasingly doubling down on what works. A few years ago, the prevailing growth strategy was to go wide, not deep. Today, that mindset has changed.

Miss Grass CEO Kate Miller said the company is prioritizing focus over expansion for expansion’s sake. “We are focusing on what’s working,” she explained. “More specifically, we are investing in our priority markets.” While the brand currently operates in eight states, Miller noted they no longer treat every market equally; instead, they concentrate resources on their top performers rather than spreading themselves too thin.

 

Find Your Partner and Do-si-do

Faye Coleman, CEO of Pure Genesis Dispensary, emphasized that success in cannabis rarely happens alone. “You don’t have to stand alone and fight this battle,” she said, encouraging operators to think creatively about partnerships as stepping stones to growth.

“Sometimes your retailer is your partner. Sometimes your vendor is your partner, your ancillaries are your partner, even your insurance carrier is your partner,” she explained. “All those partnerships do exist.”

Coleman also stressed the importance of flexibility. While waiting for their dispensary application to move forward, she and her team pivoted into beverages to generate revenue and maintain momentum.

Angela Brown, CEO of Coast Cannabis, agreed that partnerships are essential for survival and expansion, particularly given federal restrictions. “The idea of shipping across state lines is a dream we all have, but not a reality,” she said, noting that collaboration is often the only viable path to multi-state growth.

From a manufacturing perspective, SōRSE Technology CEO Howard Lee said he still considers New Jersey an emerging market and has seen similar cycles before. Early entrants often arrive flush with enthusiasm and capital, but many fail to survive. “You go through this first wave of very enthusiastic partners… many don’t make it,” he said. “Then you find the partners who have survived the chaff — and that’s when the relationship really starts to work.”

Roz McCarthy, CEO of Black Buddha, added that not all partnerships need to be perfectly balanced to be valuable. She compared them to a dance — one that requires testing the chemistry before committing. “Maybe it isn’t a 50-50 split in Jersey,” she said, “but the relationship can create opportunities that push your business to another level.”

During negotiations, Coleman stressed the importance of defining and enforcing non-negotiables. “How do you make certain that they understand and respect the agreement? You put clauses in for when they break it. That’s what you do,” she said.

She also underscored the importance of mindset in choosing partners: “There are three types — survival, thriving, and winning. Get with the builders and the winners. Don’t let people waste your time.”

 

The Exit Strategy Many Operators Forget

Lee also offered a cautionary tale about partnership risks, warning operators not to overlook exit terms. He shared that his company once accepted a major investment in exchange for territorial exclusivity, only to become locked into a stagnant relationship for two years when the partner failed to execute.

“We never negotiated a strong exit,” he said. “We couldn’t buy back the exclusivity or unwind the agreement, and it cost us millions in lost revenue.” His advice: always ensure contracts include clear pathways to terminate or restructure partnerships if they stall.

 

Where Outsourcing Saves Money—and Where It Doesn’t

As new operators continue to enter the market, outsourcing has become an increasingly popular strategy to reduce barriers to entry. But the panelists were quick to point out that outsourcing isn’t a one-size-fits-all solution—and without proper planning, it can quietly erode the margins operators are trying to protect.

Lee encouraged new businesses to consider outsourcing to established, large companies. “Don’t be afraid of established large businesses that have enormous resources,” he said. Co-packers and packaging companies with mature R&D and quality teams can be valuable partners, particularly for operators who aren’t yet ready to build those capabilities in-house. The key, he argued, is to use those relationships as learning opportunities, not just as cost-cutting measures.

For operators trying to gauge when it makes sense to invest in headcount versus outsourcing, Lee offered a straightforward metric: revenue per employee. “Just divide your revenue by the number of employees,” he said. “At some point, it’s going to make sense to invest in people to do that job, but you won’t know it until you have revenue per employee.” In today’s capital-constrained environment, that discipline is essential. “Ten years ago, capital was easy. You could hire a bunch of people. But now you really have to manage—can I outsource it before I get more capital?”

Coleman urged operators to tap their professional networks before selecting outsourcing partners. “We’re leaning on each other to give those recommendations, because let’s face it, we’re a small industry,” she said.

But beyond finding the right vendor, she stressed that operators must first understand their own businesses before outsourcing anything.

“What you own is your competitive advantage,” Coleman explained. “I would say the first question you need to ask is: have you done an inventory of your business to understand where you need to outsource, what you need to own, and what you need to park on.” Too often, she cautioned, operators chase a specific opportunity without adequately assessing their financial models, growth pace, or capital runway. “Have you done the right financial modeling to make certain that if you outsource, you’re going to make the margin? Or if you grow too fast, do you have the capital budget to keep pace?”

 

Where Innovation Really Comes From

“The innovation comes from all sorts of places,” Lee reflected. “The first thing is, you gotta listen to your gut—and at the same time, you gotta listen to your team.” He agreed, data matters, but so do the delivery drivers and frontline employees who hear directly from customers every day. When you have no data, follow your instincts. When people tell you what they want, listen to them.

 

AI as a Business Tool—Not a Business Strategy

Several panelists pointed to artificial intelligence as a growing force in their operations, though they were careful to distinguish between using AI as a tool and letting it drive the business.

McCarthy shared how Black Buddha recently partnered with an AI engineer to build a custom real-time dashboard that pulls market data and synthesizes it into actionable intelligence. “When you’re cash-deficient and don’t have unlimited resources, you have to make smart decisions about where you’re spending your time,” she explained. The dashboard now gives her visibility into New Jersey’s top retailers, their spending by product category, competitor pricing, and sales velocity—all in real time. “That’s going to be the dagger for me to outperform what I did last year,” she said.

Brown echoed the sentiment, noting that AI has become a company-wide initiative at Coast Cannabis heading into 2026. “If you are going to grow into multiple marketplaces and utilize partnerships, you have to understand the data for each one of those states,” she said. “It’s impossible off the top of your head to know everything in five markets, eight markets.”

Coleman offered up caution, “AI is great as a tool,” she said. “Be careful, it does not lead to the innovation of the business.” She believes that operators who let algorithms chart their course risk losing the human judgment that built their brands in the first place. She also tied AI adoption to team quality. “Does your team poke holes in your strategy consistently? If they do not, you have the wrong team. There’s nothing like having everybody say okay—that’s when you know you’re already dead.”

 

Portfolio Strategy: Margin Drivers vs. Brand Builders

Brown stressed the difference between assessing margin drivers versus your brand builders. For her company, data and customer feedback have guided product development, particularly in understanding what works for most consumers in categories such as sleep-focused edibles.

At the same time, Faye Coleman cautioned that while AI can enhance decision-making, it should never replace human leadership or strategic thinking in identifying opportunities and challenging assumptions.

Finally, Kate Miller noted that innovation increasingly involves structuring diverse product tiers — from premium, high-margin offerings to value products — while balancing working capital constraints. Panelists also highlighted flexible deal structures, such as revenue-share models, as innovative financial strategies that enable brands to scale without overextending resources.

 

When Working Capital Is the Bottleneck, Consider a Hybrid Model

McCarthy closed the discussion with a candid account of a costly lesson in working capital management. Early in Black Buddha’s brand journey, she took on contract manufacturing deals she couldn’t sustain. “I lost money, I lost credibility, I lost opportunity,” she said plainly.

An investor reviewing her financials encouraged her to consider revenue-sharing and royalty models as strategies, particularly for brands building market traction without deep capital reserves. Under this approach, the manufacturing partner absorbs the operational load while the brand focuses on driving sales velocity and expanding retail presence.

“Don’t feel like it has to be one versus the other,” McCarthy urged. “There could be a hybrid.” A brand might use revenue-share arrangements in new markets to establish traction, then layer in co-manufacturing deals in markets where they’ve already proven demand to preserve capital while building the distribution footprint needed to scale.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The New York and New Jersey Cannabis Connection

By Pam Chmiel
No Comments

Market Maturity Brings Pricing Pressure

New Jersey’s cannabis market is showing signs of maturity, according to a presentation by Headset CEO Cy Scott at the recent Ignite NJ event, saying the overall revenue hit the billion-dollar mark in 2025 and is growing nominally.

Similar to other markets in the growth cycle, while more customers are visiting dispensaries and transactions are slightly increasing, many individual retailers are seeing declining sales. Scott said this disconnect reflects intensifying price pressure, as shoppers spend less per visit amid growing competition and discounting.

Other factors contributing to the squeeze include retail saturation. Because municipalities can opt out of cannabis businesses, some regions have become retail deserts while others face dense clusters of competing dispensaries.

At the same time, performance varies widely across operators: some stores are significantly outperforming the market, while others are struggling, highlighting the growing importance of location, strategy, and execution in a maturing landscape.

Comparisons with neighboring New York also suggest continued downward pressure on pricing as the two markets evolve side by side.

Scott warned that price compression is beginning to accelerate in the region. While New Jersey has been able to hang onto stable pricing, that advantage is starting to erode, particularly as neighboring New York loosens discounting rules, which typically accelerate margin pressure. In this environment, he emphasized that traffic and customer retention become critical: with smaller baskets becoming the norm, operators must focus on bringing shoppers back more frequently and building loyalty.

“The pace of New York growth is so extreme, I think it’s going to impact New Jersey,” says Scott.

Jeremy Rivera, CEO of Terp Bros., a dispensary in Queens, NY, said the two markets have long operated as a shared regional economy. Everybody from New York City travels to New Jersey, and we are in our legacy games. A lot of us in New Jersey are legacy operators who were purchasing cannabis from New York City and vice versa. “So right now, as I see it, as an operator in New York, a lot of us are trying to take our small mom-and-pop businesses, see opportunities in New Jersey, and expand and scale into a state that’s very close,” he added.

 

A Bi-Directional Cannabis Ecosystem

Panelists at Ignite NJ repeatedly emphasized that New York and New Jersey function less like separate markets and more like a tightly connected regional ecosystem. “It’s bi-directional,” said David Vautrin, noting that operators are actively sharing SOPs, business models, and branding strategies across state lines as multi-state footprints in the Northeast take shape. Retailers and brands are also expanding across state lines due to proximity and overlapping customer bases. Rivera said scaling into New Jersey is often the easiest next step: “Our easiest ability to scale is with our neighbor,” he explained, pointing to the constant flow of consumers, data, and brand awareness moving between the two states.

Speakers said each market also offers distinct advantages that shape cross-border activity. New Jersey provides a more stable operating environment and stronger margins for many businesses, while New York’s licensing structure has fueled a surge of smaller, niche brands. As a result, shoppers frequently switch between states based on selection, proximity, and price—but panelists stressed that long-term success depends less on pricing arbitrage and more on building strong brands, educating customers, and fostering customer loyalty. As Vautrin put it, “If you sell on price, you lose on price.”

Speakers noted that consumer behavior routinely crosses state lines, driven primarily by convenience, product selection, and market differences. Rivera said retailers in New York are actively targeting nearby New Jersey shoppers, particularly in border regions, and are seeing strong digital traffic from across the Hudson. He added that while New Jersey may offer slightly lower prices in some cases, New York is attracting consumers with a wider range of small-batch and niche brands made possible by its micro-license structure. “Consumers are consumers—they want good weed,” Rivera said, explaining that many are willing to travel for unique products they can’t find locally. Panelists agreed that proximity remains a powerful factor, with Jason Starr noting that purchasing patterns often reflect simple geographic convenience as much as pricing or regulation.

 

Brands, Consumers, and the Future Northeast Corridor

Panelists said brands operating across New York and New Jersey will need to balance two distinct—but increasingly overlapping—consumer priorities: strong branding and authentic local presence. Jeff Freeman, co-founder of Mfused, noted that both markets are evolving toward a mix of high-volume commercial products that “keep the lights on” and smaller, community-driven craft offerings that build loyalty. Over time, he expects operators in both states to demand deeper local engagement, experiences, and collaborations, trends that will likely favor smaller-batch and hyper-localized brands.

At the same time, speakers emphasized that branding remains especially powerful in New York. “New York is heavy, heavy branding—your brand speaks for you,” said Keshawn Warner, co-founder, Dazed Cannabis, explaining that many retailers entering New Jersey are initially selecting partners based on brand recognition and proven performance across the Hudson. That dynamic is increasingly working both ways, as retailers also seek to elevate emerging local brands that can eventually expand regionally, creating what Warner described as a “circle” of cross-border brand growth.

Still, panelists cautioned that not every brand will survive as the markets mature. Vautrin noted that many of the hundreds of licensed brands in New York exist largely “in name only,” arguing that long-term success will depend on consistent execution, retailer support, and meaningful customer engagement—not just marketing. Looking ahead, speakers agreed the two markets will grow increasingly interdependent, with shared consumers, supply chains, and business infrastructure gradually making them function like a single Northeast cannabis corridor, even as each retains its own identity.

 

 

 

 

 

 

 

Trenton Makes The World Takes: A Q&A with Tahir Johnson, CEO of Simply Pure Trenton

1 Comment

Tahir Johnson is the founder and CEO of Simply Pure Trenton, the first black-owned social equity dispensary to receive a license in New Jersey. He’s a well-known cannabis advocate who’s held leadership roles at the Marijuana Policy Project, the National Cannabis Industry Association (NCIA) and the United States Cannabis Council. Tahir was born and raised in Trenton, New Jersey, so coming full circle and starting a dispensary in his hometown is something truly special.

From growing up in New Jersey to graduating from Howard University, working in finance and wealth management at companies like Morgan Stanley, to finally launching a business back in his hometown, he embodies the Trenton success story.

Tahir is speaking at the upcoming Cannabis Quality Conference in Parsippany, New Jersey on October 18. Ahead of his presentation there, we caught up with Tahir to learn a little more about his background, his thoughts on social equity and some advice he could offer to other minority cannabis entrepreneurs.

Cannabis Industry Journal: Tell us a little about yourself – what’s your story?  

Tahir Johnson, Founder & CEO of Simply Pure Trenton

Tahir Johnson: My name’s Tahir Johnson and I am the founder and CEO of simply pure Trenton. I was born and raised here in Trenton. I am a Howard University alumnus. I’ve spent most of the past few years of my life in the DC Maryland area. I came home to apply for the licenses and thankfully won them. I am one of the first 11 dispensary licenses to be issued last year. I licensed the brand from my good friend, Wanda James, who is the founder of the original Simply Pure back in Denver, Colorado. She started the very first black-owned dispensary in the country. I am excited to be carrying this legacy.

Before cannabis, I spent most of my career working in finance. I came into the industry in 2019 and started out as a budtender after quitting my job in finance, starting to work at a dispensary. I began working in advocacy, joining the NCIA in 2019 then went on to the Marijuana Policy Project and the US Cannabis council in 2021, where I was up until I started this dispensary. It’s been amazing being back home and close to the family after being away for 22 years. I am just really excited that I am on track to open the first black-owned social equity dispensary in the state of New Jersey.

CIJ: Tell us about Simply Pure. How did you start this dispensary and how did you meet Wanda?  

Tahir: So, I met Wanda back in 2019, back when I was with NCIA. Initially, it was never about opening a dispensary or anything back then. I was just building a network and finding like-minded minority folks in the business for possible future collaboration. You know, Wanda, I think of her as an OG. She’s been a friend and mentor from Day 1. So, when I initially wanted to apply for a license in New Jersey, I knew that Wanda wanted to grow and take her business outside of Denver. I went to her and asked possibly about partnering, seeing if she wanted to do this with me. She thankfully agreed to it and the rest is history.

Tahir Johnson (left), Wanda James (center) and John Dockery (right)

CIJ: Could you give us a timeline of how Simply Pure Trenton got started? Where are y’all at right now and what sort of roadblocks have you had to overcome?

Tahir: Sure, So I got the conditional license in May of last year, then I got the annual license in April of this year. Early on, hurdles were definitely access to capital. Thankfully, me being one of the first licensees and I think my background and network helped me get access to the money. The biggest barrier, when you look at getting a license, there are so many moving parts. Getting the license is just one small piece of it. Then getting local approval is another obstacle. But man, getting the building permits has been one of the biggest roadblocks I’ve ever faced. If somebody asks me what my biggest roadblock was, it’s building permits. Because in New Jersey, you have to get approval from multiple different outside agencies that really have nothing to do with building or cannabis ore anything. The latest approval we’re waiting on is from the Raritan and Delaware Canal Commission and I’m wondering what the hell does that have to do with building out the interior of my space? You know what I mean, it’s just a lot of red tape and diplomacy that I have to go through. A lot of it is very unexpected!

CIJ: Alright switching gears a little bit here. How would you define social equity in the cannabis industry’s current climate and where we’re at today? What does economic empowerment mean to you?

Tahir: I would say first that social equity in cannabis specifically is the idea that people who have been the most impacted by the war on drugs should have the opportunity be a part of the industry. And that’s super important because we’re building a completely new industry and one that’s doing billions of dollars in sales. In my opinion, when we say people who have been most impacted by the war on drugs, those are by and large the black, indigenous and Latino populations. So, it’s been black and brown folks that have been largely affected by the war on drugs. If we’re going to have a new legal system, those same people who were 4x more likely to be arrested for cannabis should at least get the opportunity in ownership of this new industry.

A rendering of the Simply Pure dispensary storefront

Economic empowerment is one of the biggest parts of social equity. It’s actually what drew me to cannabis in the first place. When you look at the opportunities in cannabis, it’s a business that’s hard to get into, but It’s a lot harder to do if you have a lack of access to capital. Drawing from my career in finance, when you look at black communities, we have 1/10 of the wealth of our white counterparts. Looking at such a cash-oriented business where you can’t just get a normal business loan from a bank, you have to have personal wealth and access to venture capital or private equity. Well, our communities have less access to that because of our background, our networks and upbringings. So social equity is the idea that there should be some support systems in place, some help in bringing opportunities of the cannabis industry to us.

One part of that is licensing and giving us access to the licensing process. Another part of this issue that is being administered more recently is actually making sure that wealth is distributed through programs and policies. Not everyone may want to start a dispensary like me, but they were still severely impacted by the war on drugs. Seeing money from the tax dollars generated by the cannabis industry now going back to the communities to fund rebuilding and revitalizing projects is great. It really comes down to leveling the playing field to create those opportunities for people that should have them.Tahir Johnson will be presenting at the upcoming Cannabis Quality Conference in Parsippany, New Jersey, October 16-18. Click here to learn more.

CIJ: What does community mean to you? How does your business fit into and support the Trenton and larger NJ cannabis community?

Tahir: For me, one of the biggest things I’m proud of growing up in Trenton is that sign on the bridge, “Trenton Makes, The World Takes.” Growing up, this area was an industrial town. Both of my grandparents had good factory jobs and were able to support a family, but a lot of that has left the city over the years, leaving it economically depressed. I’ve been pulled over, arrested, we’ve had family members locked up all just because of cannabis. So the idea that now, through cannabis, to be able to have an opportunity to build something positive in our community, to create jobs and wealth in our community, giving back in this same place is wonderful. I think of this as the economy and opportunity of the future. In New Jersey specifically, the state has one of the biggest racial disparities on arrests. A lot of that is due to cannabis. I remember growing up, every time we get pulled over, you know we’re getting searched. There’s been real life situations, where there was a seed or a roach in the car and we’d have to decide who’s going to jail today just because of a roach. You know, how many people’s lives have been impacted and changed just because of a cannabis arrest? Now, looking at New Jersey and this ability to right those wrongs, it’s really a beautiful opportunity.

When I talk about my community, the way that I’ve been able to inspire people and make our community proud has been the biggest thing for me. For us, we haven’t seen a lot of people make it and get to achieve success. So, to be able to have this opportunity and to be from here actually doing this is one of my biggest motivators, showing people from my community and from across the state that we can be successful in business. We often hear how difficult it can be and how making it in business seems like mission impossible to so many, being able to achieve that mission and give some hope and inspiration to people where I come from is truly special.

CIJ: If you could give yourself advice ten years ago, what would it be? What advice would you offer to other BIPOC entrepreneurs trying to make it in the cannabis industry?

Tahir: Let’s see where I was ten years ago. I would say just always continue to keep the hope and keep the faith. Stuff gets tough, but as long as you keep the vision and the path, it’s going to be okay. What I would say to other cannabis entrepreneurs is largely the same thing. This is hard as fuck. It is very hard. No matter how many times you get knocked down, you have to get back up. Don’t believe the hype. Don’t let anybody make you believe that you can’t do it because you can. It takes believing in yourself, even if people don’t believe.

This would be something that if you are a minority entrepreneur, this is really true. You really do have to be better and stronger. Educate yourself. Take the time to network with people that look like you and don’t. First you want to build a team and a support system. You also want to be able to build. Some of your allies that can help support you, they might not come from your same community or background. I wouldn’t be here if it wasn’t for a lot of very diverse people that believed in me. Work hard, network, believe in yourself because nobody else is going to believe in you. Put in the work and that’ll bring success to anything you want to do.

Tahir Johnson (left) with John Dockery (right)

CIJ: Any final thoughts you want to share with our readers?

Tahir: Yea, so in addition to me winning my licenses, my close childhood friend, John Dockery, will be opening another Simply Pure location in downtown Trenton too, which is really exciting. I am really looking forward to getting to the finish line with all of this and being able to open. I think one of the biggest things I’d like to add is that there are so many people depending on us for this, so many jobs on the line, the community I am waiting to serve, all of these things and we’re encountering delays that are typical of this industry with the long road from getting licensed to opening and operating. A lot of people are expecting us to be open and we’ve encountered some slight delays, but we’re excited to be opening soon and expect that to happen no later than October.

Safety & Compliance in the Absence of Regulatory Clarity & Consistency

By Joel Chappelle
No Comments

As the legal landscape surrounding cannabis continues to evolve, the creation of robust, sensible and consistent safety regulations remains stalled. A patchwork of broadly inconsistent state rules and regulations, along with years of federal inaction and policy stagnation have the potential to create significant risks for consumers. Given the industry’s explosive, multi-billion-dollar growth, consumers have access to an ever-increasing number of products produced by an increasing number of actors, pursuant to widely divergent standards and rules. Given this, the industry would be well-served to take on the responsibility of promulgating a coherent regulatory framework with robust (but sensible) safety regulations. The importance of collaboration among cannabis industry stakeholders cannot be overstated if we are to develop and adopt consistent standards that guarantee product safety at every step of the supply chain.

Joel Chappelle, along with several renowned experts, will lead the Seed to Sale Safety Workshop at the Cannabis Quality Conference this October 16 in New Jersey. Click here to learn more. Inconsistencies in safety standards and regulations open the door to a range of potential hazards, including contaminant risk, labeling accuracy, potency quantification and many others. Absent a clear understanding of seed-to-sale risks, many of which are not even mentioned in state regulations, cannabis companies face significant exposure, often without even knowing it.

To mitigate these risks, it is vitally important for the cannabis industry to collaborate in the ongoing development of safety standards. This means understanding and implementing safety measures starting with the cultivation process. Careful consideration should be given to factors such as the use of pesticides and herbicides, soil quality and irrigation methods. Standardized safety testing to ensure uniformity between products for potency, contaminants, heavy metals and microbial organisms is crucial to consumer safety. Accurate and comprehensive labeling is likewise necessary for consumers to be adequately informed.

For as long as consistent state and federal guidelines governing cannabis safety remain elusive, the need for industry self-regulation will be paramount. Cannabis companies must work together to share best practices, establish standard operating procedures and adopt stringent safety measures. By promoting transparency and collaboration, stakeholders can build credibility and consumer trust while fostering a safer and more reputable industry.

As the industry continues to grow, it is incumbent upon all stakeholders to continue prioritizing consumer safety through, among other things, a focus on education and inter-industry collaboration, if we are to continue cultivating a trustworthy and sustainable cannabis market for the future. The path forward will require stakeholders to pursue continuous education, improvement, and collaboration in the development of a holistic safety framework capable of ensuring consumer safety.

New Jersey Market Grows, Regulators Make Licensing Progress

By Cannabis Industry Journal Staff
No Comments

2023 has so far been a productive year for the New Jersey Cannabis Regulatory Commission (CRC), the government body tasked with overseeing the state’s medical and adult use cannabis markets. The licensing process since New Jersey first launched its adult use cannabis market has been slow, but intentional and systematic.

When the state first launched adult use sales in April of last year, only thirteen dispensaries in the Garden State had their doors open for customers. A little more than a year has passed and now 27 dispensaries at this time have opened their doors for adult use customers.

Holistic Solutions, a dispensary based in southern NJ

The CRC has been a busy body this year, issuing hundreds of conditional licenses to microbusinesses and standard licensees (temporary licenses awarded to applicants giving them the green light to obtain local approval, find real estate and apply for a conversion to an annual license). Of the annual licenses they have awarded in 2023 so far, 18 have gone to cultivators, 12 to manufacturers, 35 to retailers and one laboratory. That’s an additional 65 cannabis businesses given approval to start operations.

Just last week, Holistic Solutions, based in Waterford, New Jersey, announced that they started serving adult use customers. Holistic is New Jersey’s first Black woman-owned cannabis licensee, with Suzan Nickelson at the helm. “We are thrilled to have the opportunity to serve adult-use customers at Holistic Solutions,” says Nickelson. “Our mission has always been to provide education and access to natural healing solutions, and we are excited to continue that mission for all of our customers.”

The Cannabis Quality Conference takes place in New Jersey this year, October 16-18, 2023. Click here to learn more.Valley Wellness, the first independently owned dispensary to open in the state, also opened its doors to adult use customers last week in Somerset County. “While the market is expanding, it takes cannabis companies months, if not years, to open,” Sarah Trent, owner of Valley Wellness, told reporters. “So we expect our product selection will remain stable and similar over the next year or so. That said we are anxious to add new products made from local New Jersey growers and manufacturers.”

With all these new licensees and a larger marketplace comes tax revenue the state is eager to see. Back in March, legislators in the state approved a bill that would allow cannabis businesses to deduct ordinary business expenses on their state tax return that they are prohibited from deducting on their federal tax return, the dreaded 280E tax code that cannabis stakeholders know as a painful thorn in their side. Governor Murphy signed that bill into law yesterday, which should lessen the massive tax bills that cannabis businesses in the state are accustomed to seeing.

As the state’s cannabis market continues to blossom, a large number of those new licensees are expected to come online before the end of the year.

Cannabis Quality Conference & Expo logo

Registration Opens for 2023 Cannabis Quality Conference

By Cannabis Industry Journal Staff
No Comments
Cannabis Quality Conference & Expo logo

May 4, 2022 – Registration for the Cannabis Quality Conference & Expo (CQC), taking place October 16-18 at the Hilton Parsippany in New Jersey, is now open.

The agenda will feature breakout sessions, keynotes and panel discussions that will help attendees better understand the cannabis markets in the region and provide insights on best practices and business strategies. The conference will begin with a number of pre-conference workshops on Monday, October 16:

  • The Seed to Sale Safety Workshop
  • Food Safety Auditor Training
  • CP-FS Credential Review Course
  • The Food Safety Culture Design Workshop

The conferences will run all day Tuesday, October 17 and throughout Wednesday, October 18. The full agenda is expected to be announced in the coming weeks. Notable speakers include:

  • Tahir Johnson, Founder, Simply Pure
  • Steven M. Schain, Esquire, Attorney at Smart-Counsel, LLC
  • Jay Czarkowski, Founding Partner, Canna Advisors
  • Michael Kramer, Quality Assurance Director, Wana Brands
  • Casey Leaver, Director of Regulatory Compliance, Vicente LLP
  • Sumer Thomas, Director of Regulatory Affairs
  • Rachel Wright, Managing Partner, ABFinWright
  • Ernest Toney, Founder, BIPOCann
  • Victor Guadagnio Jr., Co-Founder, Canna Remedies NJ

The Cannabis Quality Conference and the Food Safety Consortium are co-located this year, taking place in the same venue and at the same time. Registered attendees get full access to both conferences.

Registration options are available for full conference passes for both the Cannabis Quality Conference and the Food Safety Consortium as well as all pre-conference workshops.

Event Hours

  • Monday, October 16: Pre-conference workshops, 8 am – 6:30 pm (ET)
  • Tuesday, October 17: 8 am – 6:30 pm (ET)
  • Wednesday, October 18: 8 am – 3 pm (ET)

Tabletop exhibits and custom sponsorship packages are available. For sponsorship and exhibit inquiries, contact RJ Palermo, Director of Sales, and Chelsea Patterson, Account Executive.

About Cannabis Industry Journal 

Cannabis Industry Journal is a digital media community for cannabis industry professionals. We inform, educate and connect cannabis growers, extractors, processors, infused products manufacturers, dispensaries, laboratories, suppliers, vendors and regulators with original, in-depth features and reports, curated industry news and user-contributed content, and live and virtual events that offer knowledge, perspectives, strategies and resources to facilitate an informed, legalized and safe cannabis marketplace.

About the Cannabis Quality Conference & Expo

The Cannabis Quality Conference & Expo is an educational and networking event for the cannabis industry that has cannabis safety, quality and regulatory compliance as the foundation of the educational content of the program. With a unique focus on science, technology, safety and compliance, the “CQC” enables attendees to engage in conversations that are critical for advancing careers and organizations alike. Delegates visit with exhibitors to learn about cutting-edge solutions, explore three high-level educational tracks for learning valuable industry trends, and network with industry executives to find solutions to improve quality, efficiency and cost effectiveness in the evolving cannabis industry.

New Jersey Gives Curaleaf A Second Chance

No Comments

On April 13, 2023, The New Jersey Cannabis Regulatory Commission (CRC) announced that Curaleaf would not be able to renew their cultivation and retail licenses for adult use cannabis for violating labor rules under the state’s cannabis regulations. In a surprise reversal, the NJ CRC voted to approve the license renewals with some caveats during an emergency meeting on April 17.

According to Commissioner Krista Nash with the NJ CRC, Curaleaf did not abide by the law when it failed to recognize workers’ vote to unionize in a timely manner. She says evidence includes testimony from workers and the union. “In my opinion, Curaleaf, in several of its locations, have not complied with the mandatory labor provisions set forth in the law,” says Nash. “And that alone was reason to deny their application for renewal.”

In a press release published by Curaleaf following the reversal, the company say they will be complying with the demands set by the NJ CRC to provide documentation of its labor practices, confirm ongoing compliance and provide evidence of good faith efforts to negotiate collective bargaining agreements. “Today’s decision by the CRC Board to vacate their unprecedented action last week is an incredible victory for our 500 NJ team members and vindication for what we knew all along: Curaleaf is in good standing with the CRC and has fulfilled every requirement necessary for the renewal of our licenses,” says Matt Darin, CEO of Curaleaf in the same statement.

While the second chance comes with a number of caveats, the decision reversal is definitely unprecedented. The Board at the NJ CRC said that if Curaleaf does not comply with those demands, they have the ability to take further action at the next meeting. “Either we hold true to the law and protect the hard-working men and women of New Jersey who want fair wages and working conditions, or we can reward bad behavior and ignore these mandates for the sake of money and profits,” says Nash. “The conditions contained in these resolutions presented today offer Curaleaf a second chance to course correct.”

New Jersey Moves to Remove State’s 280E Tax Code

By Jason K. Gross, Esq.
No Comments

The New Jersey legislature recently approved legislation that would allow licensed cannabis businesses to deduct ordinary business expenses on their state tax return that they are prohibited from deducting on their federal tax return, and such legislation has been sent to Governor Phil Murphy to potentially sign into law. This relates to the universally dreaded (among those in the cannabis industry, at least) Section 280E prohibition. This legislation is important because it would change current law to allow legal cannabis businesses in New Jersey to operate on more of a level playing field with other businesses in the state.

Cannabis operators and applicants are penalized by their inability to deduct certain expenses on their state and federal tax returns. The cause for this frustration is twofold. First, under federal law, cannabis is considered a Schedule I controlled substance under the Controlled Substances Act, 21 U.S.C. § 801 (CSA). Second, under IRS Tax Code Section 280E, cannabis businesses that are legal under state law are still considered drug traffickers for the purposes of federal tax law. While a related issue that is often considered along with Section 280E is whether or not it is sound public policy to continue to classify cannabis as a Schedule 1 drug, that is beyond the scope of this article.

It is important to understand the history and purpose behind Section 280E. The history is unusual in that Section 280E was enacted in 1982 as a reaction to a court case in which a convicted cocaine trafficker asserted his rights under federal tax law to deduct certain business expenses, including a portion of his rent, the cost of a scale and packaging expenses. The court agreed that the cocaine trafficker should be legally able to deduct his ordinary business expenses as part of his criminal enterprise. The federal government then created Section 280E to punish drug traffickers by removing the profit out of drug deals. Section 280E provides, generally, that no deduction or credit will be allowed in running any business that consists of trafficking any controlled substances (within the meaning of schedule I and II of the Controlled Substances Act).1

Fast forward several decades and New Jersey has legalized medical and adult-use commercial cannabis activities. Still, because cannabis remains a Schedule 1 controlled substance, federal law prohibits legal cannabis companies from deducting ordinary business expenses and New Jersey has similarly applied the Section 280E prohibitions. New Jersey’s legislators understand the inequity in having legalized, State-compliant cannabis cultivation, processing and retail businesses, where those same businesses cannot take advantage of standard expense deductions applicable to other legal businesses.

If enacted, this New Jersey legislation would decouple New Jersey’s business tax provisions from the Section 280E rule barring deductions for cannabis businesses. Under the proposed New Jersey tax code revisions, a licensed cannabis business’s gross income would be determined without regard to Section 280E of the Internal Revenue Code.2 The legislation was approved overwhelmingly in both chambers: by the New Jersey Senate in a vote of 32-3; and by the New Jersey assembly in a vote of 69-8. It would apply to tax years beginning on January 1 of the year following the date the Governor enacts the legislation.

The State Capitol in Trenton, New Jersey

Under Section 280E, a business may not deduct expenses unrelated to its costs of goods sold (COGS), which are, generally, the costs to a cannabis business of producing cannabis products and inventory, including transportation costs to purchase the wholesale cannabis. Virtually everything else is subject to the Section 280E prohibition and non-deductible. So, all other typical costs, such as wages and salary, overhead, advertising, insurance, travel expenses and depreciation do not reduce taxable income. These ordinary expenses are still necessary for the operation of all businesses (to varying degrees). If businesses cannot legally deduct such expenses on their tax returns, their tax liabilities will increase and they will have less money to invest in their facilities and equipment, pay higher salaries and expand their operations.

The impacts of Section 280E are dramatic. An example helps to illustrate this. Consider a hypothetical C Corp. with gross sales of $1 million, COGS of $600,000 and other expenses of $300,000. Such business has a gross profit of $400,000 and net income of $100,000. If the business is normally taxed as a C Corp. at the 21% Federal tax rate, it would pay $21,000, or 21% of $100,000 net income and also $9,000 in State taxes (applying 9% State tax rate on $100,000 net income), for a total tax liability of $30,000. However, that same business in the cannabis industry would pay $120,000 in combined Federal and State taxes, with 21% Federal tax on $400,000 gross profit plus 9% State tax on $400,000 gross profit. As this demonstrates, a cannabis business may be taxed on 100% of the expenses a non-cannabis business could write off. Instead of a 30% effective income tax rate, the cannabis business in this example would have a 120% effective income tax rate. Such business that would otherwise have a profit instead would have a deficit.

Section 280E places a significant tax burden on legal cannabis operators that does not exist for other businesses. While New Jersey’s legislators cannot change the Federal tax code, they are taking action to revise New Jersey’s tax code to level the playing field. Let’s hope the Governor signs into law the pending New Jersey legislation to decouple its tax law from Section 280E.

The views and opinions expressed in this article are those of the author and do not necessarily reflect those of Sills Cummis & Gross P.C.

References

1.  The relevant text of Section 280E provides: No deduction or credit shall be allowed for any amount paid or incurred during the taxable year in carrying on any trade or business if such trade or business (or the activities which comprise such trade or business) consists of trafficking in controlled substances (within the meaning of schedule I and II of the Controlled Substances Act) which is prohibited by Federal law or the law of any State in which such trade or business is conducted.

2. The full text of the legislation provides: In the case of a taxpayer that is a cannabis licensee, there shall be allowed as a deduction an amount equal to any expenditure that is eligible to be claimed as a federal income tax deduction but is disallowed because cannabis is a controlled substance under federal law, and income shall be determined without regard to section 280E of the Internal Revenue Code (26 U.S.C. s.280E) for cannabis licensees.