Ed DeVeaux is the President of the New Jersey CannaBusiness Association (NJCBA), which is focused on policy and commerce topics in the state’s cannabis industry. The state’s adult use market will be a year old on April 21 and DeVeaux sees a good deal of progress in the market, saying “we have avoided the boom and bust cycle, we have paced ourselves in this commercial enterprise within a regulated market – we have done a good job.”
DeVeaux said, “by and large, [NJCBA is] a chamber of commerce” for the state’s cannabis industry. He’s testified before the New Jersey Senate, answering questions about industry development and is generally a cheerleader for the industry focused on the business of cannabis, the state’s social equity program, and “going from culture to commerce.”
On the social equity front, DeVeaux noted the state “has lowered the bar to entry,” focusing on “lowered cost to apply for a license” and “the creation of conditional licenses that allow more time to secure property, local permission, and investment.” He also pointed out the state prioritizes social equity applications. However, he said the reality is, “many social equity applicants are getting into business for the first time” and need not just access to capital, but also basic business education.
The New Jersey Economic Development Authority (EDA) is key to the state’s social equity program: “if you are a social equity applicant, you can apply for a grant to cover current and past costs” from the EDA. “The beauty of the funds are that there’s very little limitation to what it can be used for,” said DeVeaux. He noted while the grant application costs $1,000, “you only pay the fee if approved.” The Business Action Center, in conjunction with the state of New Jersey, is developing the “earned assistance program focusing on business education,” so that if the state funds a grant program, participants will better protect the state’s potential investment.
DeVeaux sees the three most significant challenges to new businesses as “access to capital, real estate, and local planning.” He stated that just one third of New Jersey communities have opted-in to the adult use market, which makes finding space for a cannabis business difficult. In particular, even if a community opts-in there are still challenges with “municipal zoning and local planning,” which sounds a lot like NIMBY (not in my backyard) sentiments even though the communities opted-in.
Asked about State Senator Nicholas Scutari’s bill to allow interstate commerce, DeVeaux was careful to offer a nuanced view of the pros and cons, but not a strong opinion in support. In short, he sees interstate commerce as undercutting cannabis prices in New Jersey, but conceded, “there’s kind of a little bit of interstate commerce already going on with clones.” He’s referring to clones imported from California as stock to start new growing operations. He put forward that “it’s expensive to do business in New Jersey and New York” as a reason for high cannabis prices in the region and worries that states with “right to work laws and less expensive labor costs” could undermine local businesses. He concluded, “if the federal government opened the borders tomorrow, New Jersey could be hurt because the cost of doing business is higher here.”
Regarding the adult use market, DeVeaux said there has been some movement of consumers from the medical to recreational market in the state and acknowledged that other states have seen significant medical to recreational transitions. He noted the market “was solely medical in 2018,” but the 2020 adult use legislation left the impression “that medical customers have to be catered to.” He stated, “medical cannabis purchases have dropped off a little,” but he sees a strong medical market in the future, suggesting New Jersey will not go the way of other states that have experienced massive migration from the medical to recreational market.
Regarding the illicit market, DeVeaux simply said, “the illicit market is still there; it doesn’t go away just because we have legal cannabis.” On a longer view, DeVeaux and NJCBA are working on shaping an environment in which cannabis businesses can be built to last. “We’re focused on what the industry looks like tomorrow,” he said. “We’re about a responsible, sustainable (economically and environmentally), diverse, and profitable cannabis industry. Sustainability means making sure today’s resources are available for tomorrow’s generation.”