Guest Post: NJ Could Experiment With Medical Cannabis Price Caps

Legal adult-use New Jersey cannabis and medical prices remain too high. A law to cap the prices has worked well for Pennsylvania medical cannabis patients just across the Delaware River.

I’ve been tracking the regulated medical cannabis prices in New Jersey since 2013.

Today, that price tracking covers nearly two years of the legal New Jersey adult-use cannabis market. The data is available to the public for free.

The data is collected once every two weeks from the New Jersey adult-use cannabis consumer’s perspective

All the legal New Jersey adult-use cannabis menus include the lowest price survey of dried flower. They are now about 20% higher than New York’s average menu prices.

The list of legal New Jersey adult-use cannabis dispensary prices was assembled last week on Leap Day 2024.

Addressing the High Price of New Jersey Medical Cannabis With a Price Cap

New Jersey’s persistently expensive prices for legal medical cannabis have always been a tall hurdle for patients. Sales began in the program back in 2013 with 3.5 grams costing $60-$70. Today, medical cannabis prices have barely declined.

Despite numerous promises over the last decade, the large corporate operators have always managed to keep legal cannabis product costs higher in New Jersey than in surrounding states.

This week, New Jersey State Senator Troy Singleton (D-Burlington) introduced a new bill, S2921. It would allow the NJ Cannabis Regulatory Commission (NJCRC) to impose price caps on legal medical cannabis.

The price caps would not be applied to the entire market. But it could be implemented at six-month intervals for individual operators. Notably, the caps could be used as a floor or a ceiling. It could prevent price-gouging at the counter and price-fixing on wholesale supplies.

How Medical Cannabis Price Caps Helped Pennsylvania Patients

There is a price-cap statute included in Pennsylvania’s medical marijuana law. PA Act 16 Section 705.

While Pennsylvania regulators never applied any price caps, the former director of the Pennsylvania medical cannabis program, John Collins, exposed consistent medical cannabis price-gouging by licensed operators in 2022.

Collins used the price-monitoring language of Section 705 to bring the wholesale versus retail data to the public. 

After that data went public, Pennsylvania’s medical marijuana prices declined steadily over the next 24 months.

While not deployed, the price cap statute was seen in the background as helping influence welcomed price declines for medical cannabis patients.

Ascend, Curaleaf, and TerrAscend are among the numerous large corporations that are Multi-State Operators (MSOs) in Pennsylvania and New Jersey as medical access providers.

A search of online menus reveals that the prices in New Jersey at corporate dispensaries are consistently double, or even triple, what patients pay in Pennsylvania.

For example, the average Pennsylvania medical cannabis dispensary has 1/8 of an ounce of medical cannabis flower for $18-$24. The lowest price for 1/8 of an ounce from the same brands in NJ is $36-$45. Again, that’s the medical menus.

See the Pennsylvania Department of Health Medical Marijuana Program (PADOH MMP) data below. 

Since 2017, more than a million people have registered in Pennsylvania’s medical cannabis program. As of January 2024, about 436,000 medical cannabis patients were in the program. 33 licensed cannabis growers supply 177 Pennsylvania medical dispensaries open today. 

Pennsylvania has a Republican-led state legislature presence that has opposed adult-use cannabis legalization thus far. Republican support for legalization and the money it brings might help.

New Jersey Versus Pennsylvania Medical Cannabis

A quick comparison of New Jersey versus Pennsylvania medical cannabis menu prices shows blatant gouging. The price is about double in New Jersey.

In fact, New Jersey cannabis prices have risen above New York, Pennsylvania, and Delaware. We now have the most expensive medical cannabis products in the region again.

If similar price-cap and price monitoring language existed in New Jersey as Pennsylvania, it would put regulators in the pilot’s seat for pricing.

Caps allow regulators to negotiate better prices for patients with large corporations. Notably, caps could also be used as a floor or a ceiling if large corporations attempt to steeply undersell smaller operators. We’ve seen this in many other states, too. 

Getting New Jersey’s hyperinflated cannabis prices back down to Earth, and allowing and legalizing cannabis home grow cultivation could greatly boost the entire medical access program. 

I (along with Edward “Lefty” Grimes of Sativa Cross) filed a price-gouging complaint with the New Jersey Attorney General against Curaleaf in 2022. The reply at the time was that New Jersey did not regulate the price of medical cannabis. 

It might also be prudent for the NJCRC to speak with the Pennsylvania Department of Health Medical Marijuana Program (PADOH MMP) about crossover reciprocity. It would allow New Jersey medical cannabis patients to shop in Pennsylvania medical cannabis dispensaries and vice versa.

Clearly, if New Jersey medical cannabis patients could visit Pennsylvania for a 50% discount on medical cannabis products, many might make that short trip. Or perhaps the larger corporations can equalize the prices for medical cannabis patients in their regional networks of dispensaries. 

When asked by the legislature NJCRC Executive Director Jeff Brown has repeatedly said competition will lower the price. But the cost to open a licensed independent New Jersey cannabis cultivation remains too steep for most. They also take a long time to set up.

Original Article