Is the bloom already off of N.J.’s budding weed business? | Editorial

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Several dozen people employed in New Jersey’s legal cannabis business are wondering if the magic has worn off of marijuana even before the state’s first high fully kicks in.

Curaleaf, currently the biggest player in the Garden State’s weed field, has announced that it will close its cultivation facility in Bellmwar and combine it with another grow location in Winslow Township. Curaleaf’s retail shop in Bellmawr will remain open and will not undergo any layoffs, but up to 40 workers at the cultivation center could lose their jobs.

It would be unusual to see people in what is arguably the state’s fastest “growing” industry standing in unemployment lines. But, government officials hoping for a bonanza in tax receipts and entrepreneurs who are still awaiting pot licenses should take note.

Maybe it’s just as well that the notoriously slow New Jersey Cannabis Regulatory Commission hasn’t rushed final action on hundreds of applications. The panel recently said it wants to fast-track approvals for minorities and persons with prior marijuana convictions. It would compound an injustice if they get their licenses just in time for these least-capitalized applicants to lose their shirts.

Like virtually all employers who downplay location closures and job cuts, finding the real impact of Curaleaf’s announcement requires reading the tea leaves, except that these leaves are of a different kind.

“Curaleaf is phasing out cultivation at our Bellmawr, New Jersey, location to meet current business needs, and will utilize that location for other operations at this time. This allows us to consolidate our production of key product platforms with our Winslow facility and will streamline processes to increase output,” the statement said. “Winslow has the capacity to support New Jersey’s overall market demand.”

It’s hard to believe that this is nothing more than the result of one of the world’s largest marijuana conglomerates bringing in a post-Dilbert efficiency expert. If one growing site, rather than two, “has the capacity to support New Jersey’s overall market demand,” it could be a sign that demand is already slowing.

If a canned soup company shuts down one of its two recently opened factories, it’s not at a time when customers are clamoring for chicken noodle that it can’t make fast enough.

State officials need to monitor the situation. Are New Jersey’s taxes so high that customers are buying in other “legal” states? Are they switching back to untaxed, unregulated “street” marijuana, which the legal kind has yet to fully displace in the Garden State? Contraband is still around. Last month in Bergen and Hudson counties, detectives confiscated 1,110 pounds of marijuana in one raid.

Curaleaf, with over 6,000 employees nationwide, laid off about 270 last fall in what some experts cite as an industry-wide slowdown. Inflation, decreased wholesale prices and the inability to use the federal banking system are given as reasons. But, these layoffs came in states with more mature recreational use market. New Jersey’s began in 2022.

Officials say sales have continued to grow since the launch. We’re still supposed to be on a roll in South Jersey. Plans have been floated to turn a pair of shuttered Burlington County diners into dispensaries. In Atlantic City, the Claridge Hotel — a non-gaming site on the Boardwalk — is poised to launch a wave of dispensaries with the added lure of consumption lounges for out-of-towners who can’t legally take their supply home across state lines.

If Curaleaf’s situation isn’t indicative of what’s happening elsewhere in the state, it may be only because of a labor-management tiff. Bellmawr employees have been trying to get union representation; organizers have filed a complaint with the National Labor Relations Board alleging management interference.

A Curaleaf spokesperson denies that union activity had anything to do with the Bellmawr cultivation site closure, but, it wouldn’t be the first time this kind of response came from employers trying to fend off a union. In that respect, Curaleaf and the rest of Big Marijuana may be no different from Starbucks or Amazon in playing hardball with workers who want to organize. Of those three companies, however, only one sells the best-known product to help management chill out.

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