'The race is on' in NY vs. NJ marijuana legalization: Where can you buy legal weed first?

The race is on!

Just over a month after New Jersey became the 13th state to legalize marijuana for recreational purposes, New York Gov. Andrew Cuomo signed a marijuana legalization bill into law Wednesday, crowding the legal weed market in the Mid-Atlantic before it even gets off the ground. 

Both states are in line to reap hundreds of millions in tax revenue, but awaiting the “winner” of the legal weed race could be a lucrative period of exclusivity, where not just state residents but millions of visitors from across the Mid-Atlantic could conceivably be within a few hours of legal — and taxed — marijuana.

"I think the rivalry will begin again," said Jeff Smith, an analyst and journalist with Marijuana Business Daily, a trade publication covering the cannabis industry. "We heard a few years ago how New Jersey and New York were racing to be the first to legalize adult use (marijuana).

"It's a monster market, and I think the race is on again." 

Garden State:What you need to know about NJ legal weed

Empire State:What you need to know about NY legal weed

According to cannabis industry data analytics firm Headset, the legalization of marijuana in New York could cost New Jersey's cannabis industry over $100 million in sales during the first year, a 15% dip from the company's previous projections of $740 million.

New York's cannabis industry is expected to top $1.1 billion in retail marijuana sales, according to Headset projections.

But while the Empire State may eat into the Garden State's legal weed profits, experts still believe New Jersey will get to the "finish line" and have the first recreational marijuana sales — or "adult use," as cannabis industry and marijuana legalization activists refer to them — in the Mid-Atlantic first. 

The New York marijuana legalization laws enacted by Cuomo on Wednesday includes a tax structure that doesn't take effect until April 2022, a soft target by which the state expects its Office of Cannabis Management to be appointed and have already adopted and implemented regulations for the fledgling cannabis industry.

The New Jersey legal weed laws have a six-month deadline — the clock began when they were enacted Feb. 22 — by which the Cannabis Regulatory Commission must adopt those regulations. 

Edmund DeVeaux, president of the New Jersey CannaBusiness Association, believes recreational marijuana sales could start at medical marijuana dispensaries in August, when that six-month window is complete. 

"The first two appointments to the CRC have national exposure, a national presence," DeVeaux said, referring to CRC chairwoman Dianna Houenou and executive director Jeff Brown. "There's already information that's been brought into the state, that's being sculpted for New Jersey to use. 

"And we have a current medical marijuana program that could, in essence, be expanded tomorrow." 

The New Jersey Medical Marijuana Program has been plagued for years by supply and demand issues as the number of patients has grown to over 100,000 while the number of dispensaries has stalled at just 14, about 7,400 patients for every dispensary.

In New York, there are 38 medical marijuana dispensaries to cater to its 145,000 patients, about 3,800 patients for every dispensary.

"Once the CRC has those regulations in place, you can transition fairly quickly to adult use," Smith said. "But what concerns both states is whether or not the supply is sufficient for both the medical market and the pent-up demand for adult use." 

Over the last few months, whispers of allowing recreational marijuana sales at medical marijuana dispensaries have grown louder. 

Some of the state's longest-running operators have been sold to international groups, most recently Garden State Dispensary — with locations in Woodbridge, Eatontown and Union Township — to Ayr Wellness, a Canadian company that operates recreational dispensaries in Massachusetts, Arizona and Nevada.

And in emails with Neptune Township officials over its medical marijuana dispensary, representatives of Zen Leaf — which operates recreational dispensaries in Illinois — floated sales numbers for the dispensary if it catered to both recreational and medical marijuana customers. 

Those conversations are underway in most states teetering on the edge of recreational marijuana sales: In Colorado, marijuana legalization discussions began almost immediately after voters approved a wide-ranging medical marijuana program more than a decade earlier. 

But what sets apart the Mid-Atlantic from the rest of country is its close-knit economic relationship, DeVeaux said. New Yorkers regularly visit the Jersey Shore, despite having beaches in their own state.

And New Jerseyans will pay extra to see a play or musical in New York City just based on the location. 

The same will be true with marijuana, DeVeaux said: The regional economy is stronger with more states legalizing and selling marijuana, no matter which state is first. 

"As long as we do it right, I don't think we'll be hurt by New York's entrance into the adult use space," he said. "We are a regional economy. We are one great big tri-state economic corridor, and New Jersey is smack dab in the middle."