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As New Jersey approaches the two-year anniversary of its recreational cannabis market launch this April and adult-use revenue continues to rise, regulators recently announced a new incentive for residents to secure their medical cards.
The New Jersey Cannabis Regulatory Commission (NJ-CRC) announced last week that signup and renewal for its new digital medical cards will be free. According to the commission, the new digital cards will begin rolling out in a few weeks and were introduced to prioritize patient accessibility and convenience.
The digital cards can be presented on a mobile device, eliminating the risk of losing or damaging a physical card while also enhancing accessibility, the commission says.
Changes to New Jersey’s Medical Cannabis Program
Those who would still like a physical medical card are still in for a bargain, as the NJ-CRC also recently reduced its physical registration fees to $10 — they will not be required to pay again until renewal two years later, which is also a $10 fee.
The entire announcement touches on a number of other topics related to New Jersey medical cannabis, with the last header hitting on “Satisfaction Among Program Participants.” It notes a recent survey, conducted by the commission, that found less than 9% of 1,000 surveyed patients said they were unsatisfied with the service they received after contacting Patient Services at the NJ-CRC.
“While many respondents shared concerns about the health care provider fees, product prices, and product availability, more than half said they participate in the program to enjoy the lower price they get from regular patient discounts and not having to pay state taxes, and to have access to the strains and products available only to patients,” the commission states in the announcement.
It also encourages readers to look out for dates for medical cannabis program registration clinics, which are set to be held across New Jersey in the coming months.
New Jersey’s Declining Medical Cannabis Market
Looking at New Jersey cannabis sales trends, the reduction in registration and renewal fees may not come as a shock. New York similarly waived its $50 medical cannabis fee in 2022, the year after it legalized recreational cannabis.
And as New Jersey’s recreational cannabis market has continued to blossom, boosting overall sales numbers, its medical sales are gradually declining.
In April 2022, when recreational sales launched in New Jersey, there were 128,548 total patients in the state. That number in January 2024 was only 88,670, approximately a 31% decrease in less than two years.
While medical sales numbers for 2023 Q4 are not yet available, looking at year-over-year comparisons of Q3 also provides some context for just how stark this change is. Medical sales for 2022 Q3 came to about $61.1 million, while 2023 Q3 was less than half that amount at approximately $29.2 million.
Conversely, recreational sales year-over-year for the same periods increased from approximately $177.7 million to $206.1 million, for 2022 and 2023’s third quarters respectively.
Potential Incentive for Patient Enrollment
While the NJ-CRC did not make any explicit mentions of sales trends and the decline of medical cannabis sales numbers, it’s likely that these moves were made in part to encourage more residents to take advantage of the state’s medical cannabis program.
As regions introduce their own legal recreational cannabis markets, allowing access for anyone over 21 years old with a valid ID, consumers in legal cannabis states often wonder about the need for a medical card.
One of the main perks for many is avoiding the taxes levied on recreational products, as mentioned by the commission in their announcement.
In New Jersey, recreational cannabis products are subject to the standard 6.625% sales tax, along with the Social Equity Excise Fee which changes based on the average price of cannabis — as of Jan. 1, 2024, the fee was updated to $1.24 per ounce. Municipalities can also charge a 2% transfer fee on cannabis sales that occur within their borders.
These taxes may not seem extreme given the additional taxes in some other states — Washington State has the highest cannabis taxes in the continental U.S. with its 37% excise tax, for example.
While the tax rates may not be the highest, New Jersey infamously has some of the most expensive recreational cannabis in the country. Aside from the tax relief, medical programs tend to have cheaper pricing along with specialized products, higher dosage options and more.
Whether these efforts will actually reverse New Jersey’s medical cannabis market trends remains to be seen; the decline in medical sales and program enrollment numbers tends to be a recurring theme in medical-only states that legalize recreational cannabis.
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