The business of weed, from the medical marijuana industry to the black market


Whether its legal, illegal, medical or recreational, the marijuana industry means business.

As lawmakers debate legalizing marijuana in New Jersey, the players who stand to be impacted — from businesspeople already invested in the medical industry to black market dealers — are keeping a close eye on how things develop.


Over-the-counter weed in New Jersey could mean stiff competition for black market dealers in both the Garden State and neighboring New York.

A Staten Island dealer, however, scoffed at the idea he’d be put out of business.

“A big company can sit there and grow all the weed they want, but we’re still going to grow, too, and we’re still gonna make it cheaper,” the 25-year-old man who referred to himself as “Joey” said in a video interview with the Advance.

But only time will tell.

Joshua Cisneros, who was a dealer in Oregon, said he voted against legalization there in 2014 out of fear that it could hurt his sales.

Within a couple of years, he was right. As the prices in the stores dropped, he was priced out.

“Eventually, my prices started dropping, dropping, and I’m like, ‘I’m trying to run a business here,'” said Cisneros, who now picks up shifts at a Mexican restaurant in Portland to help pay the bills.

But there remains demand for bootleg weed in Oregon.

Portland State University students — underage and on a limited budget — told the Advance they often search for marijuana on Craigslist.

One 21-year-old student, who went by the name “Jazzy,” mentioned how the marijuana is gifted to people when they purchase other items.

“If you buy the container or the bag, and then it just comes with the weed in it,” he said. “Or it’s like you’re donating them money, and they give [the weed] to you, so it’s not an actual transaction.”


As marijuana becomes more easily accessible, some dealers are opting to sell harder drugs.

At least one mid-level dealer in New York City has upped his supply of heroin in recent months, and pulled back from marijuana, according to a street-level dealer in Brooklyn who works under him.

“Even if you don’t cut [heroin], you still get a better flip and people call you more for it,” said the 33-year-old dealer.

He said it’s become easier to pick up heroin, cocaine and meth by the pound with a phone call to one of multiple delivery services.

He added that the supply of harder drugs up and down the east coast has been more consistent over the past year.

“You go to Vermont, and there’s weed there, but [people] are shooting up crazy heroin,” he said. “And the amount of meth is unbelievable.”

An estimated 93 percent of profits from the heroin trade end up with Mexican cartels, according to a recent Vice report that tracked delivery routes from below the border to locations across the United States, including New York City.


Currently, there are five companies — soon to be six — that make up the medical marijuana industry in New Jersey.

Each company cultivates its own product and has one retail location, serving a total of about 16,000 patients statewide. Some experts have criticized the program established under the Christie administration, saying the locations are too few, the product is too expensive and the qualifying conditions don’t address recovering opioid addicts suffering from chronic pain.

The program was set up to fail,” said Kris Krane, CEO of 4front ventures, an operations and investment firm with offices in Boston and Phoenix. “A lot of patients in New Jersey have been waiting a decade to access medication.”

Recently elected New Jersey Gov. Phil Murphy signed an executive order last month requiring state agencies to evaluate the state’s existing rules within 60 days with an eye toward making marijuana available to more people suffering from more conditions.

If the program is expanded, it would serve an estimated 2 percent of the population, said Krane, which is too much for five, or even six, production facility/dispensaries to handle — meaning additional licenses and business opportunities would likely become available.

In states where marijuana is legal, the number of dispensaries range from more than 400 (Oregon) to more than 800 (Colorado). While too few licenses could create a shortage of product, too many could contribute to an overproduction which has strengthened the black market in some places.

A 2017 analysis by Oregon State Police estimated the state could potentially produce a surplus of cannabis with an estimated street value between $4.7 billion and $9.4 billion.

In Colorado, prosecutors said recently that they busted a 74-person operation producing 100 pounds of marijuana per month — enough to generate $200,000 a month, tax free, for more than four years, according to a USA Today report.

On the other hand, during the early stages of legalization in Nevada, there wasn’t enough product in the stores to meet the demand. The medical dispensaries, which were permitted to sell commercially for recreational use on July 1, reported shortages within the first week.

A “statement of emergency” was issued by the state’s governor, which allowed for the issuance of additional distributor licenses.


Typically, there are a few differences between medical and recreational marijuana in states where it is legal.

Medical patients pay a couple hundred dollars annually for a card, but shop tax-free at any of the state’s dispensaries. In some states, they also can purchase more product at one time.

Despite the tax break, a medicinal user in Oregon who spoke with the Advance said the cost rose in the early stages.

“The price of cannabis went up and the availability of concentrates went down,” said the 31-year-old man during a smoke session with friends inside of his Portland home.

Still, the benefits have been worth the cost, as he recalled a period in his early 20s when he was living with cerebral palsy in a state where weed is illegal. He said certain medications he had been prescribed negatively affected his liver and kidney function.

“I was trying to work full time and I had a lot more pharmaceuticals in my life,” he said. “The quality of my life was just decreasing substantially, so I started looking for work in the Portland area because I knew legalization was happening.”

Currently, medical marijuana is limited to a 30-day supply of cannabis-infused, non-smokable products in New York. But that could change.

Gov. Andrew Cuomo in his 2018 budget plan proposed funding an advisory panel that will recommend whether to legalize recreational marijuana in the Empire State.


When marijuana was legalized in Colorado, the first people to apply for recreational licenses were the same big players who drove the medical marijuana industry — all with serious business backgrounds and the necessary amount of capital.

The state charged an application fee of $5,000, or $500 if the applicant already owned a licensed medical marijuana business. In addition, license fees ranged from $3,750 to $14,000. All of that just to be legal.

The total startup cost for a marijuana shop, including the growing equipment, real estate, security systems and decor, cost anywhere from the hundreds of thousands of dollars to millions.

In Oregon, the Advance toured a grow facility purchased by Sid Gupta. At the time of the tour, about 100,000 square feet was in use, with the potential to fill another 200,000 square feet.

“No one was really willing to invest in such a huge warehouse, or had the capability or know how of what to do with it,” said Eli Cerdon, a brand ambassador at Pistil Point who gave the Advance a tour of the facility. “[Gupta] came across this property and saw a dream.”

But potential jobs in New Jersey aren’t limited to production facilities and storefronts, said Chris Goldstein, a professor at Temple University who formerly served on the board of directors for the National Organization for Reforming Marijuana Laws.

“Just imagine a future where there’s a huge home delivery network,” said Goldstein. “Entry level jobs in the marijuana industry now are much more in the delivery, processing and packaging.”


Colorado dispensaries took in a record $1.51 billion in sales of medical and recreational cannabis, edibles and concentrate products during 2017, according to a Denver Post report.

In Oregon, officials paid out $85 million in marijuana taxes, used to improve schools, public health and police departments, among other things, according to the Oregonian.

Lawmakers in New Jersey point to an estimated $300 million in annual tax revenue, in addition to millions of dollars in savings per year in law enforcement costs.