The Press of Atlantic City recently raised a crucial question on many business leaders’ minds: ‘When will Atlantic City approve enough weed stores?’ On behalf of the Greater Atlantic City Chamber, we believe it is time for a serious conversation about sustainable growth.
Statements from city officials suggest we’re not alone in our concerns. Atlantic City Cannabis Commission member Kashawn McKinley has acknowledged the risk of oversaturation, stating plainly, “We do not want to oversaturate, and we do not want to set our businesses up to fail.” While the commission was supposed to have a recommendation this past spring for a cap on total cannabis businesses, the message is clear: the current trajectory is unsustainable.
We’ve watched with growing concern as Atlantic City rushes headlong toward cannabis market saturation. New Jersey’s cannabis licensing process stands among the most complicated in the nation, layering state regulations over a maze of local requirements across 564 municipalities. Each municipality maintains its own rules for permitting, licensing, and operations – creating an intricate system that demands exceptional resources and sophistication to navigate successfully.
When we have businesses that successfully thread this regulatory needle and invest in Atlantic City, they deserve a fighting chance to succeed. Allowing unfettered competition, especially given the wildly varying resources and capabilities among applicants, won’t create a healthy business ecosystem. Instead, this approach creates a landscape of many failures and few survivors.
The numbers are troubling: nine cannabis businesses currently operate in the twenty-five (25) block-long area of the Green Zone, with approximately 50 applications in various stages of approval. The current approval pace raises several red flags. When we see four cannabis businesses proposed for a single block, as reported by the Press of Atlantic City, we must question the sustainability of this approach. No market analysis supports this density. There’s value misalignment between local governing bodies and the State’s Cannabis Regulatory Commission. They are tasked with operationalizing as many businesses as possible, only considering what cap a municipality sets on itself. At the end of the day, they are not responsible for determining who succeeds and who doesn’t.
The hard truth is that a compact city cannot sustainably support anywhere close to 50 cannabis operations. Simple economics dictate that oversaturation will force some businesses to close, leaving us with exactly what we sought to eliminate: vacant storefronts. Failed businesses don’t just impact their owners, either –they damage our ability to attract future investors across all sectors. While the Atlantic City region offers strong potential for cannabis business success, attracting additional investment becomes increasingly difficult when market oversaturation threatens to implode the industry.
To be clear: The Chamber supports the cannabis industry as part of a diverse business community. These existing operations have already demonstrated their value by revitalizing vacant properties and creating jobs. Each operational cannabis business represents roughly a million-dollar investment, plus a $25,000 application fee. These small business owners believed in Atlantic City’s potential and took significant risks to establish their businesses here. As such, they deserve the opportunity to prove their business models before we recklessly flood the market with competitors.
The administration’s stated goal of making Atlantic City the “cannabis capital of the East” fundamentally misunderstands Atlantic City’s appeal and tourism potential. Atlantic City has spent decades building its brand as a premier meeting, convention, and entertainment destination offering gaming, world-class dining, shopping, and outdoor recreation activities. Our tourism industry partners have serious reservations about hanging our destination marketing hat on cannabis. It should be positioned as one amenity in our diverse entertainment portfolio, not the defining characteristic.
The solution isn’t to halt cannabis development entirely – but we must implement reasonable controls:
- Establish buffer requirements between cannabis operations
- Set evidence-based caps on total licenses
- Commission a market study to determine sustainable business density
- Temporarily pause new approvals while developing these guidelines
- Get feedback from current operators and prospective licensees in the pipeline to see what they need to succeed
Some argue that market forces should determine winners and losers. With this many potential businesses on the horizon, they certainly will. But we need not exacerbate the coming market shakeout where only those with the deepest pockets are likely to survive.
The choice before us isn’t whether or not to support cannabis businesses – we do. The real question is whether we’ll manage this new industry’s growth thoughtfully or allow oversaturation to undermine its potential benefits. To this end, the Greater Atlantic City Chamber advocates for measured expansion that serves both business and community interests. Atlantic City’s economic future depends on getting this balance right.
