Market Maturity Brings Pricing Pressure

New Jersey’s cannabis market is showing signs of maturity, according to a presentation by Headset CEO Cy Scott at the recent Ignite NJ event, saying the overall revenue hit the billion-dollar mark in 2025 and is growing nominally.

Similar to other markets in the growth cycle, while more customers are visiting dispensaries and transactions are slightly increasing, many individual retailers are seeing declining sales. Scott said this disconnect reflects intensifying price pressure, as shoppers spend less per visit amid growing competition and discounting.

Other factors contributing to the squeeze include retail saturation. Because municipalities can opt out of cannabis businesses, some regions have become retail deserts while others face dense clusters of competing dispensaries.

At the same time, performance varies widely across operators: some stores are significantly outperforming the market, while others are struggling, highlighting the growing importance of location, strategy, and execution in a maturing landscape.

Comparisons with neighboring New York also suggest continued downward pressure on pricing as the two markets evolve side by side.

Scott warned that price compression is beginning to accelerate in the region. While New Jersey has been able to hang onto stable pricing, that advantage is starting to erode, particularly as neighboring New York loosens discounting rules, which typically accelerate margin pressure. In this environment, he emphasized that traffic and customer retention become critical: with smaller baskets becoming the norm, operators must focus on bringing shoppers back more frequently and building loyalty.

“The pace of New York growth is so extreme, I think it’s going to impact New Jersey,” says Scott.

Jeremy Rivera, CEO of Terp Bros., a dispensary in Queens, NY, said the two markets have long operated as a shared regional economy. Everybody from New York City travels to New Jersey, and we are in our legacy games. A lot of us in New Jersey are legacy operators who were purchasing cannabis from New York City and vice versa. “So right now, as I see it, as an operator in New York, a lot of us are trying to take our small mom-and-pop businesses, see opportunities in New Jersey, and expand and scale into a state that’s very close,” he added.

A Bi-Directional Cannabis Ecosystem

Panelists at Ignite NJ repeatedly emphasized that New York and New Jersey function less like separate markets and more like a tightly connected regional ecosystem. “It’s bi-directional,” said David Vautrin, noting that operators are actively sharing SOPs, business models, and branding strategies across state lines as multi-state footprints in the Northeast take shape. Retailers and brands are also expanding across state lines due to proximity and overlapping customer bases. Rivera said scaling into New Jersey is often the easiest next step: “Our easiest ability to scale is with our neighbor,” he explained, pointing to the constant flow of consumers, data, and brand awareness moving between the two states.

Speakers said each market also offers distinct advantages that shape cross-border activity. New Jersey provides a more stable operating environment and stronger margins for many businesses, while New York’s licensing structure has fueled a surge of smaller, niche brands. As a result, shoppers frequently switch between states based on selection, proximity, and price—but panelists stressed that long-term success depends less on pricing arbitrage and more on building strong brands, educating customers, and fostering customer loyalty. As Vautrin put it, “If you sell on price, you lose on price.”

Speakers noted that consumer behavior routinely crosses state lines, driven primarily by convenience, product selection, and market differences. Rivera said retailers in New York are actively targeting nearby New Jersey shoppers, particularly in border regions, and are seeing strong digital traffic from across the Hudson. He added that while New Jersey may offer slightly lower prices in some cases, New York is attracting consumers with a wider range of small-batch and niche brands made possible by its micro-license structure. “Consumers are consumers—they want good weed,” Rivera said, explaining that many are willing to travel for unique products they can’t find locally. Panelists agreed that proximity remains a powerful factor, with Jason Starr noting that purchasing patterns often reflect simple geographic convenience as much as pricing or regulation.

Brands, Consumers, and the Future Northeast Corridor

Panelists said brands operating across New York and New Jersey will need to balance two distinct—but increasingly overlapping—consumer priorities: strong branding and authentic local presence. Jeff Freeman, co-founder of Mfused, noted that both markets are evolving toward a mix of high-volume commercial products that “keep the lights on” and smaller, community-driven craft offerings that build loyalty. Over time, he expects operators in both states to demand deeper local engagement, experiences, and collaborations, trends that will likely favor smaller-batch and hyper-localized brands.

At the same time, speakers emphasized that branding remains especially powerful in New York. “New York is heavy, heavy branding—your brand speaks for you,” said Keshawn Warner, co-founder, Dazed Cannabis, explaining that many retailers entering New Jersey are initially selecting partners based on brand recognition and proven performance across the Hudson. That dynamic is increasingly working both ways, as retailers also seek to elevate emerging local brands that can eventually expand regionally, creating what Warner described as a “circle” of cross-border brand growth.

Still, panelists cautioned that not every brand will survive as the markets mature. Vautrin noted that many of the hundreds of licensed brands in New York exist largely “in name only,” arguing that long-term success will depend on consistent execution, retailer support, and meaningful customer engagement—not just marketing. Looking ahead, speakers agreed the two markets will grow increasingly interdependent, with shared consumers, supply chains, and business infrastructure gradually making them function like a single Northeast cannabis corridor, even as each retains its own identity.

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