NJ’s Wannabe Pot Purveyors Watch Dollars Go Up In Smoke

0
96
New Jersey State House in Trenton Photo: Shutterstock

Entrepreneurs banking on NJ Gov. Phil Murphy’s campaign promise to legalize marijuana in the Garden State are starting to feel burned.

Shergoh Alkilani, a real estate developer based in Cliffside Park, said he’s invested roughly $1 million in a pot manufacturing facility in Bergen County — with nothing to show for it and no sense of when it might open, if ever.

Alkilani, whose Alkova Companies focuses on urban development projects, is under contract to purchase an existing manufacturing facility for around $10 million that he would use for the cultivation, production and sale of cannabis, he told The Post.

But with the marijuana legalization measure being “tossed around like a baked potato,” he has been unable to close on the deal.

That’s despite having already spent more than “a half-million dollars” on lawyers, consultants and “due diligence” — in addition to the more than $500,000 he’s spent trying to procure one of the coveted licenses required to grow, process and sell marijuana in the state, he told The Post.

Murphy campaigned for the governor’s office in 2017 on promises to legalize pot for recreational purposes by the end of 2018. But a vote on a bill to legalize the drug fell through in March — and now the issue isn’t expected to come up again unless Murphy takes it directly to voters in 2020.

Alkilani is not alone in his frustrations. Ken VandeVrede, CEO of HillviewMed, a medical marijuana grower, has been busy upgrading and retrofitting a 9-acre greenhouse facility in Pequannock to serve the recreational weed market, which could potentially mean millions of customers as opposed to the roughly 50,000 or so who can avail themselves of medical marijuana in the state, he said.

Every piece of machinery he needs to install costs between $50,000 and $75,000 because the change from growing basil to marijuana requires entirely new lighting and ventilation systems, he said.

NJ’s failure to get the bill passed isn’t bankrupting him, but “it is putting a pinch on us,” he told The Post.

If recreational pot ever gets approved in NJ, experts estimate the adult-use cannabis business in the Garden State will grow to be a $3 billion to $4 billion enterprise. That has lured savvy entrepreneurs to plow money into businesses that may never get off the ground.

”The longer this drags on, it’s very easy to burn through your money,” said Tara Sargente, executive director of the Trenton-based New Jersey CannaBusiness Association, the state’s first and largest pot advocacy organization.

Sargente noted that NJ Senate President Steve Sweeney said last week that there would be a last-ditch effort to get the bill passed in 2019 — during a lame-duck session of the Legislature late this year or early 2020 — but chances of getting the votes for passage are so-so at best.

Of course, opponents of recreational pot say there will be far bigger problems to contend with if the bill gets passed than a few business people who spent money on a potential pipe dream.

Sen. Ronald Rice (D-Newark), for example, has warned that the legalization of marijuana will simply lead to “marijuana bodegas” that will become a plague on poorer neighborhoods.

“New Jersey is not Colorado. The demographics are different,” Rice told his legislative colleagues in an open letter in March.

In addition to asserting how much the drug would hurt poor communities, Rice questioned the impact it could have on NJ’s already crowded highways — a concern shared by Cheryl Ackerman, a licensed medical doctor in NJ.

“I don’t think its a good idea because it can affect some people mentally, affect their reflexes while driving, and be used inappropriately,” Ackerman told The Post.