As cannabis shops multiply, some towns say enough is enough
Business. As legal cannabis sales have expanded rapidly across New York and New Jersey, uneven municipal participation has created clusters of dispensaries in some towns and none in others.
| 04 Feb 2026 | 02:02
Marijuana growing at a Pharmacann facility in Montgomery, NY, which supplies dispensaries. Photo: Michael Bloom
When New York and New Jersey legalized cannabis sales in 2021, the move set off rapid regional growth in an industry once considered taboo. Four years later, rising revenues and an expanding retail footprint have prompted a new question: Is there such a thing as too much legal cannabis?
Both New York and New Jersey allow municipalities to opt out of hosting cannabis businesses, a provision that has shaped an uneven local landscape. In Sussex County, 16 of 24 New Jersey towns initially opted out, while others including Andover Borough, Andover Township, Frankford, Fredon, Newton, Sussex and Vernon allowed some level of cannabis commerce.
Some towns are reconsidering. Stanhope opted in during April 2025 after a 2024 referendum showed public support, though no shops have opened.
Sparta Township recently opted out of the regulations for a second time; first in 2021, and again in December 2025, repealing an April 2025 ordinance that would have allowed a limited number and class of cannabis businesses in the township. The repeal came after a November 2025 public referendum voted strongly against cannabis businesses; the town council voted on Dec. 9 to pass the repeal, citing the results of the referendum and the proximity of dispensaries in nearby towns as the driving factors behind the repeal.
“I think our residents spoke very clearly,” Sparta Councilman Mark Scott said at the meeting. “They don’t want cannabis sales in town.”
The Sparta Town Council will revisit whether to allow cannabis shops in 2026.
Home delivery
Home delivery continues to be a popular option for those without a licensed dispensary in town. Doobiez, a West Milford dispensary, offers delivery to several New Jersey counties as an integral part of its business model, as does its fellow West Milford shop, Jersey Roots.
The delivery option allows these shops to extend their reach to parts of the county where dispensaries are still scarcer. New Jersey’s cannabis rules state that even if a municipality has opted out of having businesses within its borders, towns cannot prohibit in-state home delivery of products.
‘Unbalanced map’ can skew perspectives
The ability to opt out of cannabis businesses has led to a bumper crop of dispensaries in some areas, but a dearth of them in others. This “unbalanced map” can misrepresent the abundance of cannabis shops throughout the region. One example of this is along a stretch of State Route 206 through Andover Township and Andover Borough in Sussex County, where one can find soon-to-be four options for retail cannabis within a four-mile stretch of highway.
Similarly, West Milford in Passaic County has three options within three miles along and just off Union Valley Road —the aforementioned Doobiez and Jersey Roots, as well as 4Twenty Somewhere. West Milford’s cannabis ordinance allows for up to ten dispensaries within municipal limits, meaning more shops could be on the way.
While it would seem that too much competition would be bad for business, shops continue to open, and revenues continue to rise. New Jersey cannabis shops now number more than 190, with establishments in every county. And while the numbers have yet to be reported for 2025, sales surpassed $1 billion in 2024 and more than $2 billion since the regulations began, with no signs of slowing.
“The continued growth of New Jersey’s cannabis market reflects our dedication to creating a marketplace that benefits everyone—consumers, businesses and communities alike,” New Jersey Cannabis Regulatory Commission Chair (NJ-CRC) Dianna Houenou said in a press release. “We are setting a standard for what a thriving, responsible cannabis industry should look like.”
In New York, dispensary numbers grew from fewer than 50 stores at the end of 2023 to more than 550 at the end of 2025.
But like New Jersey, those shops are heavily concentrated in urban areas like New York City and the Capital District, with fewer in suburban and rural regions.
Industry growth in Orange County took place primarily in 2025; at the start of that year, there were only two licensed dispensaries in the county. Today there are now retail dispensaries in Newburgh, New Hampton, Wawayanda, Warwick and Port Jervis. Middletown also has a handful of working cannabis shops with more waiting in the wings.
New York also shows revenue growth similar to New Jersey, ending 2025 with $2.5 billion in sales since the start of the regulations, while also more than doubling the number of licensed dispensaries each year.
“Surpassing $2.5 billion in adult-use sales is a major milestone,” Susan Filburn, the acting executive director of the New York State Office of Cannabis Management said in a report. “Our focus moving forward is ensuring this growth remains responsible, transparent and grounded in public health and safety, while continuing to deliver opportunity and reinvestment to the communities most impacted by prohibition.”
Cannabis shops may soon be ubiquitous
As municipalities continue to reap the benefits of business tax ratables and the state commissions send tax revenue back into communities, more towns, such as Stanhope, may begin to opt back in to the regulations.
With revenues rising and tax benefits flowing back to communities, more towns may choose to opt in — potentially making cannabis shops as common as bagel stores or pizzerias.
Where does the tax revenue go?
New York
New York imposes a 9 percent state excise tax and a 4 percent local tax on the sale of cannabis products.
The revenue from the 9 percent tax support statewide initiatives regardless of whether towns have opted in or opted out of allowing cannabis businesses.
This is broken down into three categories:
• 40 percent goes to support the New York State educational system;
• 40 percent funds community reinvestment grants;
• and the remaining 20 percent is used for drug treatment and public health programming.
The 4 percent local tax goes to the communities that have opted into having cannabis businesses.
Each county with participating municipalities keeps 25 percent of those funds and distributes 75 percent directly to the towns with cannabis dispensaries.
From April 2023 through Dec 2025, upwards of $87 million has been distributed in New York communities; $10.3 million of that was distributed in the Mid-Hudson Valley.
New Jersey
New Jersey’s cannabis tax structure is slightly more complex than New York’s.
The three-part tax includes:
• regular New Jersey sales tax of 6.625 percent;
• a wholesale flat-rate of $2.50 per ounce Social Equity Excise Fee (SEEF), which is collected when cultivators sell their products to retailers; and
• an additional 2 percent municipal sales tax that opt-in towns may choose to impose on their cannabis businesses.
Towns that choose to impose the 2 percent local tax keep those revenues for use within their communities.
The state sales tax revenues, as with other industries, go into the state general fund to support public health, education, transportation and other priority programs statewide, to be allocated in the annual budget.
The SEEF funds are distributed to communities that were disproportionately impacted by cannabis laws prior to 2021’s decriminalization. These funds are used to support community reinvestment, youth drug and violence prevention initiatives and public health education.
To date, more than $6 million in SEEF funds have been collected, which the NJCRC makes recommendations for usage to New Jersey’s legislators for budget considerations.
Sales tax revenues reached $123 million through 2024; 2025 numbers have not yet been released by the NJCRC or the New Jersey Department of Taxation.
Pennsylvania
Recreational marijuana use and sale are illegal in Pennsylvania. The Pennsylvania House of Representatives introduced a bill in 2025 referred to as the “State Run Model” which Spotlight PA in its reporting referred to as “dead on arrival” in the Senate. The Senate has a separate bi-partisan bill to legalize marijuana.