Overdue invoices are straining operators in New Jersey's legal cannabis dispensary market, and payment on an issued invoice takes a minimum of 30 days after a deal is done, according to accounts reported by Heady NJ. According to Cannabiz Credit, 38.4% of the total New Jersey cannabis market accounts receivable money that is due is stuck at 91 plus days past due, and the average time to get paid is 55.6 days.
Overdue cannabis invoices strain New Jersey dispensary market, operators say
Overdue invoices are straining operators in New Jersey's legal cannabis dispensary market, and payment on an issued invoice takes a minimum of 30 days after a deal is done, according to accounts reported by Heady NJ. According to Cannabiz Credit, 38.4% of the total New Jersey cannabis market accounts receivable money that is due is stuck at 91 plus days past due, and the average time to get paid is 55.6 days.
Heady NJ reported that few New Jersey dispensaries can pay cash on delivery, and that many seek to acquire products on credit and pay the money owed once the products are sold. The outlet said it has heard about the issue from many legal New Jersey cannabis operators over a long period, but that few operators want to name on the record who owes them what.
Heady NJ reported there was almost a fight at the recent NECANN cannabis industry convention over the issue, and that it got loud enough that people by the registration desk looked to see what would happen before the situation calmed.
The outlet listed possible reasons for the volume of overdue invoices: some dispensary operators ordered too many New Jersey cannabis products that are not moving quickly enough; operators who worked for years to open a dispensary carry many expenses and likely want to pay themselves well; and the pattern likely reflects many companies that could be near closing.
Heady NJ reported that capital, or simply money, and the lack of it, has been a significant issue for businesspeople in the New Jersey cannabis industry and across American state-legal markets for years. It said the ongoing federal prohibition of underground legacy marijuana and state-legal adult-use cannabis has made many banks wary of lending to businesses in the industry, that others are similarly hesitant to do business with cannabis businesses, and that Section 280-E of the federal IRS Tax Code means licensed cannabis businesses cannot deduct expenses from their taxes.
Heady NJ reported that the New York Office of Cannabis Management, which it said does most of what the New Jersey Cannabis Regulatory Commission does, has a section on its website devoted to Delinquent Payment Reporting, but that it appears to want to keep the list itself private.
- The source does not name the dispensaries or wholesalers reported to owe money.
- The source does not state the total dollar value of the overdue invoices in the New Jersey cannabis market.
- The source does not state the period the Cannabiz Credit figures cover or how the data were collected.
- The source does not state whether the New Jersey Cannabis Regulatory Commission has taken or planned any action on payment issues.
- The source does not state how many operators reported nonpayment, or how many companies are near closing.
- The source attributes several accounts of nonpayment to operators who were not named.