Atlantic City Sets Limit on Adult-Use Marijuana Retailers Amid Market Saturation Concerns
ATLANTIC CITY, N.J. — Atlantic City officials have put the brakes on the city’s fast-growing recreational cannabis retail scene, adopting a hard cap on the number of adult-use dispensaries allowed to operate as local leaders and some operators raise concerns about saturation and long-term viability.
On Oct. 22, the Atlantic City Council unanimously adopted Ordinance No. 87 of 2025, which limits the city to 16 total Class 5 cannabis retail licenses. The ordinance splits that total into 12 standard (Class 5) retailer licenses and four microbusiness (Class 5) retailer licenses, creating a fixed ceiling for the number of recreational storefronts permitted in the city.
Backers of the cap have framed it as a market-stability move aimed at preventing a “race to the bottom” in pricing and ensuring retailers can maintain compliant operations in a heavily regulated industry. The cap also reflects Atlantic City’s unique cannabis economy: a relatively small year-round population that experiences major seasonal swings as visitors flood casino corridors, the Boardwalk, and entertainment districts.
The push for limits was informed by a city-commissioned research study led by Stockton University’s cannabis studies program. In the report dated June 23, 2025, researchers described Atlantic City’s retail landscape as already dense, citing 15 dispensaries operating at the time, several more expected to open soon, and approximately 20 additional licenses granted. The study warned that unchecked growth could threaten the survival of existing operators, discourage long-term investment, and make it harder for the city to guide the industry’s development. It recommended an immediate but “dynamic” cap—a baseline limit with the option to revisit and adjust based on market data, community needs, and broader legalization trends.
Atlantic City’s cap also highlights how New Jersey’s legal market is shaped by both state and local decision-making. While the state’s Cannabis Regulatory Commission oversees statewide licensing, municipalities can opt into adult-use cannabis and impose local ordinances governing where and how businesses can operate. Atlantic City emphasizes that applicants must be licensed by both the state and the city and that the city has established local review processes that provide advisory input to municipal decision-makers.
For consumers, the ordinance does not change what is legal to purchase under New Jersey law, but it could affect how many storefront options are available—particularly in high-traffic tourist areas where dispensaries have clustered. Under state rules, dispensaries can sell up to the equivalent of one ounce (28.35 grams) of usable cannabis per transaction, along with defined equivalent limits for concentrates and cannabis-infused ingestibles.
Industry observers say the cap could reshape the competitive landscape for would-be entrants who have not yet secured a place in Atlantic City’s retail roster while giving current operators some protection from further dilution. City leaders and researchers have pointed to ongoing monitoring—such as foot traffic and seasonal demand patterns—as the next test of whether 16 retailers is the right number for the city over time.