Half Of New Jersey Towns Poised To Ban Cannabis Businesses

New Jerseyans overwhelmingly wanted the right to buy legal cannabis. Just not in their own towns—not yet, anyway. 

Faced with an August 21st deadline to opt out of cannabis operations or be locked into it for five years, almost half of the state’s municipalities are foregoing the immediate chance to open marijuana retail, wholesale, or manufacturing facilities— and therefore the chance to collect as much as a 2% tax and licensing fees. 

Some officials say they fear cannabis businesses will adversely affect children, but others say it’s just a wait-and-see approach: Wait to see what happens when the marijuana store opens in the cannabis friendly town next door, and then see if that’s something they want to take advantage of at home. Towns that opt out by August 21st can reverse course at any time, but municipalities that do nothing can’t restrict the businesses for five years after the deadline. 

In Bergen County, 10 contiguous towns jointly decided to ban cannabis stores in part because they’d be located near residential neighborhoods and “places of public accommodation frequented by the public, including children.” In Union City, Mayor Brian Stack is stopping marijuana operations from opening in his town even though he is also a state senator who cast a “yes” vote for marijuana legalization. 

And at the Jersey Shore, one councilman—a medical marijuana patient—opposed opening stores in his town, saying it would be a “smokefest on the beaches and boardwalk,” while a local mayor said residents “didn’t vote for 17-year-olds to become drug users, they didn’t vote for some overtaxed product so some MS-13 gangbanger can come in here and undercut” the legal market.

Yet the messaging from officials in many of the 240 towns that the state League of Municipalities estimates have banned cannabis businesses is simpler: They say they don’t want to approve anything before the state’s new Cannabis Regulatory Commission has even issued regulations about how these operations will work. Those regulations are also due to come out by August 21st. 

“The people who want marijuana in Livingston are very vocal and really want it,” said Mayor Shawn Klein of Livingston, which is opting out of cannabis for now. “I thought it was important to be very clear about what are the open questions, because they’re worried we’re going to use this as a delay tactic.” 

Klein said there’s no delay tactic—he thinks the town could have cannabis stores in business districts and manufacturing in industrial zones at some point in the future. But he’s waiting on answers from the Cannabis Regulatory Commission on security protocols, parking requirements, and whether the town can enforce regulations by revoking licenses from businesses. 

“We just don’t know what we’re allowed to do as a town,” he said. 

Middletown Mayor Tony Perry asked at a recent council meeting: “How far should a marijuana dispensary be from a school? How far should it be from a house of worship? How far should it be from a park? … The people of this town, whether they voted for it or didn’t, did not sign up for enabling legislation that gave no insight, no authority… Typical Trenton.”

But the approximately 60 towns that have opted in are simply writing their own rules, hoping to be early adopters and raise enough tax revenue either from weed warehouses or stores to dramatically reduce local taxes. In Newark, the city council last week preliminarily approved cannabis operations with a slew of regulations on security, odor management, and location. 

Other towns are allowing some of the six kinds of cannabis businesses, but not others. Flemington, for example, is allowing stores but not wholesalers. 

Bill Caruso, an attorney and lobbyist who has long worked on cannabis legalization in the state, said some rural towns are considering allowing marijuana greenhouses on existing farms. “They’re not interested in a retail component, they’re not interested in a major warehouse coming in to do processing,” he said. But they may be interested in boosting the local blueberry industry with greenhouses filled with the new cannabis cash crop in order to avoid having more family farms turn into residential subdivisions. 

“I’ve counseled towns on this that you can ban it, but please know you’re not banning the delivery of it in your town, you’re just banning basically the ability to reap tax revenue out of this,” Caruso said. 

Despite the municipalities initially opting out, there will be plenty of places to purchase cannabis. Several major municipalities are on board—Newark, Atlantic City, Hoboken, Trenton, and Jersey City. In addition to levying taxes on cannabis operations, Jersey City is imposing significant fees: $15,000 annually for a retailer and $25,000 for a cannabis consumption lounge. 

But there is no consistency to how towns—rural or suburban, Democratic or Republican—are handling this. Two liberal towns where voters last year approved a marijuana ballot question by a whopping 84% apiece— South Orange and Asbury Park—are opting out. In Paterson, the mayor envisioned as many as 36 cannabis businesses bringing in an estimated $1.5 million in annual revenue, but after opposition from school board members and leaders from the Muslim community, the city appears likely to ban all operations. 

The first retail establishments will likely be medical dispensaries that open up for all 21-and-older users as long as the businesses can prove they have enough supply for their patients. That won’t happen until the end of the year, or next. 

New York is also in the process of legalizing marijuana, and towns there have until December 31st to keep the operations out of their municipalities.