The State passed the New Jersey Cannabis Regulatory, Enforcement Assistance, and Marketplace Modernization Act (“CREAMM” or the “Act”) which legalizes the recreational use of marijuana by adults 21 years of age or older and establishes a regulatory and licensing scheme for commercial production, distribution, and sale of cannabis items. Under the Act, if the township desires to maintain local control of what may be permitted or prohibited within the township for the next five years, the township is required to adopt some form of regulation.
Section 31b of the Act stipulates: .. any municipal regulation or prohibition must be adopted within 180 days of the effective date of the Act (i.e., by August 22, 2021). The failure to act within 180 days shall mean that for a period of five years thereafter, the growing, cultivating, manufacturing, selling and reselling of cannabis and cannabis items shall be permitted uses in all industrial zones, and the retail selling of cannabis items to consumers shall be a conditional use in all commercial and retail zones.
The Cannabis Regulatory Commission (“CRC”) has published a 160-page initial rule book. However, the tight statutory deadline for filing initial rules did not allow the CRC to include rules on every sector of the cannabis industry. As such, CRC chose to prioritize those sectors that must come first when establishing the new industry. The initial regulations include minimum standards for providing the secure transportation and home delivery of cannabis items. While the rule book is incomplete, CRC is dedicated to ensuring that details for wholesalers, distributors, and delivery service businesses are included in its formal rule proposal, which is expected to be released in the near future.
Accordingly, the township wanted the option to maintain local control of what may be permitted or prohibited within the township. The Township Committee approved an ordinance, which will be amended from time-to time as final rules become available, permitting cannabis establishments, distributors, and delivery services to operate within its borders. This ordinance regulates the number, location, manner, and times of operation of these establishments, distributors, and delivery services. It also establishes civil penalties for the violation of any such regulations, provided the time of operation of delivery services shall be subject only to regulation by the State Cannabis Regulatory Commission.
What are the local requirements for commercial cannabis activity?
The CREAMM Act authorizes municipalities to enact ordinances or regulations governing the number of cannabis establishments within their borders. Each municipality is responsible for establishing and enforcing its own rules and process that a cannabis business must follow to obtain local approval. The Township passed Ordinance 06, 2021 to amend certain general ordinances to include cannabis regulations, which limits the number of recreational dispensaries to no more than two. There is no limit of the number of medical dispensaries, manufacturing facilities, wholesalers or cultivation centers. This ordinance will be amended, from time to time, in the future when the CRC has finalized its rules. Please see Ordinance 06, 2021 for more information.
Was there a deadline for municipalities to decide whether to allow or deny adult-use cannabis in their town?
Yes, there was a statutory deadline. Based on the CREAMM Act, municipalities had until August 21, 2021 (which gave municipalities only 180 days), to decide whether to allow or deny adult-use cannabis in their towns. The CRC has no discretion to extend this deadline.
What happens if a municipality took no action prior to the statutory deadline of August 21, 2021? Can it still act later to regulate the time, place, and manner of cannabis business operations?
Under N.J.S.A. 24:6I-45, if a municipality did not enact an ordinance by August 21, 2021, then cannabis businesses were automatically permitted to operate in the following areas for the next 5 years:
- A cultivator, manufacturer, wholesaler, distributor, or delivery service shall be permitted uses in all industrial zones of the municipality.
- A retailer shall be a conditional use in all commercial zones or retail zones, though they must still meet any applicable zoning ordinance or get a variance in accordance with the “Municipal Land Use Law,” P.L.1975, c.291 (C.40:55D-1 et seq.).
However, a municipality can still pass an ordinance addressing the permissible hours of operation and manner of operation.
Can a business operate legally with just approval from a local municipality instead of obtaining a state license?
No. All legal cannabis operators must receive a license from the NJCRC to conduct cannabis business in New Jersey.
For municipalities that have chosen to allow cannabis businesses to operate, what authority do municipalities have regarding the establishment and operation of a cannabis business?
So long as it does not conflict with the CREAMM Act, a municipality may enact an ordinance or regulation to:
- Determine how many of each class of cannabis businesses are allowed in their jurisdiction;
- Regulate location and hours of operation for cannabis businesses, except for the times of operation of a licensed delivery service. Local regulations may include requirements that a cannabis business premises be a certain distance from the closest church, synagogue, temple, or other place used exclusively for religious worship; or from the closest school, playground, park, or child daycare facility;
- Levy local taxes of up to 2%;
- Institute additional local approval processes, though local fees must be reasonable; and
- Enact civil penalties for violations within the municipality.
Municipalities will also be able to weigh in with the CRC on preferences for license applicants.
How likely is it that CRC will grant a retail dispensary (distribution) license to the township?
Just based on population, not very probable. It is our opinion that Lambertville has a better chance of receiving such a license.
What is the most probable class of cannabis business that may obtain a license from CRC to operate in the township?
The most probable class of cannabis business would be cultivation and/or manufacturing based on the availability of commercial and light industrial tracts along the 31 and 179 corridors.