In my last post, I discussed how there can be federal barriers preventing certain businesses from entering the cannabis industry, despite state legalization. Here, we discuss the importance of considering local laws.
Just like other businesses, one of the biggest, and most important, challenges a cannabis business may face is identifying a suitable location to operate. Many municipalities have openly endorsed marijuana businesses, while others simply don’t want it. The list of municipalities in New Jersey that have said “no” to marijuana is growing. The latest report we have seen lists 30 municipalities that have formally banned, or their officials have voted against, marijuana businesses (under the pending bills, those municipalities saying “no” will not be entitled to share in tax revenues generated by marijuana sales).
So a cannabis business can simply pick from the other 535 municipalities to locate their facility, right? Yes, but that is just the first step. If you are building a new facility, you will likely need site plan approval. You must also consider the local zoning ordinances to ensure your marijuana business is a permitted use in the area of town where you wish to operate, that you comply with allowed lot and building sizes and heights, you have appropriate setbacks, and that you adhere to parking requirements, to name a few. Site plan approval and zoning approval can be costly and time-consuming hurdles, each with its own unique set of challenges. Other local laws, such as days and hours of retail operations (e.g. Bergen County blue laws) also need to be considered.
These issues must be dealt with head on. In fact, the application for the six additional Alternative Treatment Centers (ATC) requires applicants to state whether they have received written verification from the municipality’s governing body where intend to operate, and if not, submit your plan to establish approval within 90 days . This does not mean that you must submit formal approvals or resolutions, but at a minimum, some form of documentation evidencing the municipal government is in favor of a cannabis business in the municipality must be presented with the application. Thus, it is critical that you are having a dialogue with municipal officials and they are at least “on board” with your proposed plan. This applies equally to businesses seeking to become one of the six new ATCs, as well as those that are hoping to open a medical or recreational facility if Senator Scutari’s combined bill (or something similar) is passed in the near future.
Although informal approval by municipal officials is just that – informal, and therefore, non-binding – it may be a good indicator that you have found the right location for your business (or perhaps that municipal approval will be a long and arduous haul, and it may be time to start looking at other municipalities).
The ATC application also asks whether the proposed site complies with local codes and ordinances, including but not limited to, compliance with minimum required distances from the closest school, place of worship, playgrounds, and day care facilities. This does not have to be formal zoning approval (although that is of course preferred), but can be a map and/or recitation of how the proposed ATC is in compliance. This further highlights how importance it is to be aware of local laws from the start of your venture.
In sum, whether you are looking to start your business in Roxbury, Flemington, or the Jersey Shore, before committing to a particular locale, it is imperative that you have an understanding of the local laws, and the associated costs and burdens that lie ahead.
Keep an eye out for my colleague, Bill Beneduce’ s, upcoming post which will discuss another local cannabis issue.
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