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Rules Make Location a Problem for NJ Cannabis License Applicants

State regulations, strict town laws, and confusion are making it difficult for NJ cannabis license applicants to find a good business location.

“The most difficult thing… is having a client identify a site that is viable,” Director of Porzio Governmental Affairs lobbying firm Beau Huch said.

Less than 200 of New Jersey’s 565 towns allow any sort of cannabis company to be based within their borders.

(To get the list of where New Jersey towns stand on cannabis, join our Patreon!)

The problem is that New Jersey has a strong tradition of home rule whereby towns have a lot of autonomy. To make matters worse, many of the towns that will allow cannabis businesses are not allowing many.

Real Cannabis Entrepreneur Co-founder Gary George is having trouble finding a good location in North Brunswick. In that town, “the maximum number of licensed Cannabis Businesses shall be no more than two (2) for each Class of Cannabis Licensed establishment.”

According to the map pictured above, they are only allowing cannabis companies in a few strip malls and industrial areas.

“It really makes it difficult to find a place,” George said.

Problems for NJ Cannabis License Applicants

However, there are even further restrictions imposed by the NJ CRC cannabis license applicants must navigate.

A problem has arisen from the NJ Cannabis Regulatory Commission’s CRC interim regulations that were released in August.

According to their website, the legalization law “prohibits cannabis retailers from being located “in or upon any premises which operate a grocery store, delicatessen, indoor food market, or other store engaging in retail sales of food [or] licensed retail sales of alcoholic beverages.

It’s clear dispensaries nor lounges are allowed to sell food or liquor.

Huch pointed out the interim state regulations seem to bar a cannabis company from being in a strip mall with a separate food or liquor business. The rules say cannabis companies cannot sell food or liquor in the same building.

Limited Options

George noted North Brunswick only allows cannabis companies in a few strip malls with businesses selling food or liquor. He noted that under that interpretation, if a bookstore sells coffee and cookies or a larger retailer has a fast-food franchise inside, that could create problems for an NJ cannabis license applicant seeking to rent space in the same strip mall.

“Zoning is so restrictive, there’s literally nothing there,” George said about North Brunswick.

The North Brunswick Council has approved one of the two licenses per category. They will permit a dispensary license and a cultivation license.

The NJCRC released a FAQ that says, “The cannabis business should have its own entrance and/or access point that is not accessible by other businesses in the strip mall,”

“Additionally, applicants must adhere to any municipal restrictions on being located in these areas. Applicants should also note that it will need to be able to comply with other laws and regulations, including requirements to verify patrons’ age and restrictions on displays, signage, and advertisements,” they said.

“The CRC does prohibit cannabis businesses from being located in shopping malls where there is an open corridor or service corridor that allows access between the cannabis business and other stores, and/or retail sales of food and/or alcoholic beverages,” they said on their site.

Questions Linger

The enclosed malls are thought to be “shopping malls” versus strip malls which are open to the elements.

While the FAQ clarified dispensaries are allowed in strip malls, Huch is concerned about an open or service corridor.

“That one line … applies to almost all the real estate,” he said.

Usually, in the back of a strip mall, there is space for trucks to drop off goods via a back door or loading dock. You usually need a key or a code to open.

Most malls and similar buildings have an interior corridor connecting all the stores with their open corridor.

“Put out several basic CAD (Computer-Aided Design) drawings of what you can and cannot do,” Huch suggested.

He noted the ideal location for a cannabis company is a separate brick-and-mortar building.

The NJ cannabis license applicants who find a location are those with deeper pockets who can hire consultants, lawyers, and lobbyists.

Towns Confused

Towns remain in need of guidance. But the CRC need to hire staff to fill its offices. It is likely made worse by the ongoing pandemic. The lack of guidance creates problems for cannabis license applicants.

Huch noted towns thought cannabis companies could get a State license and then compete on the local level. The CRC’s interim state regulations say it’s the opposite.

“Towns don’t know who to communicate with,” Huch said.

Throughout the state, cannabis market locations issues are a problem.

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