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Jersey City Council Discusses Cannabis Control Board, Lounges, Tax Revenue

The Jersey City Council reviewed their legal cannabis ordinance, which includes a Cannabis Control Board (CCB) to regulate who will receive a license, and debated what to with tax revenue derived from cannabis sales.

First Assistant Corporation Counsel Nick Strasser explained the ordinance establishes a three-person CCB, all appointed by the mayor, that will serve staggered three-year terms.

He said it would be comparable to the ABC board, which regulates liquor licenses. Those who wish to operate in JC will likely be in touch with Jersey City Supervising Planner Matthew Ward and other city officials as the process continues, Strasser noted.

 Council President Joyce Waterman asked if the political party of the CCB appointees would be considered, to which Strasser said no and that they can add language ensuring the appointee’s impartiality on the applications.

The CCB was not part of the planning board ordinance that was approved unanimously by the planning board last month.

The planning board ordinance allows cannabis cultivations, manufacturers, distributors, wholesalers, and dispensary businesses, as long as all facilities are kept 200 feet from a school.

Ward noted they were purposefully silent on delivery, saying not sure what it would entail, saying it could be like a taxi fleet or Amazon with a fleet of vehicles that need space, compatible to an Uber with drivers using their own vehicles.

All New Jersey municipalities must pass an ordinance regulating cannabis by August 21st, otherwise blanket regulations from the state automatically go into place.

Implementing Cannabis Lounges in Jersey City

Additionally, Ward said cannabis consumption lounges are being created to allow for those in federal housing or renting a place to consume, also noting that dispensaries could operate lounges, as long as dispensary owners meet regulations like cigar lounges.

“In many cases, it might be the only safe space for residents or consumers to consume the product they’re purchasing,” he said, noting the issues those in federal housing and renters might have with consuming cannabis at home.

“Have you spoken to Health and Humans Services and Quality of Life people?” Councilman-at-Large Daniel Rivera asked regarding the ordinance.

Ward said no since the zoning division would enforce regulations.

“There’s going to be a lot of problems because most you don’t remember the 60s,” Ward C Councilman Rich Boggiano said regarding the ordinance.

“They should have been at the table to see how we can do this when it comes to retail. If not, we need to go back to the drawing board,” Watterman added.

Rivera also expressed trepidation about what was in front of the council.

“I like the ordinance. My concern is that I don’t want to get to the finish line, and I really don’t win because all my T’s weren’t crossed, and all my I’s weren’t dotted,” he stated.

“I just want to make sure that the health department is on board, quality of life is on board, so we don’t have to get to the end and have to look back to make sure we did everything right.”

Ward B Councilwoman Mira Prinz-Arey echoed a similar sentiment.

“That would, to me, fall under HHS and Quality of Life as it relates to permitting. I have my concerns regarding consumption lounges.”

Strasser again emphasized the August 21st deadline is rapidly approaching, with Ward adding that he thinks there is still time to coordinate with HHS to make sure everything is going smoothly.

“If you’re concerned about the coordination within the internal city departments and divisions to make sure everything is enforced the way you want it, then we can have those conversations,” Strasser added before Watterman agreed that HHS needs to weigh in on the ordinance.

Strasser said they could opt out temporarily and spend more time crafting the ordinance but again pointed out that doing nothing could be detrimental.

“If we do nothing, then it’s like full steam ahead. We have no restrictions in our city,” he added.

“This is not no easy issue. This is something we really have to think about,” Watterman responded.

During the caucus meeting, it was also noted that public consumption of cannabis is currently prohibited in the ordinance.

“Are those transactions taxed, um, through our ordinances or the state?” Councilman-at-Large Rolando Lavarro asked regarding delivery services.

“We don’t actually tax the delivery. It all goes to the state,” Ward answered.

Strasser said that cannabis trucks or pop-ups would not be possible when asked on the matter by Lavarro, Ward said the state is silent on the matter.

Furthermore, Lavarro asked Strasser to do a cannabis presentation to the Municipal Alliance which handles drug addiction issues, which he chairs.

Ward said it was important to note their microbusiness laws because it promotes equity and entrepreneurship, and they want to give the microbusinesses advantages.

To be approved for a location, public hearings that locals are notified of and are advertised need to be held on cannabis facilities, he added.

Debating the Allocation of Cannabis Tax Revenue

The Jersey City Council held a special meeting to determine how to spend the funds that come from taxing legal marijuana businesses and appeared to find common ground on an initial 50/50 split between the board of education and the social equity.

The council did double duty Monday, discussing the establishment of a Cannabis Control Board in the morning before convening again for a 6 p.m. special meeting to talk about authorizing a transfer and user tax on cannabis sales and transfers.

Ward A Councilwoman Denise Ridley began by saying that Jersey City should “include a social equity component to assist those who have been impacted by marijuana or incarcerated due to marijuana charges.”

She wanted to know how much money would be generated and when it would be available. However, given the unprecedented nature of adult-use cannabis legalization, such figures were not available.

Ridley also noted it was important to know how the public schools will be able to use the money in the classroom, a topic where Ward B Councilwoman Mira Prinz-Arey also weighed in.

“School funding is a long-term equity piece. I know the SDA (School Development Authority) hasn’t been helpful when it comes to our school facilities. So, I think if we are giving a portion of this tax to the schools … that to me has always been really important.”

In addition, she was concerned with helping those who were in jail or had family members in jail.

“Making sure they’re set up for success is paramount to me,” Prinz-Arey added, noting Oakland, California created an effective social equity program worth reviewing as a model.

She added there should be an oversight committee to track the funds, comparable to the Open Space Trust Fund Committee.

Jersey City Ward C Councilman Rich Boggiano initially seemed skeptical of the value of cannabis reform, mentioning traffic accidents in Colorado, before coming around and stating that he would support seeing funding go towards the schools.

“I think one we need to put a portion of this money toward the public schools,” Ward E Councilman James Solomon added, reminding his colleagues that they are currently slated to lose $100 million in state funding next year.

“We have to do everything in our ability to address that,” Solomon also said, acknowledging that the marijuana tax alone wouldn’t be enough to make up the difference.

Additionally, Councilman-at-Large Daniel Rivera said he wasn’t sure if this would necessarily be money well spent.

“We don’t have any type of control ya know, over the budget of the school district. My concern is that ya know, us giving them an open door without any accountability is a little concerning,” At Large Councilman Daniel Rivera said.

He also liked the idea of a committee overseeing and controlling the funds.

“There are teachers in our public schools in the Jersey City public school system, and in the summer, they spend thousands and thousands of dollars of their own money to prepare themselves for a September start. The school system doesn’t provide a lot. That concerns me because their budget is pretty big,” Rivera added.

Council President Joyce Watterman chimed in that she favored both a social justice and a school component.

“School should get something. Social justice should receive something, and there should be some type of oversight,” she stated.

“How do we get this done? What percentage do we think should go where? What type of board structure can we do legally?”

Councilman Rolando Lavarro noted initially, the money was supposed to go to the Jersey City public schools, as he and Solomon had proposed in back in October.

He noted it’s difficult to estimate projections and therefore suggested they dedicate the first $2.5 million to the schools before figuring out other allocations.

He noted Ward F Councilman Jermaine Robinson, who along with Ward D Councilman Yousef Saleh was absent, submitted comments saying he wanted taxes to fund social equity, recreation, and trade schools.

Rivera said that if $2.5 million goes to schools, there’s likely going to be little money for other programs, while Ridley liked the idea of percentages assigned to the funds.

Furthermore, Watterman said the majority of the money should go to social justice.

“If it hadn’t been for the cannabis or marijuana law, a lot of people’s lives would not have been destroyed. You can’t ignore that to me,” Watterman said.

She noted people with criminal records have difficulty finding employment.

Prinz-Arey noted they don’t know how many of the businesses will succeed or fail, making estimations difficult.

“We also want to make sure whatever the percentages are there ultimately going to be effective in the goal,” she said.

Business Administrator John Metro said the funds could be collected as a tax and be distributed, like the Open Space Fund.

Assistant Corporation Counsel Amy Forman indicated the council could accept the ordinance as currently written, where the funds are unallocated as long as the tax itself is imposed so that the manner in which the money is spent could be decided later.

Solomon suggested they should move forward with the tax that will go to a fund overseen by a committee like the Open Space or Arts Trust Funds.

“I’ll just throw out a potential proposal which would be for us to move forward with the tax, say in the tax that our initial allocation would be 50 percent towards education, 50 percent towards social equity, rawly defined, we don’t have to go into specifics, and then to get that on the books before the August 21st deadline and then for us as a council to work on the creation of committees that will kind of determine the distribution of funds,” he said.

His colleagues all responded that they thought the changes were a good idea.

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