BOONTON TOWNSHIP — The Mayor and Township Committee have introduced several ordinances as to the licensing and regulations pertaining to local cannabis operations in response to recently adopted State legislation.

Why is the Township taking this action at this time?

Under the Law, the State requires municipalities to take official action to adopt ordinances related to certain cannabis business activities by August 21, 2021, or otherwise forfeit the right to zone for and restrict these types of business activities at the local level for five years.

What happens if the Township does not take any action and adopt this ordinance?

While the voters of the State of New Jersey legalized the recreational use of marijuana, the Law requires local governments to act with respect to the various licensing of business, such as cannabis cultivation, manufacturing, wholesale, retail, and distribution. If a municipality fails to do so, the retail sale of cannabis would be automatically allowed as a permitted conditional use in all commercial/retail zones; and the business operations of all cultivation, manufacturing, wholesale, distribution of cannabis will be deemed permitted in all industrial zones within the Township.

Summary of the proposed Township Ordinances

In response to the Law, on June 7, 2021, the Mayor and Township Committee introduced three ordinances which in coordination, prohibit the licensing/operation of cannabis retailers and the licensing and business locations of delivery services throughout the Township. In addition, the Township Committee introduced an ordinance banning licenses and business operations for cannabis cultivation, manufacturing, wholesale, and distribution in all locations throughout the Township, except for one concurrent license of each class-type that the State Law has carved out solely for pre-existing licensed medical alternative treatment centers. If applied for and approved, operations related to the concurrent licensees will only be permitted at the one pre-existing medical cannabis licensed location in operation at 130 Old Denville Road.

Finally, the Township Committee introduced an ordinance that precludes the public delivery and consumption of cannabis at any indoor or outdoor public place or establishment throughout the Township. This includes in any public park, public building, and on any public roadways and businesses open to the public throughout the Township. While recreational consumption is permitted by law, these local ordinances maintain that the delivery, sale, and consumption of cannabis is only allowed at private residences.

Complete copies of the ordinances are available by clicking here (Legislation – (Uncategorized) – 2021 – Ordinance 899 – Ordinance to Amend Chapter 56 Cannabis Activity) and by clicking here (Legislation – (Uncategorized) – 2021 – Ordinance 898 – Cannabis Regulation & Prohibition)

The following are some frequently asked questions and responses regarding the Township’s proposed ordinances:

QUESTION: Do these ordinances mean that no business can sell cannabis throughout the Township to consumers?

ANSWER: Yes. Businesses are prohibited from selling cannabis items to consumers from storefronts or other business locations in the Township. However, the State Law does not allow municipalities to restrict or prohibit online/telephone sales and delivery services to private residences. Retail sale to consumers is also precluded at the pre-existing licensed medical alternative treatment center site.

QUESTION: Can a business make a land-use application for the development of a retail or wholesale business to sell cannabis within the Township?

ANSWER: Such applications cannot legally be approved since this ordinance specifically bans such activity and licensing within the Township.

QUESTION: What is the reasoning in support of permitting a cannabis operation license at the Old Denville Road site?

ANSWER: The site is already legally permitted to conduct a medical cannabis operation in accordance with State licensing laws and is already authorized under the State Law to hold a concurrent cannabis license for cultivation, manufacturing, wholesale and distribution. The operation, as it presently exists, includes medical cannabis cultivation and processing (i.e. manufacturing) for medical use. Permitting the ability of the licensed medical cannabis growing and processing facility to cultivate and process recreational cannabis does not change the existing operations at the facility or the extent of such operations. It does, however, provide for the legal right of the Township to collect user and transfer taxes on the sale of such cannabis of up to 2% at each class type (ie. 2% on gross sales for cultivation, 2% on gross sales for manufacturing, 1% on gross sales for wholesale).

QUESTION: How much revenue would this change in cultivating for recreational use provide to the Township?

ANSWER: Current law does not provide that medical cannabis can be taxed by the Township locally. However, recreational cannabis may be taxed up to 2% of the gross revenues at each class type. Based on some of the preliminary calculations applied to the existing operation at 130 Old Denville Road, it is anticipated that it would result in over $1 million/year to the Township, which would equate to approximately 15% of the Township’s existing budget.

QUESTION: What happens if the Township prohibits recreational licenses to the 130 Old Denville Road site?

ANSWER: The existing operation can continue, and the property owner is not obligated to remit to the Township a use/transfer tax on the gross sales from the operation.

QUESTION: Will the existing cannabis site at 130 Old Denville Road sells the product to businesses or consumers within the Township?

ANSWER: No. The decisions of the Township Committee preclude the cannabis site from distributing cannabis to consumers or businesses in Boonton Township. The taxes that will be assessed are on sales to businesses outside of Boonton Township.

QUESTION: As a result of the proposed ordinances, will I be able to utilize cannabis in a public park?

ANSWER: No. The use of cannabis in a public park or at any other facility, including the facility at 130 Old Denville Road, is prohibited. This ordinance bans public consumption of cannabis throughout the Township, it also bans “cannabis consumption areas,” which would otherwise allow for consumption of cannabis items in certain semi-public locations. It is only legal in your own private residence or within the confines of private lodging locations when permitted by the landlord or private property owner.

QUESTION: There have been concerns regarding the odor emanating from the 130 Old Denville Road location. What impact will this ordinance have on such concerns?

ANSWER: The operations will not change as a result of this ordinance. However, the ordinances increase the restrictions on odor and volatile organic compounds (“VOCs”) based on generally accepted legal and industry standards, including utilizing current emission technology. The Township has been in constant communication with the State of New Jersey Department of Health, the NJDEP, and the Township’s Health Officer and has hired a scientist to evaluate and monitor emissions at the existing site. In addition, the Township has engaged an independent air quality study to ensure the overall safety of Township residents. Whether the site is producing cannabis for recreation or medical, the same health standards and enforcement will apply. As part of the proposed ordinance, the Township has an opportunity to enhance the air quality standards with respect to the operation in the event of noncompliance.

QUESTION: Will the cultivation of recreational cannabis change the existing operation at the site?

ANSWER: No. The existing canopy and structures cannot be enlarged on the property unless the property owner seeks approval from the Planning Board. That is the status of the property today and that is the status of the property whether the site is utilized for recreational or medical use.

QUESTION: What are the tax and financial implications of this ordinance?

ANSWER: Although the permitted operation will not change, the financial aspects for the Township will change. It is estimated that the site will generate the Township of Boonton, revenue in the amount of $1.2 million per year. That represents nearly 15% of the Township’s budget. This financial infusion to the Township, without expansion of an existing site, will provide for tax relief and a potential reduction in the future tax rate of the Township. In order for the Township to generate the type of revenue that this site will be required to pay from their gross sales, it would otherwise require a corporate or industrial ratable in the amount of $51 million. This additional tax revenue will come without any additional infrastructure changes to the site.

Note: Information for this article was obtained from Boonton Township.