Hoboken council introduces new cannabis regulations

Ordinances could establish taxes, licensing fees, and zoning laws

The Hoboken City Council will consider several ordinances about cannabis zoning and taxation now that the council unanimously voted to introduce the measures on July 7. 

The regulations come after New Jerseyans voted last November to legalize recreational cannabis, authorizing the growth, cultivation, processing, manufacturing, preparing, packaging, transferring, and retail purchasing and consumption of it for those over 21. 

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Through the New Jersey Cannabis Regulatory, Enforcement Assistance, and Marketplace Modernization Act, municipalities may adopt legislation prohibiting or limiting cannabis retail, enacting a local municipal cannabis tax, or prohibiting cannabis consumption in public spaces, but they must enact the legislation before August 21.

If they don’t, the state default regulations will apply.

Taxing cannabis 

According to the introduced ordinance amending the city’s chapter on taxation, Hoboken may impose a transfer tax of two percent on medical cannabis dispensed by a medical cannabis dispensary, a transfer tax of one percent of the receipts from each sale by a cannabis wholesaler, and a two percent tax of the receipts from each sale by a cannabis retailer, including sales transacted by a cannabis delivery service, among other amendments. 

Should a cannabis establishment fail to pay the tax when due, the city will impose a lien on the property for the unpaid balance and accrued interest. 

This revenue will be set aside in a separate account established for collection and disbursement of said funds by the Municipal Cannabis Review Board with the consent and approval, by resolution, of the city council. 

Of these funds, a minimum of 75 percent of the annual cannabis tax revenue will be used to support social justice initiatives, cannabis education programs, the special improvement district, community policing, and similar social programs.

A maximum of 25 percent of the annual cannabis tax revenue may be used in the city budget. 

Cannabis zoning 

According to the introduced ordinance updating the city’s zoning regulations, the city will allow, by conditional use approval, cannabis wholesalers, cannabis retailers, medical cannabis dispensaries, and cannabis delivery services in designated commercial and industrial zones. 

It will not allow cannabis cultivators, cannabis manufacturers, and cannabis distributors. 

Cannabis wholesalers, retailers, medical cannabis dispensaries, and cannabis delivery operations will be conditionally allowed in the city’s I-2 industrial district, primarily in southwest Hoboken. 

Cannabis retailers and delivery services will be conditionally permitted in the city’s various commercial districts, but cannabis retailers, dispensaries, and other cannabis-related businesses will not be permitted in residential zones except by use variance and endorsement by the Cannabis Review Board.

They are also not permitted in the I-1W sub-district, which is primarily in the northern waterfront surrounding Maxwell Place, the Shipyard, and the Tea Building. 

The ordinance further states that medical cannabis dispensaries already approved must apply to additionally sell personal use cannabis and are not automatically grandfathered in. 

Within the zones where cannabis establishments are permitted, a minimum of 500 feet must be between the cannabis retail and/or medical cannabis dispensary locations, and no cannabis retailer or dispensary can be on the same block frontage as a primary or secondary school. 

If permitted by the state and the city, cannabis consumption areas operated by a cannabis retailer or medical cannabis dispensary must be limited to an indoor, structurally enclosed area of the cannabis retailer or dispensary that is separate from the retail sale or medical dispensing area, and they must be ventilated as required for cigar lounges by the state. 

A cannabis wholesaler, cannabis retailer, or medical cannabis dispensary must have equipment to mitigate cannabis-related odor, including a ventilation system with carbon filters. 

Among these and other regulations, cannabis wholesalers, retailers, delivery services, and medical cannabis dispensaries must obtain state licenses, obtain Land Use Board conditional approvals, and an endorsement and community host agreement from the Hoboken Cannabis Review Board. 

These host agreements, according to Councilman Michael Russo, would be similar to redevelopment agreements that often stipulate community givebacks in exchange for conditional approvals and variances. 

Licensing fees 

According to an ordinance amending the city’s cannabis review board, this agreement establishes the cannabis applicant’s commitment to the community and its support for “local cannabis education programs, local employment and jobs training, public safety programs, the special improvement district (SID) or other mutually beneficial community investments.” 

This proposed amended ordinance includes annual license fees cannabis establishments will have to pay the city once they are approved. 

Cannabis wholesalers will pay $5,000 annually. Retailers will pay $15,000 annually. Medical cannabis dispensaries will pay $10,000 annually. Cannabis delivery businesses will pay $2,500 annually. Cannabis Consumption license holders will pay $25,000 annually. 

These fees will be used for public education and/or increased public safety in the area surrounding the establishments. 

The zoning ordinance amendment will now go before the city’s planning board to see if it is consistent with the city’s master plan. 

Once reviewed, it will go before the council for second and final reading. 

Go to https://tinyurl.com/d2tfpatb to read the proposed zoning amendments. 

Go to https://tinyurl.com/yvj49fjf to read the proposed amendments to the cannabis review board.

Go to https://tinyurl.com/xayjpm4f to read the proposed amendments to the city’s chapter on taxation. 

For updates on this and other stories check www.hudsonreporter.com and follow us on Twitter @hudson_reporter. Marilyn Baer can be reached at Marilynb@hudsonreporter.com.

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