EDITOR’S NOTE: NJ Cannabis Insider is hosting an in-person day-long conference and networking event Sept. 23 at the Carteret Performing Arts Center, featuring many of the state’s leading power players. Tickets are limited.
Newark City Council on Thursday gave the green light to recreational cannabis within the state’s largest city — and the focus is on making sure local residents reap the rewards of the new industry.
The pair of ordinances regulate where each business can set up within the city’s borders and create rules for operating. Dozens of licenses can be given for businesses like manufacturing and delivery, but only two retailers will be allowed to have consumption areas indoors.
Consuming weed in public places like parks in Newark is still not allowed and could result in a civil fine up to $200, the ordinance said. Those under 21 and caught with cannabis could face a civil fine of anywhere from $100 to $350.
“Our biggest nightmare — our biggest fear — is walking down the street and you see somebody walking in and out of a spot with a big ol’ blunt in their hand,” said Newark Corporation Counsel Kenyatta Stewart on Monday in a virtual information session. “…We’re not going to let it happen.”
The final reading of the ordinances passed with six votes on Thursday. Central Ward Councilwoman LaMonica McIver said there could be amendments introduced in the future, based on the state’s new rules that were announced on Thursday.
New Jersey voters in November approved a ballot question legalizing recreational cannabis for adults and Gov. Phil Murphy signed legislation launching the industry and decriminalizing the drug. Municipal leaders across the state have until Saturday to ban or limit cannabis businesses within their jurisdictions.
Newark’s ordinance imposed a 2% local sales tax on each individual transaction, except for cannabis wholesalers (there will be a 1% local sales tax for them).
How it will work
City officials made it clear though: People who live in Newark, a majority Black city, must benefit from cannabis businesses. After all, previous marijuana laws disproportionately affected people who were Black.
A cannabis business will only be considered for an endorsement from the city if it meets certain criteria. For example, the business must hire Newarkers — and those workers must be unionized.
“You must hire 50% employees in the City of Newark and they must be unionized,” said Chantal Borroum, a city attorney who spoke during the information session. “We want these businesses to help us. We want these businesses to help Newarkers. If you’re going to come in and benefit from us, you must also help us and the administration is big on that.”
The state requires that a business applying for a recreational business license must secure community support or a recommendation from the municipality where it will be located.
City officials will only consider giving an endorsement if the business is at least 51% minority or woman-owned. Larger cannabis businesses must also contribute to a business development fund that will help a smaller cannabis business.
Up to five licenses are allowed in Newark for each cannabis cultivator, manufacturer and delivery service. No more than three licenses are being given for each wholesaler, distributor and safety compliance establishment.
Only five retailers will be allowed, and only two of them will be permitted to have indoor consumption areas.
Two micro-business licenses will be allowed for cultivators, manufacturers, wholesalers, distributors, retailers or a delivery service. Those are mini versions of the aforementioned businesses and they’re allowed to have up to 10 employees. It was unclear if micro-businesses would be included in the total number of licenses or if they would be considered for additional ones.
There are still dozens of licenses up for grabs for potential applicants who meet the stringent state and local regulations. Applicants must not only get approval from the state, but also the city’s planning board and then a selection committee for a local license.
The planning board process alone could take two months, city officials said.
Locations
City officials will allow retail businesses in each of the five wards, but they must have a 500-foot buffer from a K-12 school, playground, park or daycare facility. Retailers must also have a 200-foot buffer from places like a jail, college, group home for children, or licensed drug treatment facility.
The number of parks and schools in Newark will significantly limit where a cannabis business can open. No variances will be given for a cannabis business either, said Pallavi Shinde, a supervising planner for the city.
All cannabis establishments in the city must have armed security guards or off-duty police officers at every entrance and exit point of the facility, except for locked emergency doors. There must be at least one armed security officer to patrol the business when it is closed as well, the ordinance said. Surveillance cameras and alarms must also be installed.
A retailer may be open Monday through Friday from 9 a.m. to 9 p.m. On Saturdays, they may be open from 9 a.m. to 10 p.m., while they must close by 6 p.m. on Sundays. Delivery services to consumers have similar hours, but may operate 30 minutes later.
Any cannabis business owners who are not in compliance with the ordinances could be stripped of their licenses.
City officials devised a point system and a selection committee that will choose applicants for a cannabis business license. The selection committee will consist of seven city employees from various departments, including public safety, law, engineering, and finance.
Applicants must first apply for a license from the state, Newark officials said. Applications for a local license will be open Dec. 1 and will close at Dec. 31 at noon.
There are license fees of up to $5,000 and they must be renewed annually. Application fees run from $500 to $2,500.
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Rebecca Panico may be reached at rpanico@njadvancemedia.com.
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