When Governor Murphy signed legislation legalizing cannabis use and possession for adults aged 21 and older, local municipalities were faced with a choice: opt-in or opt-out.
According to the NJ State League of Municipalities, each local municipality was given the option to “limit the number of cannabis establishments, distributors, or delivery services; the location, manner, and times of operation, and establishing civil penalties for violation of ordinances.” Existing municipal regulations were considered null and void requiring each municipality to either readopt existing ordinances or create new regulations.
Each municipality had to choose: either opt-out completely, create an ordinance restricting number and type of businesses allowed, or take no action. If municipalities were to take no action, then any kind of establishment or distributor would be allowed to operate within that municipality for the next five years, subject to business type and zoning rules.
By opting out, a municipality could stop cannabis businesses from opening in their town now, while reserving the right to opt back in at any time. By opting in and passing an ordinance now, municipalities have the right to set their own rules for both number and type of business allowed.
For a potential cannabis entrepreneur, finding a municipality that has opted in and allowed some kind of business in its jurisdiction is only the beginning. The business owner also must apply to the State for a license to operate.
The decision deadline set by the State for NJ municipalities was August 21, 2021. As the clock began to tick for the local municipalities to set their own rules, Hopewell Township and Hopewell Borough both pressed the pause button and chose to initially opt out of allowing any cannabis related business in those municipalities. (Hopewell Township has since signaled that it will allow cannabis cultivation in a limited area).
Pennington Borough Council chose to move forward, citing a mandate from the community in the last referendum. An ordinance “restricting the number, location and operation of cannabis retailers, medical cannabis dispensaries and cannabis delivery services and prohibiting all other cannabis businesses and operations in the Borough” was first introduced at the June 7 meeting of the Pennington Borough Council.
Subsequent meetings on August 2, August 9, and August 16 welcomed comments from the community both for and against adoption of the ordinance.
At the August 16 meeting, Pennington Borough Council member Kit Chandler commented: “The Borough Council has listened to everybody, which is why over the last three or four months this ordinance has contracted to where location is, number of retailers, the hours and the size. We have really pared this down.”
Chandler continued, “I don’t honestly think that an opt-out is appropriate because of the way the town voted….we had a referendum. The town overwhelmingly supported…retail cannabis. Nobody under the age of 21 is even allowed in the retailer. These are not protections we have with regards to liquor.”
The Pennington Borough Council allowed only three types of cannabis operations as per the ordinance: retail, medical, and delivery services. By state law, delivery services must be allowed. The Council explicitly prohibited cannabis cultivators, manufacturers, wholesalers, and distributors.
The ordinance went through several changes over the course of the summer. Those changes most notably included a reduction in the number of facilities allowed. Originally, the ordinance allowed one medical and two retail businesses. The Borough Council ultimately reduced that number to one medical and one retail business. Cannabis retail and medical businesses will be restricted to operating in only the Office Business (OB) and Business Highway (BH) zones in Pennington Borough.
The Borough Council also eliminated the possibility of consumption of cannabis products on the premises of a licensed facility. There will be no “consumption rooms” where customers can use cannabis products on site.
The ordinance passed the Pennington Borough Council August 16, 2021 with a vote of 5-0 and is available on the Borough website here.