Home » No winners or losers yet in cannabis case against Hopewell Borough

No winners or losers yet in cannabis case against Hopewell Borough

by Amie Rukenstein

Under State law, prospective retail cannabis businesses in New Jersey must first obtain a Resolution of Public Support from the municipality in which it hopes to do business. So, over the past year, Hopewell Borough has set up parameters for approval of retail cannabis sales. During a public meeting last year, Borough Council and staff described the procedure they developed as quite stringent. Since that time, approval of the Resolution of Public Support has been fraught, resulting in legal confrontation

The due date for applications to receive municipal support for a retail cannabis store was set for December 15, 2022 at 11am and published on the Borough’s website, pursuant to Ordinance 859. Two companies, Evolve Sky and New Jersey Pure, submitted their applications before the appointed time, according to Council discussion in January 2023. A third company, Sourland Provisions, purportedly failed to meet the application submission deadline by a matter of minutes and also is alleged to have missed the deadline for paying the necessary fee by one day. 

The Borough then chose from the two timely applicants and Evolve Sky was judged to be the top applicant. This gives Evolve Sky the opportunity to continue the licensing process with the State. Meanwhile, Sourland Provisions’ application was not considered at all.  At the January meeting, Mayor Paul Anzano and Council member Ryan Kennedy, who are both attorneys and have represented or have personal connections with cannabis retail establishments, recused themselves and did not attend the meeting.

In February 2023, Sourland Provisions sued the Borough alleging that it had failed to adhere to Local Public Contracts Law (LPCL) and asked that the Court require the Borough to set its previous approvals aside and re-administer the cannabis application process. The Borough, in response, filed a Motion to Dismiss.

Later in the spring 2023, Sourland Provisions, which had initially been represented by the law firm of its principal, Heather Kumer, hired a new attorney and submitted an amended complaint. The initial complaint filed by Kumer was short and merely stated that the Borough had failed to follow LPCL. The amended motion alleged numerous allegations of impropriety by various members of the Borough Staff and Council. It also explained that Kumer’s husband, Joshua Rosenstock, was hindered in his delivery of the application to Borough Hall on the day of the application due to weather conditions and the illnesses of Borough staff.

Finally, in July, oral arguments were heard before Judge Robert Lougy. The Borough’s legal counsel, Paul Bishop, argued that LPCL was not the correct law and that the Cannabis Regulatory, Enforcement Assistance, and Marketplace Modernization (CREAMM) Act prevails in this instance, under which deadlines are paramount. He said that Sourland Provision’s failure to plan ahead is what caused their application to be thrown out adding that there were no “backdoor actions,” as had been alleged in Sourland Provisions’ complaint, but that governing board members with conflicts had recused themselves from the process, which was done entirely in public.

Mollie Lustig, attorney for Sourland Provisions, argued that the LCPL must prevail and was not followed and she asked for a judicial interpretation of “fair and open process” in the new arena of cannabis regulation. She furthermore argued that the real world exigencies of COVID and the weather dictate fairness in granting an application extension of a few minutes or hours.

On July 28, the Judge’s decision was released.  It ordered:

1. The Borough’s motion to dismiss was partially granted – it had argued that Sourland Provisions failed to state a claim upon which relief could be granted because LCPL does not apply. The Court agreed that LCPL does not apply but granted the motion without prejudice, meaning that Sourland Provisions is free to amend its complaint and sue again;

2. Sourland Provision’s request to amend its complaint was granted;

3. That complaint had to be filed within 20 days

4. Sourland Provision’s request that Evolve Sky and New Jersey Pure be stopped from relying on any Borough approvals in the process of applying to the State for a retail cannabis license was denied because the Court said it would not enjoin entities who were not a party to the suit.

5. Sourland Provisions request that the Borough be restrained from proceeding with the permitting process for cannabis retailer licenses also was denied.

The amended complaint was filed last week with many of the original points realleged and this time incorporating Evolve Sky and New Jersey Pure as parties to the suit in order that injunctive relief may be granted against them. It also more forcefully argues that Mayor Anzano’s role in the process prejudiced the Borough Council in favor of Evolve Sky.

MercerMe will continue to follow this case and report substantial developments.

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