Opt-In vs. Opt-Out: New Jersey Local Cannabis Laws

Opt-In vs. Opt-Out: New Jersey Local Cannabis Laws 

In February, New Jersey legalized recreational marijuana, but now many local municipalities are choosing to opt-out of the cannabis program.

Under the N.J. Cannabis Regulatory, Enforcement Assistance, and Marketplace Modernization Act, towns have until Aug. 21, 180 days from the adoption of the state law to create any local enforcement structure. While cities can ban dispensaries, manufacturers and cultivation centers in their borders, they can’t ban consumer consumption of marijuana or licensed cannabis delivery companies from operating in their jurisdiction.

If a municipality doesn’t opt in or out, it will be governed by the state law and would not be allowed to ban any type of cannabis establishments for five years. One reason local governments are opting out is because they can opt-in at any time, giving politicians the opportunity to tread into the cannabis waters slowly by seeing how it works in other cities and towns first.

Legalization won the approval of voters in 562 of 565 municipalities in New Jersey during the November 2020 election. Despite this overwhelming evidence of recreational marijuana support, many local governments are still choosing to opt out. Research in two counties in central New Jersey found only three out of 39 municipalities have opted in so far.

Prominent towns like Ashbury Park, Paterson and Jersey City have all opted out, including many tourist towns on the Jersey Shore, such as Ocean City.

Types of Municipality Cannabis Ordinances

Municipalities can take several approaches to adult-use marijuana through the type of ordinance they issue.

• An ordinance that bans all marijuana businesses
• An ordinance that would allow for all types of marijuana businesses providing they meet zoning regulations, building codes and other relevant regulations
• An ordinance that limits the number and/or type of marijuana businesses

With the third type of ordinance, municipalities can be very selective in the type of marijuana businesses that might be allowed in their community. New Jersey has six classes of cannabis licenses, including:

• Class 1 License: Cannabis Cultivator
• Class 2 License: Cannabis Manufacturer
• Class 3 License: Cannabis Wholesaler
• Class 4 License: Cannabis Distributor
• Class 5 License: Cannabis Retailer
• Class 6 License: Cannabis Delivery

In Parsippany Township, the largest in Morris County, officials decided to allow wholesalers (Class 3) and distributors (Class 4), but no other types of cannabis businesses. Hamilton Township in Mercer County chose to allow only two cultivation centers and nothing else.

How Stakeholders Can Prepare for Local Rules in New Jersey

With each town and city able to choose if they want to allow cannabis at all, or only certain types of businesses, entrepreneurs or companies eyeing the New Jersey cannabis market can save time and money by working with a cannabis consultant to find the best licensing option and location for their cannabis business. If you’re interested in entering the New Jersey recreational marijuana market, contact the CB Advisors team today to ensure you have the right strategy and approach to succeed in the Garden State.

We have successfully secured licenses for clients in over 20 markets across the United States. If you are interested in applying for a cannabis business license in New Jersey, contact us by phone at (602)-290-9424‬ or email (info@thecannabisbusinessadvisors.com) for more information.