Cities have the power to do justice to cannabis legalization – they must use it
New Jersey made history on November 3, 2020, when over 67% of voters approved the legalization of cannabis for adult use via a ballot initiative.
With that vote, residents passed the baton to lawmakers to work out the details, then to regulators to establish statewide implementation rules, and finally to New Jersey’s 565 municipalities to establish their own. rules, starting with registering or not. licensing cannabis establishments.
Municipalities are the driving force in determining whether legalization will live up to its potential for equity and racial justice, or if it becomes a missed opportunity that favors the rich and powerful. It is imperative that municipalities adopt policies to reinvest in communities and create meaningful and inclusive opportunities for New Jerseyans.
New Jersey’s legislative and regulatory framework has opened up new avenues for justice, with a deliberately non-competitive licensing system; no caps imposed on the number of micro-cultivation, manufacturing and retail licenses; relatively low application fees, starting at $100; and priority application status for communities most affected by the ban. Importantly, the law states that 100% of discretionary cultural excise duty and 70% of retail sales tax revenue must be directed to community reinvestment in municipalities defined as impact areas, a monumental step towards addressing the harms of the War on Drugs, which disproportionately targeted communities. of color, especially black communities.
Municipalities have authority in their cities over the number and types of licenses granted, business locations, application fees, and criteria for meeting the legal requirement for “proof of local support.” All opting municipalities have the power to implement a maximum 2% cannabis sales tax to support local initiatives. Some municipalities, such as Jersey City, directed these revenues to public schools and social programs. Elsewhere, communities highlighted housing assistance, child care, tuition and harm reduction programs, among other initiatives.
Unfortunately, the patchwork of municipal policies adopted so far has created a limited and restrictive licensing system at the local level that does not exist at the state level.
Most of the approximately 100 municipalities that have chosen to participate have erected excessive barriers to entry. Many have imposed caps on licenses, with some issuing only two per city. Prohibitive local application fees can range from $2,500 to $10,000 for initial approval and up to $30,000 for renewal. Some cities require municipal license applications that differ significantly from state ones, doubling the cost of professional preparation among other expenses. Many cities heavily restrict zoning, which can stifle commercial businesses and lead to landlord exploitation and corruption. Many municipalities do not have a priority review or approval system for communities harmed by the cannabis ban, and a lack of transparency masks the fairness of the processes. And, while many municipalities have implemented the 2% local tax, few have determined which initiatives it will support.
There is a better way. We need municipalities to adopt inclusive ordinances and replace those that take the wrong approach. Municipalities and their residents benefit from mimicking low state license fees or using a sliding scale, avoiding arbitrarily low caps on the number of businesses, allowing businesses to operate in a range of areas and offering support to businesses to create a more inclusive industry.
In many ways, municipalities hold the fate of statewide social equity efforts in their own hands.
Our cities can cement the fundamental principles of fairness, opportunity, and racial justice by working together with the New Jersey Cannabis Regulatory Commission to reduce, not increase, barriers to entry. We can seize the potential of this emerging industry, but only if we honor promises of fairness and access at all levels of government.
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