New Jersey Cities Must Explain Marijuana Business Denials, Court Says

“While the City Council was permitted to consider all relevant evidence and has wide discretion…we hold that the City Council has to provide a discernible reason for its determination.”

By Sophie Nieto-Muñoz, New Jersey Monitor

New Jersey’s cannabis industry scored a victory Tuesday when a state appellate panel ruled that municipalities must explain why they deny requests for local support to open dispensaries, a decision that could have implications for legal weed retailers statewide.

The 23-page decision rejects an argument by the Burlington City Council that it is allowed to reject those requests without explaining why. The council was sued by the owners of a planned cannabis dispensary after council members denied the owners’ request for a resolution of local support, a document required to open recreational cannabis dispensaries in New Jersey.

“While the City Council was permitted to consider all relevant evidence and has wide discretion under its general police powers to deny the issuance of an ROS, we hold that the City Council has to provide a discernible reason for its determination,” reads the ruling by Judge Lisa Perez Friscia.

Tuesday’s decision rejects a lower court judge’s ruling that required Burlington to issue the resolution of support to the owners of the planned dispensary, called Higher Breed. The newer ruling requires the Burlington council to reconsider Higher Breed’s request for support and then issue a resolution that provides a basis for the council’s decision.

A request for comment from Higher Breed’s attorneys was not returned.

New Jersey voters opted in 2020 to legalize cannabis, but the state’s legalization law allowed towns to opt out of cannabis sales, and about 70 percent of towns did so. The Cannabis Regulatory Commission, which is tasked with approving cannabis retail licenses, requires prospective license holders to obtain a resolution of local support from the town where they plan to operate.

In December 2023, Higher Breed, owned by Jim and Karen Waltz, applied to the Burlington City Council for a resolution of local support for a store on East Route 130. After hearing from a real estate broker who does not live in Burlington and claimed the property’s owner was “dishonest” and owed him a real estate commission, the council ultimately rejected Higher Breed’s request for a resolution of local support. Higher Breed then sued.

Tuesday’s decision agrees that Burlington’s council has the authority to reject a request for a resolution of local support for a cannabis retailer, but the judges said the council cannot do so without providing a reason.

State law “offers no exemption for municipalities from providing in an adopted resolution the basis for denying local support,” the decision reads.

This story was first published by New Jersey Monitor.

Photo elements courtesy of rawpixel and Philip Steffan.