Five of six types of cannabis licenses would be allowed in Rahway’s light industrial and heavy industrial zones under legislation to be voted on next week.
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City Council introduced the legislation (O-24-21) at its June 14 meeting. A public hearing and final adoption is set for its next meeting, scheduled for Monday at 7 p.m.
The ordinance would allow for two licenses of each class of business: cultivator, manufacturer, wholesaler, distributor, and delivery. Only retail businesses would be prohibited. A business engaging in medical and personal cannabis will count as one toward the maximum number of licenses.
On-site consumption of marijuana would be prohibited as would marijuana-derived products, including smoking, ingesting edibles, or applying topical applications.
Towns are allowed to levy an optional Cannabis “Transfer Tax and User Tax” that is capped at 1% of wholesale activities and 2% of cultivation, processing, and retail activities. The tax in Rahway would be fixed at a uniform rate of 2% on all sales or transfers of cannabis products from any of the cannabis establishments.
A 1% transfer tax will be collected from each sale by a cannabis wholesaler. A user tax is also established at the 2% rate and will be imposed on the value of each transfer or use of cannabis or cannabis items not otherwise subject to the transfer tax.
In 2018, City Council approved a resolution in support of locating a medical marijuana dispensary within the city’s light industrial or heavy industrial zones. Later that year, Wyckoff-based Verano NJ, LLC, was chosen to open a cultivation site in Rahway with a dispensary in Elizabeth. It was among six applicants chosen by the state Department of Health to advance in the process for obtaining permits for medical marijuana dispensaries.
The state has since approved a public question last year and the governor signed legislation in February to legalize marijuana.
Under state law, towns have until Aug. 21 – six months after Gov. Phil Murphy signed the legalization legislation – to adopt ordinances to allow or prohibit marijuana businesses. If an ordinance is not adopted, marijuana businesses will be allowed for five years. If an ordinance is approved not allowing marijuana businesses, towns can change the ordinance at any time to allow for sales.
More than 100 towns have passed ordinances to ban cannabis business or indicated they plan to, according to nj.com.
In Easthampton, Mass., local officials worried about increased crime, kids smoking weed and property values falling when legal weed dispensaries wanted to set up shop. “We have not seen one of those things,” Mayor Nicole LaChapelle told nj.com. “Our view of this was very much influenced by our fears and something so new. It certainly influenced the ordinance. It also reflected public opinion.” Four dispensaries have opened there so far and rents and revenues have risen, according to nj.com.
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What does the proposed ordinance introduced by City Council entail in terms of licenses for different classes of cannabis businesses?