With Jersey City’s Cannabis Control Board having already endorsed 41 applicants looking to set up shop as retailers, city lawmakers are now considering revising the procedures it set two years ago and then modified last year.
That prospect emerged as the City Council voted Wednesday to support two applications for the operation of cannabis businesses following a lengthy discussion at Monday’s caucus about the complexities of reviewing such applications.
Strictly CBD LLC, headed by Jeffrey Devine and Venus Smith, propose to dispense the product out of 394 Communipaw Ave. (formerly Rainbow Kids) in the Morris Canal redevelopment zone and JC Element LLC, whose partners are Rafael Corona and Kushan Patel, plan to run a similar enterprise from 365 Central Ave.—within the Heights central business district.
Strictly CBD has pledged to donate $10,000 of its annual profits to the nonprofit Community Treasures and an additional $10,000 to Kismet of Kings. JC Element has agreed to provide $2,500 of its first-year proceeds to the nonprofit Anti-Violence Coalition of Hudson County and an equal amount to Hogar Crea, an anti-drug nonprofit.
Both applications were approved Wednesday.
For now, the council will hold off consideration of any further applications until it has completed, with other review agencies (the city Planning Board and Cannabis Control Board) and the city law department, further review of the city standards that cannabis business applicants must meet.
Among those issues are: a 600-foot separation required of cannabis businesses, to what extent minority residents are being squeezed out of ownership opportunities by out-of-towners with deep pockets and whether the city should “cap” the number of licenses.
Ward C Councilmember Richard Boggiano said many applicants are upset because the rules “are not being clearly presented” and Maynard Woodson, the city’s director of licenses, said the situation is complicated because “there are so many different levels of approval.”
Applicants have the option of applying directly to the state for an operating license, Woodson said, but the state only provides “conditional approval (which is) not tied to a specific location,” not even “which city it’s going to be in.” To actually operate, an applicant must get a letter of support from a municipal governing body.
Ward B Councilmember Mira Prinz-Arey said the council should “consider pumping the brakes a little” before issuing any more letters of support to applicants, particularly, she added, when it appears that “different (city) entities are not communicating with each other.”
In the case of JC Element, for example, the city Planning Board voted to approve the applicant’s plans to convert a former clothing store to accommodate a cannabis dispensary in March 2022 despite the fact that, as of now, according to Woodson, there are two approved cannabis shops designated for 391 Central Ave. and 404 Central Ave., each of which is “less than 600 feet” from JC Element’s proposed shop.
No matter the apparent distance discrepancy, Councilmember-at-large Daniel Rivera and Ward D Councilmember Yousef Saleh said that when the Legislature legalized such ventures around the state, it intended them as business opportunities, in particular, for local Black and Brown entrepreneurs, as is the case, they reasoned, for the “home-grown” partners of JC Element.
Before the council voted on their application, Corona and Patel—who’ve known each other since high school—appealed to the lawmakers for their support. Corona said they’ve spent $15,000 for city-required fees related to the approval process and Patel added, “We’re stuck in a 10-year lease—if you say ‘no,’ we lose everything.”
“We’re (examples of) social equity, minority,” Patel said. “Just give us this opportunity. You’ll see, we’ll make you proud.”
“Give a minority guy a chance to run a business,” Corona added.
Saleh agreed, saying, “You check all the boxes this law was made for.”
Typically, Prinz-Arey said, a minority entrepreneur will need more time “to build up the capital” needed for an investment to support a business like this and will likely be under the gun, during a lengthy license review process, to pay back the investors.
Saleh agreed that as time passes, “the hardest thing for an applicant (with limited resources) is site control” because of the tendency of a building owner to drive up rents and “rake (the tenant) over the coals.”
Council President Joyce Watterman worried about the prospect of minority owners getting bought out by operators with deep pockets, leaving “the little guy” at “the short end of the stick.”
“You’re going to see more and more multi-state (cannabis) operators coming to Jersey City,” Prinz-Arey warned, “and give a 5% minority (owner/partnership) face.” Actual minority applicants “are ending up last in line,” she said. Priority for Jersey City residents “should’ve been in the vetting process.”
“My concern is (the pace of applicant submissions) is starting to move faster and now there’s clustering of (approved cannabis businesses),” Prinz-Arey said. “First it was in Downtown, then West Side, then the Heights and Communipaw down to the Junction and we need to be fair to all people participating.”
Currently, Woodson said, the city CCB has approved 41 applications. To date, the city has imposed no limit on how many cannabis businesses can operate.
The city empathizes with the plight of the local minority businessperson, said Watterman, particularly since “a minority partner can be bought out” by out-of-town investors and/or competitors. “We need to figure out how to help the little guy.”
Ward E Councilmember James Solomon said: “Clearly, there are questions still to be worked through.” He recommended setting a short review period to come up with “a fair, neutrally applied set of rules.”
That recommendation is already being taken up by the city administration, according to Peter Baker, city corporation counsel, who said, “We are working on amendments (to the city cannabis rules). There are some inconsistencies and we need time to make some repairs…. We’re building the plane as we’re flying it. It’s definitely time to make repairs to the plane we’re flying.”
In other business, the council approved an application to the state Urban Enterprise Zone Authority for funding for the coming fiscal year, as follows: $1.96 million for off-duty police patrols, $1.65 million for UEZ marketing, $850,000 for façade improvement, $800,000 for a micro-business real estate commercial lease subsidy grant, $784,000 for UEZ administrative budget and $751,116 for small business incubator and development services.
The council also authorized a payment of $650,000 through the city’s Insurance Fund Commission to settle a lawsuit brought by Ross Charlot who sued after he was struck by a municipal vehicle operated by city employee Michael Razzoli in 2019.
Tenants of the Portside Towers complex appeared again to protest what they described as Mayor Steve Fulop’s unwillingness to get involved in their dispute with the landlord, Equity Apartments, over what they characterize as illegal rent increases and persistent health and safety code violations. They asked the council to meet with them about their concerns.
Despite opposition, the council introduced an ordinance that would abolish the city’s Municipal Construction Board of Appeals in favor of referring contested cases involving city property owners and the city building department to the county for deliberation. Both current board chairman William Santomauro and Anthony Catanio, former chairman, call the move wrong-headed.
Santomauro said the board “plays a crucial role in maintaining safety of residents” and cited a case where the board got PSE&G to restore power within 24 hours to an emergency shelter. The board hears an average of “12 to 15” cases per month, he said. In a letter to the council, Catanio wrote: “During the 18 years of my tenure as chairman … our decisions were fair, professional and well-documented.”
The council will hold a public hearing on the ordinance later this month.