Obtaining a conditional, or temporary, cannabis license is a feat, but the applicant should know that converting the conditional license to an annual license is another hurdle the applicant must clear, provided they understand the MLUL.
Sixteen months have passed since the New Jersey Cannabis Regulatory Commission (the CRC) released its initial set of rules to govern the state's recreational cannabis industry. Meanwhile, New Jersey cannabis attorneys have been keeping up to date on the legalization legislation, better known as the Cannabis Regulatory Enforcement Assistance and Marketplace Modernization Act (the CREAMM Act), as well as the licensing process. But what about the impact of the Municipal Land Use Law (MLUL), which governs how an applicant obtains the necessary permits and approvals for land development prior to the construction and operation of the cannabis facility? Obtaining a conditional, or temporary, cannabis license is a feat, but the applicant should know that converting the conditional license to an annual license is another hurdle the applicant must clear, provided they understand the MLUL.
Applicants and their attorneys need to be keenly aware of two deadlines imposed by the CRC: first, under N.J.A.C. 17:30-7.6(d), during the conditional cannabis license phase and once the conditional license is issued, the applicant has 120 days to gain control of the proposed site to operate through lease, purchase or other means; obtain approval from the municipality; and prepare and submit the application to convert the conditional license to an annual license. This conditional license may be extended an additional 45 days at the discretion of the CRC. Second, pursuant to N.J.A.C. 17:30-7.8(a)(4), zoning approval is required in order to convert a conditional license to an annual license, which consists of a letter or affidavit from appropriate municipal officials that the location (and its operations as a proposed cannabis business premises) will conform to municipal zoning requirements. This leaves, at most, 165 days from the issuance of the conditional license to comply with these deadlines.
Most land use attorneys will caution that these stringent timeframes imposed by the CRC make compliance nearly impossible when compared to the timeframes set forth under MLUL to actually apply for and receive the necessary municipal board permits and approvals to operate in the facility. Further, you should note that many municipalities require formal site plan approval even for interior fit-outs, or "change of use" applications where the subject building already exists.
If formal site plan approval is required, an applicant must prepare and submit a site plan application to the planning or zoning board (depending on the relief required), which should include all necessary documents, including but not limited to the requisite site plans, architectural plans, forms, and fees. Then, under the MLUL, a planning or zoning board has 45 days from the date of submission to review the application for completeness. Generally, the 45-day review period actually lasts longer than 45 days, since an applicant might make common mistakes such as miscalculating the fees owed, omitting a document, or submitting an incorrect number of copies to the board for review, which could extend the 45-day period. Once that 45-day (or longer) review period expires, the applicable board then has another 95 days from the date the application is deemed complete to grant or deny a variance-free application, or, alternatively, 120 days to approve or deny an application with variances. During this time, the applicant, the attorney and related professionals must appear before the planning or zoning board for one or more public hearings. Then, assuming the application is approved, the planning or zoning board has another 45 days to adopt the resolution of approval—which must then be published in the local newspaper. Keep in mind that the last 45-day appeal period begins to run only upon this publication, and if the applicant starts any construction before the appeal period expires, the applicant runs the risk that the approval would be overturned and any construction ordered razed. Also critical is that the local board approval is typically subject to obtaining any other permits and approvals from outside agencies with jurisdiction over the site, including but not limited to the New Jersey Department of Environmental Protection and the relevant county planning board. Of course, these agencies have their own timeframes, many of which are longer than those proposed under the MLUL.
The above-referenced timeframes are by no means exhaustive of the timeframes imposed on an applicant under the MLUL. Plus, there are many other issues, such as scheduling conflicts or public opposition to the application, which might cause additional delays and hurdles during the application process.
Clearly, there is a potential disconnect between the deadlines imposed by the CRC and the MLUL. As such, it is important that cannabis attorneys be aware of these deadlines so they can properly advise and prepare their client of what to anticipate after issuance of the conditional license.
There are several ways to mitigate these timing issues and to avoid the time-crunch:
- Be prepared and conduct due diligence. Clients should be
encouraged to find a site, confirm the use is permitted in the
zone, be aware of any potential operational restrictions on the
property, and retain the necessary professionals so that any plans
are ready-to-go when the time comes to apply for zoning
approval.
- Apply for a zoning permit. A zoning permit is a cost effective
and timely way to find out if the proposed cannabis use is
permitted on the property. A zoning permit typically costs around
$50, depending on the municipality, which is a fraction of the
costs that might be incurred when compared to the hefty site plan
application and escrow fees owed for a more formal site plan
application and the professional fees to prepare the necessary
plans. It should be noted that the municipal zoning officer must
approve or deny the zoning permit within ten (10) business days;
otherwise, the permit is deemed approved as a matter of law.
- Consider a request for a technical review committee meeting
(TRC) with the planning board professionals. This will afford the
applicant an opportunity to "meet the players" and gauge
the board's amenability to the proposed cannabis use. At the
TRC meeting, the applicant has the opportunity to show the proposed
plan and to potentially resolve any design or safety concerns that
may be raised by the board professionals. This provides the
applicant and their professionals an opportunity to resolve some of
the concerns prior to the public hearing.
- Hire an experienced land use attorney. Many cannabis attorneys may be familiar with the licensing aspect, but not the specific potential land use hurdles to follow.
This article is reprinted here with permission from the January 3 issue of the New Jersey Law Journal. © 2023 ALM Media Properties, LLC. Further duplication without permission is prohibited. All rights reserved.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
