Real Estate Journal — Southern New Jersey — April 13 - 26, 2018 — 13B
www.marejournal.com
M id A tlantic
S outhern N ew J ersey By Bob Baranowski, Hyland Levin LLP Real estate and zoning hurdles facing legalized recreational marijuana retailers
T
he potential for legal- ized marijuana in New Jersey is an exciting
rado’s Amendment 64, and be- cause Colorado is a developed market, it’s useful to review how Colorado municipalities have handled these issues. In Denver, dispensaries cannot be located within 1,000 ft. of schools, childcare, drug rehab facilities and city-owned rec- reational facilities. The City of Thornton added “marijuana store” as a new land use, and established quadrants in the city, with one marijuana store allowed in each quadrant, to be 1,000 ft. from schools, 500 ft. from childcare, drug rehab facilities and 1,500 ft. from each other. Aurora
limited the number of stores to 24, required them to be located within commercial or industrial districts and also required them to be located 1,000 ft. from schools and 500 ft. from hospitals/drug treat- ment centers. Assuming future New Jersey marijuana retailers find suit- able locations that meet zon- ing requirements, considering New Jersey’s dense population and prevalence of schools and other sensitive populations, prospective operators may find themselves limited to commer- cial or industrial zones due to logistics or zoning. Marijuana
retailers and municipal plan- ners will both need to consider master plans and municipal ordinances, as well as whether a retail location in an area popu- lated by warehouses, industrial facilities and tractor trailers makes sense. There may also be challenges finding a leasable location, as landlord mortgage loan agreements typically pro- hibit activities on leased prem- ises that violate federal law. An additional and perhaps most critical challenge will be to fi- nance the purchase of a location based on the federal illegality of marijuana, as banks are reluc- tant to take deposits generated
from marijuana sales, let alone finance a location in the mari- juana business. In what should be a highly competitive market, intrepid potential marijuana retailers should consider investigat- ing their chosen municipality and potential locations well in advance, so they are prepared to secure a site, if and when legislation is enacted. Bob Baranowski practic- es land use, environmental, eminent domain and real estate law with Hyland Levin LLP, a multidisci- plinary law firm located in Marlton, NJ. n
prospect for many would- be marijua- na entrepre- neurs eager t o b e c ome i n v o l v e d . However, a legalized and r e g u l a t e d
Bob Baranowski
marijuana industry presents significant real estate and land use challenges creating barri- ers to entry into this new field. As of March 2, 2018, pro- posed legislation would legal- ize and regulate the purchase, sale, transportation, posses- sion and use of recreational marijuana and create the Division of Marijuana En- forcement (“DME”) to oversee these activities. DME would be responsible for promulgating regulations to establish the maximum number of licensed marijuana retailers. The legis- lation would delegate author- ity to municipalities to enact ordinances governing the time, place, manner and number of marijuana establishments, or prohibit them altogether. Mu- nicipalities would have input on selection if the number of license applications to DME exceed its limit. If municipalities do not pro- hibit marijuana establish- ments altogether, they will exercise their zoning and police power to regulate the location of these businesses. Some municipalities already have medical marijuana facili- ties within their borders due to the Compassionate Use Medi- cal Marijuana Act, and some municipalities have already barred them. For example, Upper Freehold Township and Howell passed ordinances forbidding zoning approval for any use that violates federal law. These ordinances effec- tively prevent any marijuana use (even medical), since mari- juana is still illegal federally. Other municipalities have utilized their zoning power to expressly prohibit medical dispensaries, or alternatively to permit them in industrial or commercial locations. Municipalities may also use their zoning and police power to regulate the “time, place, manner and number of marijuana establishment operations.” Because New Jersey’s proposed legislation tracks language from Colo-
In 2017, Hyland Levin LLP real estate lawyers closed transactions for our clients with a collective value in excess of $ 1.3 billion dollars Our real estate investor clients had a busy year , buying, financing and selling properties in New Jersey, Pennsylvania, Maryland, Virginia, New York, South Carolina and Florida. Our real estate transactional team led by Mark Shapiro, includes Lauren Beetle, Stacy Asbell, Julie Murphy and Will Hanna. Together, we assisted our clients in over 40 transactions involving multi-family, retail, office, warehouse and commercial properties.
Acquisitions .....................$119,948,400 of purchase price Financings .............................. $908,288,900 of loan value Sales ...................................... $344,259,500 of sales price
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Lauren A. Beetle 856.355.2913 beetle@hylandlevin.com William F. Hanna 856.355.2937 hanna@hylandlevin.com
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