NJ Senators Consider “Impact Zones” in New Cannabis Legalization Bill

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On June 7, 2018, Sen. Scutari and Sen. Sweeney jointly introduced a new cannabis legalization bill (“the Bill”).  Unlike its predecessors, this bill is empowered by the sponsorship of Sen. Sweeney, the New Jersey Senate President, who has been advocating for cannabis legalization for over a year but previously did not take a step this significant toward making cannabis legalization a reality.

 

This blog will analyze various aspects of this new bill in a multi-part series that will begin with a completely new concept proposed in the Bill: Impact Zones.

§ 45 of the Bill, titled “Impact Zones”, is the strongest action to date by legislators to push the much talked about agenda of social justice.  “Impact zone” is a defined term in the Bill and “means any census tract that ranks in the top 33 percent of census tracts in the State for marijuana-related arrests and that ranks in the bottom 33 percent of census tracts in the State for median household income.”  The Bill recognizes that impact zones tend to identify geographical areas where, without support, cannabis businesses may not succeed or otherwise benefit the community.  To that end, the Bill requires that, to the extent possible, “at least 25% of the total licenses awarded for Class 4 Marijuana Retailer license” are to be awarded to applicants who qualify under one of the following three criteria, with preference given to those in the higher tiers:

Tier 1: the ownership of the dispensary has to involve at least 51% of individuals who live in an impact zone;

Tier 2: the ownership of the dispensary has to involve at least 20% of individuals who live in an impact zone; and

Tier 3: businesses which “incubate a Tier 1 or Tier 2 business by providing free lease space[,] financial support or other support identified by the division.”

Essentially, what § 45 does is provide incentive and assistance to entrepreneurs who wish to open a dispensary in an area of New Jersey that has historically had high volumes of cannabis arrests and low levels of household income.  Potential dispensary owners who want to avail themselves of this benefit must be able to demonstrate residency in an impact zone for five of the last ten years.  The Bill does not specifically identify where impact zones are in New Jersey.

Potential cannabis entrepreneurs should evaluate whether they may live in an impact zone, as this could be a powerful tool for those seeking a dispensary license.  This blog will continue to evaluate and analyze the Bill in this multi-part series over the coming weeks.

Credits: Image courtesy of Digital-Topo-Maps.com.

Alex concentrates his practice on business litigation and counseling. Alex is the author of the New Jersey Cannabis Counsel blog where he tracks and analyzes developments in New Jersey’s efforts to legalize recreational cannabis and the potential impact on cannabis businesses in New Jersey. Alex is also a member of the New Jersey Cannabusiness Association.