Lit & Legit Business Briefs – Week 1
In New Jersey, cannabis real estate requires more than just finding the right property. Operators must navigate both private property constraints and municipal approval. Landlords are not required to lease to cannabis businesses, and even willing property owners may be limited by zoning restrictions, lender requirements, or insurance policies. In particular, some properties are subject to mortgages with restrictive covenants that prohibit leasing to businesses engaged in activities that remain illegal under federal law, which can include cannabis. Applicants must also secure site control, typically in the form of a lease or deed, as part of the licensing process. At the same time, under the framework overseen by the New Jersey Cannabis Regulatory Commission, applicants must secure both a Resolution of Municipal Support and a zoning determination letter for annual licensure. The Resolution confirms that the municipality has formally approved the application through a vote, while the zoning determination letter confirms that the proposed property is properly zoned for the intended use. Without these approvals, even well-funded projects cannot move forward.
Recent changes to New Jersey law now require municipalities to provide a reason when denying a Resolution of Support, giving applicants greater transparency into whether issues relate to zoning, local caps, or community concerns. This added clarity can help businesses determine whether adjustments to the project are feasible or whether other legal or administrative paths should be explored.
Tip
The key takeaway is to scout and vet your property first to ensure it checks all the boxes. Before signing a lease or making any significant investment, confirm that the municipality allows the specific cannabis use, whether any caps apply, and that the site meets all proximity requirements and land use qualifications. Just as importantly, confirm the landlord is aligned and that no mortgage or financing restrictions would prohibit the intended use, as early, thorough diligence can prevent costly setbacks and position your project for success.
Whether you’re launching, growing, or navigating new challenges, Joshua S. Bauchner and Natalie C. Diaz are here to support your cannabis business.