Key Takeaways
- New Jersey Appellate Division Clarifies Municipal Obligations: In Higher Breed NJ LLC v. City of Burlington Common Council (March 3, 2026), the court ruled that municipalities must provide a discernible reason when denying a cannabis applicant’s request for a municipal Resolution of Support.
- Unexplained Denials May Be Challenged: If a municipality denies a Resolution of Support without stating a reason in the record, the decision may be considered arbitrary, capricious, or unreasonable and subject to judicial review.
- Municipalities Still Retain Broad Discretion: The decision does not require municipalities to approve cannabis businesses, but it does require that a clear rationale for denial be reflected in the record.
- Municipal Support Is Critical for Licensing: Cannabis applicants seeking annual licenses from the New Jersey Cannabis Regulatory Commission must obtain a municipal Resolution of Support before applying for an annual license.
- Applicants Have a Limited Window to Challenge a Denial: Legal challenges are typically brought as actions in lieu of prerogative writs and must generally be filed within forty-five days under New Jersey Court Rule 4:69-6.
What Did the New Jersey Appellate Division Decide?
A recent decision from the New Jersey Superior Court Appellate Division may have significant implications for cannabis license applicants across the state who were denied a municipal Resolution of Support without explanation. The ruling clarifies that while municipalities retain discretion when deciding whether to support cannabis businesses, they must provide a discernible reason when denying a request for a Resolution of Support.
On March 3, 2026, the Appellate Division issued a published opinion in Higher Breed NJ LLC v. City of Burlington Common Council addressing whether a municipality can simply vote to deny an applicant’s request for a Resolution of Support without providing any explanation for the decision. The Court concluded that a municipality may deny a Resolution of Support, but it must articulate a reason for doing so. Without a discernible rationale in the record, the denial may be considered arbitrary, capricious, or unreasonable and therefore subject to judicial review.
Why Are Municipal Resolutions of Support Important for Cannabis Businesses?
Resolutions of Support are a crucial component of the New Jersey cannabis licensing process. Applicants seeking licenses from the New Jersey Cannabis Regulatory Commission are required to demonstrate and submit a municipal Resolution of Support in order to apply for an annual license. This requirement is satisfied by obtaining a Resolution of Support from the governing body of the municipality where the proposed cannabis business will operate. As a result, municipal governing bodies play a significant gatekeeping role in determining whether cannabis entrepreneurs can proceed with an annual license application.
What Happened in the Higher Breed Case?
The dispute in Higher Breed arose after the applicant sought a Resolution of Support from the City of Burlington Common Council for a proposed cannabis retail establishment. The applicant appeared before the governing body and presented information about the proposed business, including the location, operations, and compliance with municipal cannabis ordinances. Initially, the council voted to move the matter forward for additional discussion and public comment.
At later meetings, however, comments were raised regarding a dispute involving a real estate broker and an alleged brokerage commission connected to the property lease. After hearing those comments and limited, additional discussion, the governing body ultimately voted to deny the Resolution of Support. The resolution denying the application did not include any explanation of the council’s reasoning, and the meeting record did not identify any specific basis for the denial related to zoning, public safety, local cannabis regulations, or the suitability of the proposed cannabis business.
When Can a Municipal Decision Be Considered Arbitrary?
The applicant challenged the denial by filing an action in lieu of prerogative writs, arguing that the municipality’s decision was arbitrary because it failed to provide any explanation for rejecting the application. The Appellate Division agreed that municipal decisions must contain enough explanation to allow an applicant, the public, and a reviewing court to understand the basis for the governing body’s action. Without a discernible rationale in the record, a court cannot determine whether the municipality exercised its discretion appropriately or acted in an arbitrary or unreasonable manner. In so holding, the Court cited its seminal decision in In re Application for Med. Marijuana Alt. Treatment Ctr. for Pangea Health and Wellness, LLC, 465 N.J. Super. 343, 375 (App. Div. 2020), in which it held that a governing body has the responsibility to set forth findings of facts in its decision to facilitate meaningful review.
At the same time, the Court recognized that municipal governing bodies retain broad discretion when deciding whether to support cannabis businesses within their communities. The decision does not require municipalities to approve cannabis applications or to provide detailed findings similar to those issued by land use boards. Instead, the Appellate Division made clear that a municipality must simply articulate a reason that can be understood from the record so that the decision is transparent and capable of review.
What This Decision Means for Cannabis Applicants and Municipalities
This ruling is critically important for applicants across New Jersey seeking municipal support but receiving a simple denial with no explanation. It also is critically important to municipalities considering requests for Resolutions as they must ensure a deliberate and transparent process rather than simply summarily denying a request without stated basis.
What Is the Deadline to Challenge a Municipal Denial?
Timing is an important consideration for applicants who believe their Resolution of Support was improperly denied. Challenges to municipal decisions of this type are typically brought as actions in lieu of prerogative writs under New Jersey Court Rule 4:69-6. Under that rule, a lawsuit challenging a municipal action generally must be filed within forty-five (45) days of the municipal decision. Once that deadline expires, the opportunity to challenge the denial may be lost.
Cannabis applicants who were denied a municipal Resolution of Support should review whether the municipality provided a clear explanation for the decision and confirm the date the governing body voted on the matter. If the municipality denied the Resolution of Support without articulating a reason, the Appellate Division’s decision in Higher Breed may provide grounds for legal review.
Mandelbaum Barrett PC’s Cannabis, Hemp & Psychedelics attorneys stand at the forefront of a dynamic and ever-evolving legal landscape. We possess a detailed understanding of laws associated with the production, sale, use, and regulation of a broad range of controlled substances — from cannabis and hemp to psychedelics. If you believe you may have been affected by a municipal denial of a Resolution of Support without a stated reason, or have questions about how recent legal developments may impact your cannabis license application, we encourage you to contact our attorneys to discuss your situation.
Disclaimer:
The information provided in this post is for general informational purposes only and does not constitute legal advice. While we strive to ensure the accuracy and timeliness of the content, laws and regulations frequently change, and the information may not reflect the most recent developments. If you require legal advice or assistance, please contact Joshua Bauchner or Natalie Diaz.