Town Council President Cindy Matute-Brown held a cannabis workshop featuring a panel of experts in the industry to educate West Orange residents, the town council and the administration about the township’s options.
The experts included West Orange Chief of Police James Abbott, attorney Mark Moon, Managing Director/Founder of Cannabis Advisory Group Jackie Ferraro, Associate at Cannabis Advisory Group and attorney Alana Hans-Cohen, Director of Cannabis Advisory Group Charlana Mckeithen, Director of Cannabis Advisory Group and Urban Planner Chuck Lantini, Chief Economist at Whitney Economics Beau Whitney and Outreach Specialist at TerrAscend Diana McElroy.
Matute-Brown shared that she toured the Maplewood TerrAscend retail location with McElroy and described the atmosphere as a “Tiffany-like store.”
Hans-Cohen explained that West Orange will begin with 37 licenses to grow cannabis, and there are 12 growers in town already. The quantity will be assessed and changed if necessary.
The cannabis industry includes six stages/professions:
Cultivators/producers grow it
Extract technicians extract the compounds from the plant
Producers make concentrates, topicals, butters, oils, edibles, etc.
Compliance officers ensure the many industry laws are followed
Dispensaries/retailers sell the product
Deliverers transport to retail establishments and customers
Hans-Cohen explained that micro cannabis operations are comprised of 10 employees or fewer and grow 1,000 plants per month. The state does not limit the number of micros. A micro business’ size is normally around 2,500 square feet. Micros can grow larger and obtain a vertical license in order to distribute and/or become involved with other processes as well as grow the product.
Smaller companies often need subsidies due to the expenses of security, rent and other needs. The industry offers grants to help smaller businesses because cannabis is illegal on a national level which presents many challenges.
It can take a year to gather permits, financial qualifications and everything needed to apply for a permit. The state has to approve permits within 14 days of receiving them.
Mckeithen mentioned that laws are designed to ensure that 15% of micro-companies are owned by women, minorities and veterans.
She also shared that New Jersey has 100,000 medical marijuana patients served by only 16 dispensaries. The demand for cannabis far outweighs the supply, making it expensive.
Whitney spoke of the Safe Banking Act which reduces the cost of capital loans, decreases risk and lowers interest. He noted that cannabis operations are normally cash-based, making security measures necessary.
He also talked about 280E, an IRS tax code section that “disincentives illicit activities” by ensuring that legal fees, marketing and labor are not allowed to be written off on federal taxes. Paying an additional 60-80% in federal taxes strips companies of the ability to afford employees and to pay health benefits.
The tax code needs to be reduced to help smaller cannabis operations. There’s also no bankruptcy protection because the industry is illegal federally. Therefore, dispensaries often use credit unions in lieu of banks. However, deductions can be taken from state taxes.
McElroy illustrated how TerrAscend is regulated by the Department of Health and the Cannabis Regulatory Commission. Live feed cameras need to be throughout the dispensary, security guards are always present, a nondescript car transports the money and security buttons are installed for emergencies.
The company has long towers in their farm field to emit the scent high in the sky and uses charcoal filters.
She also mentioned, “New Jersey tracks each cannabis from seed to sale.” Employees undergo background checks are fingerprinted.
TerrAscend is not interested in opening a store in West Orange, but McElroy was invited to provide an example of the type of dispensary that would fit well in town.
Lantini suggested that the township approve dispensaries that make presentations demonstrating how they would be a good addition to West Orange. For example, TerrAscend grows produce at their farm and donates it to food pantries. They also help animal shelters.
Like any local business, a cannabis shop or manufacturer can be vested in the township and interested in giving back to the community.
Zoning requirements keep dispensaries away from schools, daycare and places of workshop.
Lantini said dispensary locations need to be walkable for medicinal clients who don’t drive, and retail shops should be out of the way of traffic if possible. Some dispensaries are like wellness spas, and others might be similar to a bar-type setup.
Moon stated that dispensaries are taxed at two percent, while wholesale operations are only taxed at one percent.
During a discussion about social justice aspects of legalized cannabis, Hans-Cohen reported that there are some prior convictions that don’t exclude people from working in the industry.
Ferraro estimated that retailer operations can gross 10-15 million dollars per year. Mayor Parisi explained, “West Orange will proceed with caution.” He estimated that legal cannabis might raise approximately $200,000 or $300,000 annually for the township. He pointed out that 75% of West Orange residents voted in favor of cannabis legalization, and the administration is responding to public demand.
Chief Abbott reported that the police will provide cannabis education and may collaborate with Uber and/or Lyft in a program to discourage people from driving after using cannabis.
Click HERE to view the workshop.