What’s is going on with cannabis? Why hasn't the chairman had a meeting for over a year?
Having led the initial AH cannabis committee, I think it's important to ask why there have been no committee meetings at all this year. Last year there were large numbers of residents who came to council meetings opposed to having cannabis in Atlantic Highlands. There was also a smaller number of residents who came that were in support of cannabis. Council democrats made their intentions known at the time, but since Lori Hohenleitner took over as chairperson, she has made no mention of cannabis this year. It is an election year, and it’s possible she doesn't want to deal with the issue – the question is why?
We had agreed on a cap to limit the number of businesses in town should the ordinance be approved. Many people feel that Atlantic Highlands is just too small for multiple cannabis businesses. If there were multiple retail businesses, the potential tax revenue would also be diluted but the municipal oversight would likely increase.
Soon after the merits and detriments were discussed, Hohenleitner started to advocate for eliminating the cap on the number of licensees, possibly resulting in several cannabis businesses in our small town. She needs to make this clear now as it would significantly change the small-town charm we have come to love about Atlantic Highlands.
Jim Murphy, also a mayoral candidate, was against having a cannabis business in town. It seems that a majority were with him based on the volume of people who came to council meetings. He seems to have maintained his position on the issue so there is a clear difference between the two. Families and children were the focus.
Important considerations:
Based on my own experience running an Oakland, California cannabis company with over 100 employees, I would recommend careful study before a final decision. We aren’t a high population town, which I found to be the most profitable location with higher tax revenue. We would be limited by population in how much revenue we could make, especially with Highlands and Red Bank having approved several licenses already.
What about the benefits and risks for Atlantic Highlands? From the beginning of the process, I have felt that we need to balance the revenue against the impact to our town. The following is what I see in that regard:
Benefits
Money. We can make 2% on all sales. As former finance chair for the town, I must be objective and analytical about this opportunity. We have to consider that while revenue potential is still unknown, we are also a town that is cash strapped; the $500,000 windfall in paid off bonding this year was completely spent by the democrat controlled council this June. They also spent an additional $162,000, leaving nothing for emergencies. We are clearly heading for future tax increases as careful stewardship of our resident’s money is gone. We will have numerous ratables from the $2 million homes being built on the McConnell tract, more apartments on 158 1st Ave and additional development that will all contribute to revenue, but will that be enough?
Potential issues:
Local business interruptions. One thing we need to consider is the very small family-oriented town we live in. Without many ideal locations for a shop, we will very likely have a dispensary on First Ave. Thinking ahead, each of the people on-line at the dispensary would probably drive here and while they're waiting in line outside the store, their cars would be taking up space that other businesses need. I originally thought this would be temporary, but the small footprint of our stores doesn’t allow for a lot of people to gather inside. Security rules can slow how many people enter at one time in these shops. This will hurt existing businesses when parking is constrained even more than it is now.
Families. Because of the size of our town, it should not be a surprise when you walk with your children to the ice cream shop or movie theatre that you will have to cross through cannabis lines or smell the odor. First Ave and Rt 36 are the first choice for these types of businesses due to their high visibility, so it’s inevitable they will be there. The competition for higher-than-average cannabis rents will make First Ave great for landlords.
Harbor. The harbor is our town gem. It defrays a lot of real estate taxes for all of us. One thing I noticed quite a bit after legalization on the West Coast is you could walk pretty much anywhere and smell cannabis. One could say it grows on you, but in a small town like ours don't be surprised if you start to smell it in the harbor. What about kids playing basketball or biking in the harbor? I would be naive to think that it will be cannabis free. Have you been to NYC lately? I also saw this in every state I worked in, openly smoking in the street even when it wasn’t allowed. Surely most people are responsible but it’s the small number that aren’t who cause issues. We have a lot of kids who play in the harbor and need to be aware of the changing NJ DOT fatality statistics. “For the first time in a decade, distracted driving was not the leading cause of fatal crashes in the state” Drunk and high drivers now the top cause of fatal crashes in N.J., report shows - nj.com . Even Canada has seen a dramatic increase in traffic injuries: https://nypost.com/2023/09/07/canadas-traffic-injuries-up-nearly-500-after-pot-legalization/ . We need to be careful here.
Multi State Operators. The NJ statute has a 2-year ban on selling retail stores to manufacturing and grower companies. That was to allow residents a chance to participate in the industry. The two-year window is over, and the hometown shops will overwhelmingly sell out. This has already happened in NJ as several larger ATCs (medical) sold out to large out of state companies. Will the larger companies care about the effect they have on our small town?
Federal legalization. We are getting close to federal legalization. I’ve seen dramatic shifts in the industry because of economic and governmental changes. While federal legalization can be good, i believe it will dramatically hurt the growers in NJ. Once the inexpensive and prolific flower grown in California and Oregon is available across state lines, we will see many local growers either sell out or lose everything. They just won’t be able to compete. This can have a bad effect on the downstream businesses in the future, but I think we should wait to see how that shakes out.
Increased Crime. Some suggested that crime would not be a problem, but my experience is otherwise. My warehouse was robbed at gunpoint and ransacked. The security guard was tied up. It was very scary to be there after that. Granted, this was in Oakland, but it has happened here also. An increased police presence will be needed. Ayr Dispensary weed store in Eatontown NJ burglarized (app.com) . We just need to be realistic so we are prepared and not naive.
Who is hurt by a “no” decision? In short no one. If it is available in Highlands, Red Bank, Keansburg or delivered to our door, no one will be denied access and there will always be several choices on how to procure cannabis.
Who is hurt by a “yes” decision? Hard to say, but the businesses on First Ave are an easy one to see getting hurt due to lack of parking. Parking may be impacted badly. The municipal lot will fill up quickly. For the record, I fail to see how a parking garage will be paid for by the revenue obtained from cannabis, which some people believe. Five to seven million dollars for a garage will impact taxes significantly. I doubt the will to raise taxes on our residents for a garage will be there in future councils.
Kids and families will also have to deal with the lines, possibly in front of the theatre and ice cream shop as well as the harbor and the increase in deaths due to drunk and high driving in NJ are a real concern for families. If we had a sizeable light industrial zone, we wouldn’t have to think about this as much.
My Cannabis Background
In 2017 I joined a group of 5 individuals as part of a cannabis company start-up team with the goal of a obtaining a cannabis license in time for the 2018 legalization in California. I was to handle the legal and compliance issues we had to deal with once operating. I obtained a distribution license for my company (what New Jersey calls a wholesaler) by the first legal day to operate, Jan 1, 2018. Within 2 months, we had over a million dollars of cannabis flower ready to sell into the marketplace and another license for manufacturing. This was after all, the largest marketplace for cannabis in the United States. Later on, we purchased a company in Oregon and began to expand in that state. I later looked into expanding into Colorado, MA and NY.
There were a lot of very stressful times as we had to decide what to do with hundreds of thousands in cash, decide where our vehicles could travel to move product around to avoid federal inspection stations, and deal with an armed break-in at our facility where criminals ransacked the building. I worked with indoor grow facilities, manufacturers, retailers, labs, and farms other distribution companies all the while working on the cutting edge of this new industry and its challenges. When I left the company, we had over 100 employees and a 275-million-dollar market capitalization.
I then became active in the nascent New Jersey industry, speaking with other industry veterans, NJ legislators and writing pieces for New Jersey Cannabis Insider. The industry does create jobs for many people and avoids the life-long consequences of a cannabis conviction. It also ensures that the product is safe for those who buy from a licensee (there is thorough safety testing). I made many good friends that I would have never met had I not become involved with the business. People from very different lifestyles who are hard-working entrepreneurs who I am glad to call friends.