[HISTORY: Adopted by the City Council of the City of Paterson 6-28-2022 by Ord. No. 22-047. Amendments noted where applicable.]
As used in this chapter, the following terms shall have the
meanings indicated:
Any licensed person or entity that grows, cultivates, or
produces cannabis in this state, and sells, and may transport, this
cannabis to other cannabis cultivators, or usable cannabis to cannabis
manufacturers, cannabis wholesalers, or cannabis retailers, but not
to consumers.
Any licensed person or entity that processes cannabis items
in this state by purchasing or otherwise obtaining usable cannabis,
manufacturing, preparing, and packaging cannabis items, and selling,
and optionally transporting, these items to other cannabis manufacturers,
cannabis wholesalers, or cannabis retailers, but not to consumers.
Any licensed person or entity that purchases or otherwise
obtains, stores, sells or otherwise transfers, and may transport,
cannabis items for the purpose of resale or other transfer to either
to another cannabis wholesaler or to a cannabis retailer, but not
to consumers.
Any licensed person or entity that transports cannabis in
bulk intrastate from one licensed cannabis cultivator to another licensed
cannabis cultivator, or transports cannabis items in bulk intrastate
from any one class of licensed cannabis establishment to another class
of licensed cannabis establishment, and may engage in the temporary
storage of cannabis or cannabis items as necessary to carry out transportation
activities.
Any licensed person or entity that purchases or otherwise
obtains usable cannabis from cannabis cultivators and cannabis items
from cannabis manufacturers or cannabis wholesalers, and sells these
to consumers from a retail store, and may use a cannabis delivery
service or a certified cannabis handler for the off-premises delivery
of cannabis items and related supplies to consumers. A cannabis retailer
shall also accept consumer purchases to be fulfilled from its retail
store that are presented by a cannabis delivery service which will
be delivered by the cannabis delivery service to that consumer.
Any licensed person or entity that provides courier services
for consumer purchases of cannabis items and related supplies fulfilled
by a cannabis retailer in order to make deliveries of the cannabis
items and related supplies to that consumer, and which services include
the ability of a consumer to purchase the cannabis items directly
through the cannabis delivery service, which after presenting the
purchase order to the cannabis retailer for fulfillment, is delivered
to that consumer.
A structure in which one or more persons actually reside
in conformance with state and local law, or which has a certificate
of occupancy permitting residency. The structure may be exclusively
or partially residential.
To be measured in the normal way that a pedestrian would
properly walk from the nearest entrance of the cannabis licensee to
the nearest entrance of the site whose proximity from the licensee
is being measured. The said method of measurement, which is also found
in N.J.S.A. 33:1-76, shall be interpreted consistent with administrative
and other case law addressing the issue of measurement under the said
statute.
A.
Generally. The City hereby establishes that the following cannabis
license classes, as defined above, are permissible in the City subject
to the licensing requirements, rules, and regulations established
herein and by state law:
B.
Certain class-related requirements.
(1)
The maximum number of licenses available for each Class is as follows:
(2)
Nothing herein obligates the local licensing authority to issue all
licenses available in any class.
(3)
The amount of licenses available may be subject to change.
(4)
Licensure in all classes may be, but are not required to be, held
by the same entity or individual, but an entity may not hold more
than one cannabis retailer license. Any license conditionally issued
by the City is contingent upon the locally licensed entity's
or individual's subsequent recipient of a state permit or license
of the same class or type of regulated cannabis activity.
A.
Transfer tax imposed.
(1)
There is hereby imposed a transfer tax of the maximum authorized
by N.J.S.A. 40:48I-1 and any successor statute, namely:
(2)
Such tax shall be collected or paid, and remitted to the municipality
by the cannabis establishment from the cannabis establishment purchasing
or receiving the cannabis or cannabis item, or from the consumer at
the point of sale, on behalf of the municipality by the cannabis retailer
selling the cannabis item to that consumer. The transfer tax shall
be stated, charged, and shown separately on any sales slip, invoice,
receipt, or other statement or memorandum of the price paid or payable,
or equivalent value of the transfer, for the cannabis or cannabis
item. No cannabis establishment required to collect a transfer tax
imposed hereunder shall advertise or hold out to any person or to
the public in general, in any manner, directly or indirectly, that
the transfer tax or user tax will not be separately charged and stated
to another cannabis establishment or the consumer, or that the transfer
tax will be refunded to the cannabis establishment or the consumer.
B.
Tax liability. Every cannabis establishment required to collect a
transfer tax imposed by ordinance pursuant to this section shall be
personally liable for the transfer tax or user tax imposed, collected,
or required to be collected under this section. Any cannabis establishment
shall have the same right with respect to collecting the transfer
tax from another cannabis establishment or the consumer as if the
transfer tax was a part of the sale and payable at the same time,
or with respect to nonpayment of the transfer tax or user tax by the
cannabis establishment or consumer, as if the transfer tax was a part
of the purchase price of the cannabis or cannabis item, or equivalent
value of the transfer of the cannabis or cannabis item, and payable
at the same time; provided, however, that the chief fiscal officer
of the municipality shall be joined as a party in any action or proceeding
brought to collect the transfer tax or user tax.
C.
Collection of taxes, and liens. All revenues collected from a transfer
tax imposed by ordinance pursuant to this section shall be remitted
to the chief financial officer in the manner prescribed herein. The
chief financial officer shall collect and administer any transfer
tax imposed by ordinance pursuant to this chapter. The municipality
may enforce the payment of delinquent taxes or transfer fees imposed
by ordinance pursuant to this section in the same manner as provided
for municipal real property taxes. In the event that the transfer
tax imposed by ordinance pursuant to this section is not paid as and
when due by a cannabis establishment, the unpaid balance, and any
interest accruing thereon, shall be a lien on the parcel of real property
comprising the cannabis establishment's premises in the same
manner as all other unpaid municipal taxes, fees, or other charges.
The lien shall be superior and paramount to the interest in the parcel
of any owner, lessee, tenant, mortgagee, or other person, except the
lien of municipal taxes, and shall be on a parity with and deemed
equal to the municipal lien on the parcel for unpaid property taxes
due and owing in the same year. The municipality shall file in the
office of its tax collector a statement showing the amount and due
date of the unpaid balance and identifying the lot and block number
of the parcel of real property that comprises the delinquent cannabis
establishment's premises. The lien shall be enforced as a municipal
lien in the same manner as all other municipal liens are enforced.
D.
Certain powers and duties of Chief Financial Officer.
(1)
General powers and duties. The chief financial officer is charged
with the administration and enforcement of the provisions of this
chapter, and is empowered to prescribe, adopt, promulgate and enforce
rules and regulations relating to any matter pertaining to the administration
and enforcement of this chapter, including provisions for the reexamination
and corrections of declarations and returns, and of payments alleged
or found to be incorrect, or as to which an overpayment is claimed
or found to have occurred, and to prescribe forms necessary for the
administration of this chapter. Should a cannabis establishment fail
or refuse to provide adequate information to the chief financial officer
to determine the amount of tax due, the chief financial officer may
use information provided to the chief financial officer from other
sources (i.e., the Commission or Department of Treasury) to determine
the amount of tax liability.
(2)
Other powers and duties. It shall be the duty of the chief financial
officer to collect and receive the taxes, fines, and penalties imposed
by this chapter. It shall also be the duty of the chief financial
officer to keep a record showing the date of such receipt. The chief
financial officer is authorized to enter into agreements with the
State of New Jersey to obtain information to facilitate administration
of the tax. The chief financial officer is authorized to issue a ruling
upon written request of a taxpayer or upon its own volition.
(3)
Examination of taxpayer records. The chief financial officer is hereby
authorized to examine the books, papers and records of any taxpayer
to verify the accuracy of any declaration or return, or if no declaration
or return was filed, to ascertain the tax due. Every taxpayer is hereby
directed and required to give to the chief financial officer, or to
any agent designated by him/her, the means, facilities and opportunity
for such examinations and investigations, as are hereby authorized.
E.
Taxpayer records, returns, and audits.
(1)
Taxpayer recordkeeping. Taxpayers liable for the transfer tax are
required to keep such records as will enable the filing of true and
accurate returns or the tax and such records shall be preserved for
a period of not less than three years from the filing date or due
date, whichever is later, in order to enable the chief financial officer
or any agent designated by him to verify the correctness of the declarations
or returns filed. If records are not available in the municipality
to support the returns which were filed or which should have been
filed, the taxpayer will be required to make them available to the
chief financial officer either by producing them at a location in
the municipality or by paying for the expenses incurred by the chief
financial officer or his agent in traveling to the place where the
records are regularly kept.
(2)
Returns. All cannabis establishments operating in the municipality
are required to file a transfer tax return with the chief financial
officer to report their sales during each calendar quarter and the
amount of tax in accordance with the provisions of this chapter. Returns
shall be filed and payments of tax imposed for the preceding calendar
quarter shall be made on or before the last day of April, July, October,
and January, respectively. A taxpayer who has overpaid the transfer
tax, or who believes it is not liable for the tax, may file a written
request on an amended tax return with the chief financial officer
for a refund or a credit of the tax. For amounts paid as a result
of a notice asserting or informing a taxpayer of an underpayment,
a written request for a refund shall be filed with the chief financial
officer within two years of the date of the payment.
(3)
Audit and assessment. The chief financial officer may initiate an
audit by means of an audit notice. If, as a result of an examination
conducted by the chief financial officer, a return has not been filed
by a taxpayer or a return is found to be incorrect and transfer taxes
are owed, the chief financial officer is authorized to assess and
collect any tax due. If no return has been filed and tax is found
to be due, the tax actually due may be assessed and collected with
or without the formality of obtaining a return from the taxpayer.
Deficiency assessments (i.e., where a taxpayer has filed a return
but is found to owe additional tax) shall include taxes for up to
three years to the date when the deficiency is assessed. Where no
return was filed, there shall be no limit to the period of assessment.
(4)
Notice; hearing. Upon proposing an assessment, the chief financial
officer shall send the taxpayer an interim notice which advises the
taxpayer of additional taxes that are due. Should the taxpayer wish
to dispute the assessment administratively by requesting a hearing
with the chief financial officer, it must do so within 30 days of
the date of such interim notice. If, after the chief financial officer
sends an interim notice, a taxpayer fails to timely request a hearing
with the chief financial officer or requests a hearing and after conducting
a hearing, the chief financial officer determines that the taxes are
due, the chief financial officer shall send the taxpayer a final notice.
A.
Distance from places of worship, schools, or legal residences. No
Class of License or cannabis business shall operate within 300 feet
legal walking distance as defined above from any place of worship
or a school providing education for grades kindergarten through 12,
or of any legal residence as defined above. However, if there were
no such places of worship, schools, or legal residences with the said
distance at the time of licensure, then subsequent construction or
conversion shall not affect the licensee's right to operate.
B.
Zoning. The default statutory standards for zoning of cannabis licensees
— which would ordinarily authorize nonretailers in industrial
zones, and retailers in commercial zones — shall under the authority
of N.J.S.A. 24:6I-45 be superseded by the following standard: cannabis
licensees of any kind shall be permitted uses only in I-1, I-2 and
M-U Zones.
A.
No mobile sites. No cannabis establishment shall be housed in a vehicle
or any movable or mobile structure.
B.
Odor. cannabis establishments shall have equipment to mitigate odor.
The building shall be equipped with a ventilation system with carbon
filters sufficient in type and capacity to mitigate cannabis odors
emanating from the interior of the premises.
C.
Noise. Outside generators and other mechanical equipment used for
any kind of power supply, cooling, or ventilation shall be enclosed
and have appropriate baffles, mufflers, and/or other noise reduction
systems to mitigate noise pollution.
D.
Security. All classes of cannabis licensees shall be secured in accordance
with State of New Jersey statutes and regulations; shall have an around-the-clock
video surveillance system, 365 days a year; and shall have trained
security personnel on site at all times during operating hours.
E.
Hours. No cannabis retailer may open to customers for business before
8:00 a.m. or remain open to customers for business after 10:00 p.m.
F.
No sale or use of alcohol or tobacco. There shall be no on-site sales
of alcohol or tobacco products, and no on-site consumption of alcohol
or tobacco.
G.
Cameras. All sites must be equipped with security cameras covering
all exterior parking and loading areas, points of entry, and interior
spaces which are either open to the public or used for the storage
or processing of cannabis products. Footage must be maintained for
the duration required under state law. All licensed facilities must
provide the City of Paterson Police with access to security footage
immediately upon request.
H.
Signage promoting excessive consumption. No cannabis business shall
display signage containing text and/or images intended to promote
excessive consumption of legal cannabis products.
A.
Local licensing authority. The Economic Development Director or his
designee (hereinafter referred to as "Director," also referencing
such designee in each instance) is hereby designated to act as the
local licensing authority for the City for all cannabis classes of
licenses. Under all circumstances in which state law requires communication
to the City by the cannabis Regulatory Commission or any other state
agency with regard to the licensing of cannabis establishments by
the state, or in which state law requires any review or approval by
the City of any action taken by the state licensing authority or for
the grant of any class of license by the City, the exclusive authority
for receiving such communications and granting such approvals for
any class of license shall be exercised by and through the Director.
Under no circumstances shall a local license for a cannabis establishment
issued by the City be effective until or unless the state has issued
the requisite permits or licenses to operate such a facility. It is
the intent of this chapter that no cannabis establishment may lawfully
operate in the City without the issuance of a state permit or license
and full regulatory oversight of the cannabis establishment by the
cannabis Regulatory Commission or other state licensing authority
as well as oversight and issuance of a license by the City.
B.
Application. Persons wishing to obtain any classification of cannabis
license shall first file a license application with the Director,
on a standardized form established by the Department of Economic Development
and available in the Economic Development office. Department of Economic
Development shall establish an application period and deadline for
all applications. An application shall be deemed incomplete, and shall
not be processed by Department of Economic Development, until all
documents are submitted and fees paid. The Department of Economic
Development may in it is discretion deny any application, or may approve
any application subject to final approval by the Council. To be deemed
complete, all applications shall be accompanied by the following:
(1)
Completion of form. The Applicant has submitted a completed application.
(2)
Proof of rights to location. The applicant shall submit proof that
the applicant has or will have lawful possession of the premises proposed
for the cannabis establishment with the permitted locations as established
herein, which proof may consist of: a deed, a lease, a real estate
contract contingent upon successful licensing, or a binding letter
of intent by the owner of the premises indicating an intent to lease
the premises to the entrant contingent upon successful licensing.
(3)
Affidavit of compliance with laws. The applicant shall submit an
affidavit and documentary proof of compliance with all state and local
laws regarding affirmative action, antidiscrimination and fair employment
practices. The applicant shall also certify under oath that they will
not and shall not discriminate based on race, color, religion (creed),
gender, gender expression, age, national origin (ancestry), disability,
marital status, sexual orientation, or military status, in any of
its activities or operations.
(4)
Location in compliance with zoning and location restrictions. The
location proposed for licensing by the applicant shall comply with
all applicable municipal zoning laws and the location restrictions
set forth in this chapter.
(5)
Proof of financial ability to operate. The applicant shall submit,
to the satisfaction of the Director, proof of financial capability
to open and operate the cannabis establishment for which the applicant
is seeking a license. Standards for proof of financial capability
shall be determined by the Department of Economic Development.
(6)
Application and license fees (nonrefundable). The applicant shall
submit all required fees, which are nonrefundable, for the application
and license, conditioned upon state issuance of license/authority
to operate in accordance with the following fee schedule: $30,000
for a Paterson resident, who resides in Paterson at least one year
prior, and $60,000 for a nonresident.
(7)
First year registration fee (subject to reduction). Within 30 days
of final approval by the City of Paterson, the applicant shall submit
all annual registration fees required, in accordance with the following
fee schedule:
(b)
Reduction of fees.
[1]
Minority businesses. Any business that can provide a Minority
Business Enterprise Certification from the State of New Jersey shall
be entitled to a 25% reduction of the licensure fee or annual registration
fee, or remaining fee if a reduction has already been applied under
this section.
[2]
Women's businesses. Any business that can provide a Women's
Business Enterprise Certification from the State of New Jersey shall
be entitled to a 25% reduction of the licensure fee or annual registration
fee, or remaining fee if a reduction has already been applied under
this section.
[3]
Businesses employing Paterson residents. Any business that can
provide proof that at least 75% of its employees are residents of
the City of Paterson shall be entitled to a 50% reduction of the licensure
fee and annual registration fee, or remaining fee if a reduction has
already been applied under this section. In order to receive a reduction
under this section, the business entity must provide adequate proof
of employment and residency, in the form of payroll history (amounts
redacted) and proof of residency demonstrating at least nine months
of both residency and active employment. The City reserves the right
and the applicant agrees to permit the City to contact any employees
referenced in order to verify employment and residency.
[4]
Businesses contracting with other Paterson businesses. Any business
that can provide proof that it relies on local goods and services,
in the form of at least two ancillary service contracts the business
has awarded to other businesses located within the City of Paterson,
shall be entitled to a 25% reduction of the licensure fee and annual
registration fee, or remaining fee if a reduction has already been
applied under this section. In order to receive a reduction under
this section, the licensed business entity must provide proof of an
ancillary service contract with other local businesses valued over
$5,000 for goods or services provided to the business the previous
year, and proof of payment. The City of Paterson shall confirm that
each ancillary service company is a business entity located within
the City of Paterson, and possesses a valid business license in good
standing. Ancillary services shall include, but shall not be limited
to, mechanical services, auto repair services, custodial services,
office furniture and/or supplies, labor, food, advertisement, IT services,
and construction and/or repair services.
[5]
Any business that utilizes a post-release re-entry employment
program (i.e., providing gainful employment opportunities for recently
released individuals on parole or probation) shall be entitled to
a 25% reduction of the licensure fee or annual registration fee, or
remaining fee if a reduction has already been applied under this section.
[6]
Businesses in multiple categories. If any state licensed cannabis
business is able to satisfy three of the above four categories (i.e.,
minority business, women's business, local business, and ancillary
service), their annual licensing fee shall be waived for that year.
(8)
Criminal background check; prior cannabis license suspensions. In
addition to complying with any state requirement related to good character
and criminal background, any person proposed to have an ownership
interest in the license shall not have had any cannabis license or
permit revoked for a violation affecting public safety in the State
of New Jersey or a subdivision thereof within the preceding five years.
The applicant and the application shall otherwise comply with any,
and all qualification standards set forth in the state and City laws
or regulations.
(9)
Preferences for award of licenses. The Director shall consider and
give preference to the following criteria in awarding any class of
license:
(a)
Hiring of minorities, women and/or veterans. The applicant's
demonstrated commitment to diversity in its ownership composition
and hiring practices, including a plan to hire residents of Paterson,
and whether the applicant entity or its parent company holds any certifications
as a NJ minority-owned, women-owned, or veteran-owned business.
(b)
Current or future Paterson business interests. The applicant's
ties to the City of Paterson, demonstrated by at least one individual
applicant or shareholder's proof of residency in Paterson or
at least one shareholder's or individual's continuous ownership
of a business based in Paterson, or the intent to relocate and reside
in Paterson, or an intent to relocate or establish a business in Paterson.
(10)
Coordination of state approval and local approval. Notwithstanding
the foregoing application process, a notification of award and conditional
municipal license shall entitle the recipient applicant to pursue
a state permit or license in the appropriate classification for up
to three months, which may be extended in the Director of Law's
discretion for an additional time period. No license to operate shall
issue until the applicant has received a state permit and satisfied
other prerequisites of municipal licensure. If the recipient of a
notice of award and conditional license has not received a state permit
or license within six months from issuance, unless extended, the preliminary
approval may be revoked.
(11)
Modification of requirements. The Director of Economic Development
may waive or amend any requirement or implement any requirement, extend
any time period, and otherwise modify the application process.
(12)
Council approval by resolution required for all new cannabis
licenses. Notwithstanding any other provision herein to the contrary,
no new cannabis license shall be issued unless and until the Director
of Economic Development in his or her discretion evaluates the application,
and thereafter submits his or her conditional approval, if any, for
confirmation by the Municipal Council, after which the Municipal Council
may in its discretion grant approval by resolution.
C.
Term of license, license renewals, transfer, and expansion.
(1)
Three-year term. Any local license issued pursuant to this chapter
shall be valid for a period of three years from the date of issuance
and shall be renewed in accordance with the provisions of this chapter.
(2)
Requirements and criteria for approval of renewal. The Director shall
establish criteria for evaluating renewal applications. Any renewal
application meeting those criteria shall be forwarded to the City
Council for a final decision as to whether to renew the license.
(3)
Coordination of state term and local term. The Director, may, at
his/her discretion, adjust the renewal date of the local license to
correlate with an applicant's state licensing and renewal schedule.
(4)
Subsequently enacted laws. Renewal of any license shall be governed
by any code amendments, additional restrictions or changes in regulations
adopted since the previous license was issued or renewed.
(5)
Person-to-person transfer, place-to-place transfer, and expansion.
Transfer of ownership of any local license or change of location of
any license or modification to expand a licensed premise shall be
submitted to the Department of Economic Development's review
and approval, which may be conditioned or denied.
(6)
No continued operation without renewal. Except where the Department
of Economic Development has received a complete renewal application
along with the paid nonrefundable requisite fees, and has issued a
license renewal, it shall be unlawful for any person to manufacture,
sell, distribute, transfer, transport, or otherwise remove cannabis
or cannabis products from the premises of any license after the expiration
date recorded on the face of the license.
A.
Nuisance. With respect to the operation any cannabis license, the
following is hereby declared to be an unlawful public nuisance:
(1)
Odors or noise which are disturbing to people of reasonable sensitivity
who may be residing near or present on nearby property, including
areas open to the public.
(2)
Repeated dispatches to the property by law enforcement.
(3)
Disruption to and/or obstruction of the free passage of persons and/or
vehicles in the immediate vicinity of the property.
(4)
Any other condition or act which may be deemed a violation of this
chapter.
B.
Disciplinary actions. Procedures for investigation of license violations
and for suspension, revocation, or other licensing sanctions as a
result of any such violation shall be as follows, subject to any applicable
limitations under state law:
C.
Summary suspension. Notwithstanding the foregoing section, when the
City Law Department has grounds to believe that a licensee has engaged
in a violation of any applicable law or regulation, created a nuisance,
dangerous, or unsanitary condition, or that the public health, safety,
and/or general welfare has been jeopardized, the Law Department may
enter a summary suspension order for the immediate suspension of such
license pending further investigation. License holder consents to
jurisdiction of the Law Department and to suspension of same as decided
by the Law Director.
(1)
Enforcement, review, and investigations related to any cannabis license
shall be within the jurisdiction and purview of the Police Department.
The Police Department shall cooperate and provide any materials, information
and investigations requested by the Law Director pertaining to any
cannabis licenses.
(2)
The summary suspension order shall be in writing and shall state
the reasons therefor. The licensee shall be afforded an opportunity
for a hearing as outlined herein.
(3)
The Director of Law shall convene a review panel consisting of a
member of the City Law Department, two Council Members consisting
of the Council president and an at-large Councilmember, an individual
designated by the Mayor, and the Chief of Police. The hearing shall
be scheduled within 30 days of the date of the order, unless extended
by the Law Director.
(4)
The review panel is authorized to impose any fines, conditions, restrictions,
suspensions, or combination thereof authorized by the State of New
Jersey. In the absence of state-specified penalties, the City may
issue fines up to, but not to exceed, $2,000 per offense and/or suspension
of license for a period not to exceed six months or revocation of
any license.
D.
Inactive licenses. Following the commencement of sales of cannabis
or cannabis products, the Director of Law may suspend or revoke any
license if the licensed premises have been inactive or unoccupied
by the licensee for at least six months.
E.
State license. The Director of Law may suspend or revoke any license
if the corresponding state license or permit for the subject location
is expired, surrendered, suspended, or revoked.
