NJ-CRC Municipal Cannabis Newsletter: Fresh Look, Same Vital Updates

Help us learn about your municipality and how we can best support you. Take this 2-minute survey about your cannabis regulations or your town's choice to opt out before Tuesday, September 30. Please use the narrative spaces provided to share any challenges, successes, and lessons learned. Your input will help the NJ-CRC better understand how municipalities are approaching cannabis operating within their towns, such as business caps and how cannabis revenue supports municipal budgets. The information collected will be used to inform conversations with towns that have not opted in, and to provide the Commission with real-world examples, challenges, and lessons learned that will shape future guidance materials and resources for municipalities.  

Do you know we have a Government Relations page on our website dedicated to providing information for and related to municipal governments and their cannabis regulations? The webpage features a searchable chart of municipalities that opted into the adult cannabis market, filters municipalities by county, and breaks down the types of business classes each municipality permits in their jurisdictions. 

Is your municipalities' information listed correctly in the table? Is it not listed at all and should be? Take a look, and if not, you can reach out to NJ-CRC Director of Government Affairs Matthew Craig.

As of July 2, 2025, the NJ-CRC is accepting applications for cannabis consumption area endorsements from all Social Equity, Diversely-Owned, microbusinesses, and all other Class 5 Retail operators. During the July 15 public meeting, the Board approved the first four cannabis consumption area endorsements. 

Municipalities are integral to the approval process for licensed cannabis businesses seeking to operate a cannabis consumption area. We outline key points for the municipal approval process below.  

Municipalities are authorized to approve or prohibit cannabis consumption areas through local ordinances. To ensure compliance, municipal ordinances should be consistent with the provisions of the Cannabis Regulatory, Enforcement Assistance, and Marketplace Modernization Act (CREAMM Act) and related regulations.  

Municipal approval is required for an applicant to secure a state endorsement from the NJ-CRC. Municipalities must complete and submit the required Cannabis Consumption Area Municipal Approval form – provided to the municipalities by the cannabis business – to confirm their authorization. The form is simple and asks for the municipality to include a name, their title, contact information, and attesting they have reviewed the cannabis consumption area endorsement application for the cannabis business.  

Your municipality can: 

• Govern the location, operations (including, but not limited to, food delivery allowances, business signage rules, and communication with municipal emergency services), and hours of operation for cannabis consumption areas. 

• Specify minimum distances from sensitive sites like schools, daycares, or places of worship. 

• Ensure compliance with local and state laws, including the Americans with Disabilities Act (ADA). 

• NOTE: See N.J.A.C. 17:30-5.1 for more exhaustive information regarding municipal authority” 

The NJ-CRC will not conduct an independent zoning analysis. Applications will only be considered once the Commission receives a completed municipal authorization form confirming that the applicant’s submission complies with local ordinances. 

Municipalities do not need to create additional regulations or processes to engage in this program. You may choose to rely on existing NJ-CRC regulations and defer to the New Jersey Cannabis Regulatory Commission’s comprehensive rules and guidelines without creating separate, municipality-specific processes. 

The NJ-CRC will forward completed application documents to your municipality unless local regulations prohibit cannabis consumption areas. These materials will provide information sufficient for you to verify compliance with your local restrictions. Please note: 

• Municipalities may not request or accept anything of value from applicants in exchange for endorsements, in accordance with N.J.S.A. 40A:9-22.5. 

• Aggrieved parties may request a hearing in Superior Court if their municipal endorsement is denied or revoked. 

We encourage you to prepare for application reviews and familiarize yourself with the application information and materials, such as the Notice of Application Acceptance Addendum for cannabis consumption areas and the Municipal Approval form. 

We invite your municipality’s active involvement in shaping the future of cannabis consumption areas. Your valuable insights and collaboration contribute to shaping a well-regulated, communal experience for those 21 and older to enjoy cannabis in a safe, secure space. 

Is municipal approval required for a licensed cannabis business to operate a cannabis consumption area legally? 

Yes. All licensed dispensaries (Class 5 Retailer businesses) looking to operate a cannabis consumption area must receive approval from their local municipality to receive an endorsement from the NJ-CRC. 

The Municipal Approval form can be found on our website, and the applicant will submit the form to their municipality for endorsement approval. The Municipal Approval form is required as part of the approval process.  

What role does the municipality play in the approval process of a cannabis consumption area? Municipalities play a crucial role in the approval process of any licensed cannabis business. Licensed dispensaries (Class 5 retail businesses) seeking a cannabis consumption area endorsement must obtain approval from the municipality where the consumption area is to be located. 

If a municipality allows such areas, the NJ-CRC forwards the application within 14 days of receipt from the cannabis business. The municipality, in turn, evaluates compliance and responds with its decision within 28 days of receiving our communication. 

Can a municipality limit the number of cannabis consumption areas? Yes. Municipalities have the authority to establish limitations on the number of cannabis consumption areas allowed in their jurisdiction. 

Can a municipality prohibit all cannabis consumption areas? Yes. Even if a municipality allows cannabis businesses within its jurisdiction, they may authorize or prohibit – through the enactment of an ordinance or regulation – the operation of a locally endorsed cannabis consumption area. Such ordinance or regulation may not conflict with the Personal-Use Cannabis Rules. 

Can a municipality set regulations governing a cannabis consumption area's location, activities, and hours of operation? Yes. Municipalities have the authority to regulate cannabis consumption areas. Ordinances or regulations can be established to govern the location, the guidelines or requirements related to the activities within the consumption areas, such as the types of events allowed and safety measures, as well as hours of operation and zoning ordinances pertaining to reasonable minimum distances from schools, playgrounds, and places of worship. 

Don’t cannabis consumption areas violate the New Jersey Smoke-Free Air Act? No. The New Jersey Legislature authorized cannabis consumption areas through N.J.S.A. 24:6I-21. Indoor cannabis consumption areas are allowed if they comply “with all ventilation requirements applicable to cigar lounges.” Outdoor cannabis consumption areas are allowed if they do “not result in migration, seepage, or recirculation of smoke or other exhaled material to any indoor public place or workplace.” 

Indoor consumption areas are required to be structurally enclosed spaces on the same premises of the licensed cannabis dispensary. These areas must have solid walls or windows, be accessible only through an interior door, and comply with ventilation requirements applicable to cigar lounges. It's important to note that these regulations specify adherence to cannabis businesses operating a consumption area have HVAC systems robust enough to ensure proper ventilation and prevent smoke or vapors from affecting neighbors. 

Can municipalities allow one type of consumption area (e.g., indoor) but not the other (e.g., outdoor)?  Yes. Municipalities have the authority to determine the types of cannabis consumption areas permitted within their jurisdiction. A municipality may choose to authorize only indoor consumption areas, only outdoor consumption areas, or both, in accordance with its local ordinances and planning considerations. 

What are the benefits for our municipality allowing cannabis consumption areas within our jurisdiction? Allowing cannabis consumption areas in your municipality can bring various benefits to municipalities. These include providing a regulated space for cannabis consumption, fostering community engagement, potentially generating additional tax revenues, creating new business opportunities, and providing equitable access to those who cannot consume cannabis at home, such as renters or those living in federally subsidized housing. 

Are there potential economic benefits for our municipality and its residents? Yes. Municipalities collect up to 2% sales tax on cannabis and cannabis product transactions within their jurisdiction. It is expected that cannabis consumption areas will increase sales with economic benefits for the municipalities they open in.  

Who can municipalities contact for more information or assistance? For more information or assistance regarding cannabis consumption areas rules and regulations, municipalities can reach out to Matthew Craig, Director of Government Affairs

The NJ-CRC will host a table in the exhibitor hall throughout the duration of the 2025 New Jersey League of Municipalities Annual Conference, November 18-20, in Atlantic City. 

We will share our booth location in the next issue of Municipal Cannabis.