City Council split, considers revenue, whether voters support one in town
SOMERS POINT — City Council debated the merits of a recommendation to allow a cannabis dispensary Feb. 9, with several members indicating they are against the proposal.
Following a statewide referendum in November 2020, in which voters approved the legalization of recreational use of cannabis products by about 2-1, New Jersey enacted the Cannabis Regulatory, Enforcement Assistance and Marketplace Modernization Act that legalizes recreational use and creates a statewide marketplace for its sale and taxation.
Every municipality in the state faced a deadline of Aug. 21, 2021, to permit, prohibit or otherwise limit cannabis businesses or be stuck with what the state guidelines allowed for the next five years, with those that opened during that time able to continue despite possible later restrictions.
The measure created six types of businesses permitted to operate — cultivator, manufacturer and retailer, on which municipalities may enact a local tax of as much as 2 percent, and wholesaler, on which cities can charge as much as a 1 percent tax. The final two types are distributor and delivery.
On Feb. 9, Councilman Rick DePamphilis reported that the Cannabis Committee recommends allowing one retail cannabis business.
“The Cannabis Committee has decided to make the recommendation to council, first of all to take advantage of the additional revenue that could provide the city and to allow for one location along our Route 9 corridor and try to keep it away from the schools,” DePamphilis said.
Somers Point voters supported the state referendum in a similar fashion, with about 67 percent favoring decriminalization.
“Considering the fact that Somers Point residents did go for this, we should take advantage of any income we can get,” DePamphilis said.
Council President Janice Johnston agreed, noting the revenue is the only reason she supports the idea.
“It’s here. It can be delivered here and we wouldn’t make any revenue if it gets delivered, so we may as well take advantage of that,” Johnston said.
DePamphilis said those who need it and want it are going to buy it.
“Those who need it would appreciate it being close by,” he said.
Councilman Howard Dill said he does not trust the state not to withdraw the funds when it needs it, noting it was done before with energy receipts taxes. Upper Township, for example, lost more than half of its annual income for hosting the B.L. England Generating Station — about $6 million — when the state decided to cut the payment.
“If we are doing it just for the reason of revenue, I don’t trust the state of New Jersey that they wouldn’t pull that revenue back when they need it,” Dill said, adding he would not be in favor of unless there was a guarantee the city would get the tax revenue.
“They have done it before. They have a history of it and that is my only concern,” he said.
Councilman Sean McGuigan asked for a projection of the revenue, saying if the city could generate only $1,000 or even $10,000 that it would not be worth allowing a dispensary.
“I’m not guaranteeing anything. It could be $100,00. It could be $10,” DePamphilis said.
“I’m not willing to take that chance,” McGuigan replied. “I’m not willing to put a dispensary in the middle of our business district not knowing the benefits.”
Dill agreed.
“Is there any projections whatsoever what the revenue may or may not be, or are we just throwing our hands up and saying ‘We will take whatever’?” he said.
Johnston said there is little data available since most operating dispensaries opened only last year. She said she spoke with an owner from northern New Jersey and the numbers were high, but noted she could not make a comparison based on size or other factors.
Johnston suggested the committee do some research into revenue projections, such as visiting the Botanist in Egg Harbor Township and meeting with its owners.
She added that the city’s Economic Development Advisory Commission conducted an extensive study and also recommended allowing cannabis businesses.
DePamphilis said the state has many ways of keeping money from municipalities.
“There is no guarantee. If the state wants money, all they have to do is decrease your state aid. There is no guarantee that we are going to get the same aid each year but we take it, whatever it is,” he said.
Dill said he has an issue supporting the proposal because the city would have no recourse if the state decided to take the money.
Noting she is a member of the Cannabis Committee, along with DePamphilis and Councilman Joe McCarrie, Councilwoman Karen Bruno said Somers Point voters, like those across the state, supported the ballot measure.
“This is what the voters voted for and we honored that,” she said.
The history buff noted City Council was having the same conversation 100 years ago when Prohibition ended.
“We stepped up and wrote the laws we wanted for our city. Right now there aren’t really laws, it’s all very vague. This gives us the opportunity to continue looking further to decide what we want to do and what we want for our community and what voters want.”
McGuigan pointed out the ballot measure did not ask if voters wanted a dispensary in their city but whether they approved legalizing recreational use.
“It’s two different things,” he said.
He questioned whether the EDAC ever officially endorsed allowing a dispensary, noting a poll conducted online was “somewhat unscientific,” garnering few responses.
“I don’t believe, from my discussions in the circles I travel in, the public wants a dispensary,” McGuigan said. “Mr. DePamphilis said we need revenue but we don’t have projections what that revenue might be.”
Councilman Mike Owen said the EDAC did an extensive study and that member Max Slusher has revenue projections.
“I still feel that there’s more questions that have to be answered. There’s the revenue impact but more importantly the social impact. I’m not ready to support that, it’s really up to the individual,” Owen said.
Johnston said the committee should get estimated numbers and present them at a future meeting.
By CRAIG D. SCHENCK/Sentinel staff