As more and more states continue to legalize cannabis for medicinal and/or recreational purposes, new issues are seemingly arising for landlords who wish to lease their property to businesses for the purpose of growing, manufacturing and/or selling cannabis. This blog discusses some issues landlords need to consider when leasing their premises for cannabis related activities.
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Important Considerations for Leasing Cannabis Related Facilities
For any lease, there are always numerous potential concerns and pitfalls. However, when dealing with a cannabis lease, landlords must flesh out one significant concern that does not exist with traditional leases. This concern stems from the illegality of cannabis at the Federal level.
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Obtaining Zoning Approvals for Marijuana Facilities in New Jersey
New Jersey, like many other states, allows for the cultivation and sale of marijuana for medicinal purposes. Marijuana is not yet allowed for recreational use in New Jersey. While medical marijuana use and consumption is legal under New Jersey state law, it remains illegal under Federal law, which leads to an interesting and complicated situation when an applicant seeks zoning approvals for a marijuana facility. Planning and/or Zoning Boards are essentially asked to approve a use that is illegal under Federal law.
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Who Can Be a Redeveloper of Property in New Jersey?
One of the questions that I am frequently asked is, “Who can develop property in a redevelopment area?”
As discussed below, redevelopment can be done by anyone, subject to restrictions discussed below, and is not necessarily restricted to just large scale developers.
A redeveloper is defined by New Jersey’s Local Housing and Redevelopment Law (the “LHRL”) as “… any person, firm, corporation, or public body that shall enter into or propose to enter into a contract with a municipality or other redevelopment entity for the redevelopment or rehabilitation of an area in need of redevelopment…”.
Thus, for a redeveloper to make use of the LHRL, a municipality must have first declared a property or properties as an area in need of redevelopment.
Good News for Developers: New Jersey Permit Extension Act Extended
Just before the end of 2014, Governor Christie signed legislation that extended the time periods contained in the New Jersey Permit Extension Act. The Permit Extension Act deals with various land use approvals and permits that were either approved and/or set to expire after January 1, 2007.
The purpose of the Permit Extension Act was
Does Affordable Housing Transform a Project into an Inherently Beneficial Use?
The case of Advance at Branchburg II, LLC V. Township of Branchburg Board of Adjustment, (N.J. Super. Ct. App. Div. 2013) dealt with the issue of whether a residential development could be treated as an inherently beneficial use when only approximately 20% of the development was utilized for affordable housing. The developer was seeking a d (1) use variance for a multi- family residential development consisting of 292 units, of which 59 would be affordable housing units. The developer argued that the inclusion of the affordable housing component rendered the entire development an inherently beneficial use.
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Can a Developer’s Agreement Obligate a Developer to Pay for Off-Site Improvements Prior to the Commencement of the Development?
The case of Ginsburg Development Companies, L.L.C v. Township of Harrison stands for the proposition that a developer can be responsible for the cost of off-site improvements that are made prior to the construction of the proposed development. This is an unpublished opinion decided by the Superior Court of New Jersey, Appellate Division.
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