RED BANK: POT SHOP HOPEFULS SUE BOROUGH FOR LICENSE

The site of the defunct Exxon station at 199 Riverside Drive.  (Photo by John T. Ward. Click to enlarge.)

By BRIAN DONOHUE

NOTE: The original version of this story has been updated to include a response from the borough attorney.

A cannabis retail business shut out by Red Bank’s three-shop limit is suing the Borough demanding officials issue more licenses.

The owner of The Garden at Red Bank is seeking to open a cannabis shop at the site of a long-vacant Exxon station where Riverside Avenue meets Rector Place next to Cooper’s Bridge, but has not received a required cannabis retail license from the borough.

The lawsuit filed by The Garden in State Superior Court alleges “serious and substantial irregularities” in the process by which borough officials issued three licenses to other operators last year.

A concept illustration of the proposed building presented to the planning board last year.  (Photo by Brian Donohue. Click to enlarge.)

Attorneys for The Garden owner, Janie Dinar of Long Branch, argue the business was repeatedly given “inaccurate and misleading information” leading them to believe they were in line for the third license, according to the complaint filed in July. Instead, they were effectively shut out after the business had “expended substantial effort and costs” getting a state cannabis license and other approvals, the complaint states.

The borough, the lawsuit says, has still never responded to its application for a cannabis retail license.

“The Borough conducted a flawed, inconsistent and ultimately prejudicial licensing process both generally and particularly with respect to The Garden,’’ the lawsuit reads. 

The suit demands the courts force the Borough to increase the number of licenses and review, grant or deny The Garden’s license application. It also demands the borough “explain with sufficiency its reasoning” for its lack of response and pay unspecified fees and costs. Read the full complaint here.

In a response filed with the court, Borough Attorney Greg Cannon denied the allegations and asked the court to dismiss the lawsuit.

In an email to redbankgreen Monday, Cannon wrote:

In late 2023, all three licenses were issued by the Borough to the first three applicants who satisfied all criteria under the Borough Ordinances.  That is, the Borough issued the three licenses using time-of-application as the primary criteria so that there was an undisputedly fair process for all applicants.

Because The Garden at Red Bank did not complete the process, nor satisfy the criteria as quickly as the first three applicants, it was the fourth applicant to seek a retail cannabis business license from the Borough.  As such, The Garden at Red Bank was wait-listed because there are no more available licenses under the Borough Ordinances.

 This lawsuit results from the Borough’s simply upholding the law as written.  The Garden at Red Bank has filed litigation seeking to force the Borough to issue a fourth license – in violation of the Borough Ordinances in place.

Under state law, Cannon added, the three-license limit cannot be revisited until 2026.

Mayor Billy Portman and other officials have repeatedly stated the Borough Council has no plans to increase the number of licenses set in 2023.

But even after the limit was put in place, The Garden owners say they were led to believe they were on track to get all the approvals they needed to open a pot shop at the vacant gas station site. 

That started with a November 22, 2022 resolution passed by the Borough Council confirming  that the issuance of a license to The Garden would not exceed the Borough’s established limit, according the suit.

The Garden then proceeded to take steps to secure a state cannabis retail license. In December 2023, the company also received  Red Bank Planning Board approval for construction of a 2,500 square foot shop at the gas station site, which had previously been approved for a hotel.

Then, on April 12, 2023, the borough passed a revised cannabis ordinance limiting the number of retail licenses to three. 

Even afterwards, The Garden says the borough officials told The Garden that “only two licenses had been awarded.”

“Only as a result of a casual remark by the Planning Board’s engineer to The Garden’s project engineer on the eve of its appearance before the Planning Board did The Garden learn that the Borough had already committed to grant three Class 5 cannabis license to other operators,” the complaint reads.

The lawsuit comes as little surprise in the wake of the chaotic process by which the borough crafted its cannabis rules. That process, which one retailer called a “shit show” sparked promises of just the type of lawsuits the borough now faces.

Red Bank’s council officially made the borough cannabis-friendly in August, 2021, and by the end of 2022, had awarded resolutions to 14 would-be retailers and three prospective cultivators  –  each titled “RESOLUTION ACKNOWLEDGING THAT CANNABIS BUSINESS LICENSE APPLICANT HAS PROPOSED A TYPE OF CANNABIS BUSINESS THAT IS PERMITTED WITHIN THE BOROUGH AND WOULD NOT EXCEED ANY MUNICIPAL LICENSE LIMIT.

But in April, 2023, the council amended the local law to create a Cannabis Review Board, while also limiting the number of “class 5” retail licenses at three. The change was drafted behind closed doors by a council subcommittee, and drew threats of lawsuits from entities who claimed they’d lose hundreds of thousands of dollars invested in would-be cannabis businesses.

There are currently two cannabis retailers operating in Red Bank, with a third,  Canopy Crossroad planning to open soon. 

A fifth retailer seeking approvals to open in a former laundromat at 45 Bridge Avenue has had two hearings before the Planning Board but has not yet received a decision on its application. Attorneys for that applicant, Flora RB, (formerly Two River Green) have not disclosed their plans for how they would obtain a license.

redbankgreen editor Brian Donohue may be reached via email at  [email protected] or by calling or texting 848-331-8331 or yelling his name loudly as he walks by. Do you value the news coverage provided by redbankgreen? Please become a financial supporter if you haven’t already. Click here to set your own level of monthly or annual contribution.