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Township Council approval of an ordinance that limits the number of cannabis retailers in the township – while grandfathering in a few more that haven’t moved beyond receiving their state licenses – comes against the backdrop of Franklin’s operating retailers paying their 3rd Quarter cannabis retail taxes.

Council members said the cap on cannabis businesses is necessary because they were told by state officials that no more than a half-dozen or so licenses would be approved for Franklin. As things stand now, there are about 23 retail cannabis licenses that have been approved for the township.

The ordinance caps at 18 the number of retail cannabis stores allowed in the Eight Villages, but allows for any licensee who received their formal state Cannabis Regulatory Commission license approval before the ordinance took effect on October 22.

Currently, there are 11 retail cannabis stores operating in the township, with seven more in the process of opening, Township officials said. There are five licensees who have not moved beyond the status of having their retail license application approved, Township officials said.

There were four retail cannabis stores operating at the end of 2023. Of those original four – Bloc Somerset, Leaf Haus, Silverleaf Wellness, and Unity Road, only Bloc seems to have been affected by the increased competition.

Bloc’s 2nd Quarter year-over-year revenue decreased from $3,365,659 to $1,695,788 and 3rd Quarter sales dropped from $2,383,418 to $1,526,789 from 2023 to 2024.

The other three original stores recorded year-over-year increases.

Cannabis businesses pay Franklin 2 percent of retail receipts quarterly.

For the 3rd Quarter of 2024, the Township received $104,761.64 in taxes from the nine operating retailers.

Year-to-date, the Township has received $261,878 in cannabis taxes, according to the township’s figures.

Those taxes are based on $12.9 million in total sales for the first three quarters of 2024, according to the Township’s figures.

In 2023, Franklin received $201,079.42 in cannabis retail taxes from the four original retailers, none of which were in operation for the entire year.

The 3rd Quarter, 2024 results for each dispensary were:

• Silverleaf Wellness: $1781,766.69 in sales, paid $15,635.33 in taxes.
• Leaf Haus: $555,394.72 in sales, paid $11,107.89 in taxes
• Unity Road: $1,036,112 in sales, paid $20,722.24 in taxes.
• Bloc Somerset: $1,526,789 in sales, paid $30,535.78 in taxes.
• Timber 5: $29,539 in sales, paid $590.78 in taxes.
• The Dispensary of Somerset: $253,929.44 in sales, paid $5,078.59 in taxes.
• The A. Cannabis Co.: $507,541.12 in sales, paid $10,150.82 in taxes.
• Fresh Grow: $314,585 in sales, paid $6,291.70 in taxes.
• Citi Roots paid $4,648.51 in taxes, but no sales total was provided.
• Bleachers Dispensary and Got Your Six were listed as not in operation when these figures were tabulated.

One current operator, Shani Madaminova, a co-owner of Leaf Haus, asked the Council at its October 22 public hearing to pass the cap to help the nascent cannabis industry in Franklin.

“I want to succeed and stay here,” she said. “I want to create jobs. I also want to open a cultivation site and a growing facility and manufacturing facility here on Davidson Road. But right now, I’m kind of a little bit scared because I’m not even sure if you cannot support me as a dispensary for me to bring the cultivation and the manufacturing.”

“Even 18 is a lot of licenses being issued,” she said.

Township Attorney Lou Rainone told Madaminova that the Township could not rescind licenses already granted by the state CRC.

“For instance, you’re a licensee in the township,” he said. “We don’t have the ability to come and say to you, well you should close because the other nice woman who was here has a cannabis facility and we would rather her succeed than you.”

“The mistake we made was we trusted the state, and the state said you’re not going to get more than six or seven,” Mayor Phil Kramer said. “So we said, well, that’s fine.”

Rainone said that one problem with the state’s plan is that only about 36 percent of New Jersey towns voted to allow cannabis to be sold within their borders.

“So when the law passed, people rushed to get into this business and then found that they had to rush to find someplace that would allow a license,” he said. “And there’s a lot of towns that are limited to one license.”

Rainone said that as the attorney for 65 towns, he fields many calls from cannabis entrepreneurs looking to set up shop.

“it’s not for the town to create a sustainable marketplace for cannabis in this municipality,” he said. “We don’t have the economic regulatory authority to do that. The state says we can allow licenses, we allow them. But if you open a pizza place next to another pizza place, then either you have a much better pizza or you’re both going to struggle. That’s what happens here.”

“And if you’re on a road that has 10 pizza places, you can’t come to us and say, I don’t understand why you allow so many pizza places,” he said.

The ordinance, he said, “is a reaction.”

“We’re not looking to put anybody out of business,” he said. “However, there has to at some point in time be a cap on the number of them, legitimately, because the number of cannabis licenses that were supposed to be spread across 564 municipalities are now being spread across 209 municipalities.”

Councilman Carl Wright (D-Ward 4) said he agreed with the cap.

“Now we have dispensaries on Hamilton Street and one is four doors or five doors away from the next dispensary,” he said. “Okay now somewhere along the line something’s gonna close because … it’s just not going to work.”

“Sometimes you got to say enough is enough and we’re saying enough,” Wright said.

Councilwoman Kimberly Francois (D-At Large) said she was “alarmed” about the number of cannabis retailers coming into town.

“We are doing this to prevent market over-saturation,” she said. “What we’re trying to do is be fair to the people that are already in the pipeline, we don’t want to prevent them from opening up their businesses because they’re already in the pipeline.”

“I know it’s probably too many at this point, we may be reactive at this point, but I think if we did nothing, we would probably have 40 more coming in,” she said. “So people may think it’s not fair, but we need to do what we need to do to make the quality of life here in Franklin Township the best that it can be.”

Deputy Mayor Ed Potosnak said that he did not originally support the cap, but he has changed his mind.

“But I was very much persuaded by that sort of bill of goods where we really didn’t think this many would be approved,” he said. “And in fact, I went to my community in Kingston and said, you know, we are agreeing that everyone who is applying, that they are allowed in the zone. We had no vetting process for anyone. We didn’t know if they had enough financing. We didn’t set up committees to, you know, rank the order of what projects were, you know, more in line with something that we came up with.”

“We let the free market sort of decide,” he said.

Potosnak said that he hoped that if the current licensees are successful, that the Council would revisit the cap limit.

Councilwoman Shepa Uddin (D-Ward 2) said she, too, agreed with the cap as a way to support current cannabis businesses in town.

“You know putting a cap on it right now just helps limit the dispensers because I think that’s just been a big number, especially on Hamilton Street,” she said.

“Maybe it is too high, too low, we don’t know, we will know in due course and then we will make more decisions on that,” Councilman Ram Anbarasan (D-At Large) said about the cap number.