By: Isaac Linsk, Follow South Jersey Intern
ATLANTIC CITY. N.J. – Atlantic City has always been a city defined by its exceptions in industry and culture. Founded by Johnathan Pitney as a health resort at a time when a day at the beach was an accepted prescription for a disease. The city kept its resort status throughout the late 19th and early 20th century drawing in hundreds of thousands of guests and plenty of ill gotten gains, which is the inspiration for the book and HBO series Boardwalk Empire.
After economic downturns in the mid 20th century, these exceptions almost became emblematic of the city. With the 1976 gambling referendum changing the city’s identity from simply another beach town to New Jersey’s only gambling destination. While helpful in the short term, these exceptions do little more than provide a quick fix for a city in need of a cultural and economic overhaul.
In 2024, that exception is cannabis.
The State of New Jersey legalized adult-use recreational cannabis back in 2021 in all encompassing bill called the New Jersey Cannabis Regulatory Enforcement Assistance and Marketplace Modernization Act (CREAMM) in order to allow the states Cannabis Regulatory Commission (CRC) to develop the groundwork for the recreational cannabis industry in NJ.
In order to cash in on the green rush, the two governing bodies in Atlantic City, the Municipal Government and the Casino Redevelopment Authority (CRDA) enacted a “Green Zone Redevelopment Plan” in August of 2022 in order to attract prospective cannabis businesses into the coastal city.
The most important aspect of the Green Zone plan is not requiring the prospective cannabis investors to receive a land-use variance for their business, a variance is required for most types of businesses and buildings in order to be operational. For example, a potential cobbler might need a variance to build his business within the Green Zone, but anyone looking to get into the cannabis game has the green light.
“This is another step in the right direction to making Atlantic City the East coast’s cannabis hub, which is our goal,” said Kashawn “Kash” Mckinley during the signing of the first adult-use cannabis license back in April of 2023. Mckinley is the director of constituent services and chair of the cannabis review board for the city.
While the city’s leadership tries to pave the way for AC to be the East Coast Hub for Cannabis, there have been a few hurdles along the path to greener pastures.
The bulk of criticisms against the city’s Green Zone and cannabis economy don’t have to do with opposition to the substance itself, but rather the proportion of cannabis businesses currently in the process of opening in the otherwise small city of less than 40,000 people.
Currently, at least 24 different cannabis businesses have been approved with another 30 proposals in line to be reviewed by the CRDA. For comparison’s sake, Atlantic City only has 75 licensed alcohol distributors like liquor stores, bars, and clubs. To further the comparison, while Atlantic City might have 50+ cannabis businesses serving tourists and locals alike, it does not have a single major grocery outlet to serve its residents.
“We’re going to look to make some amendments to that document,” Lance Landgraf, director of planning and real estate development for the CRDA and the Mayor of Ventnor, stated. “It’s the city’s document, but they need our approval because we have the land use jurisdiction over it…my hope is that we can tweak it to make it a little bit better. I’ve asked and the city has not responded positively about limiting the number of licenses…. I think they should limit them. I think they should have limited them to 10 or 15.”
The influx of cannabis into the city is at odds with some of the other efforts local officials have taken to make the city a more family-friendly place. For instance, at the end of last year, the city passed an ordinance to ban smoking from the city’s beaches and famous boardwalk.
While objectively a good move for public safety, keeping people from lighting up on the boardwalk poses an important question for the city.
Where are people allowed to consume cannabis?
In the way that CREAMM was initially structured, the only place you could legally consume cannabis was within the confines of a private residence. But for Atlantic City, a place where more than 70% of the population rents their home and more than 27 million people vacation, that isn’t an option.
The state’s CRC does have a remedy for this issue, but it isn’t without drawbacks. In order to provide cannabis enthusiasts with a safe place to consume and congregate, the CRC has been working on the framework for cannabis consumption areas or weed-lounges for the last year with rules just being approved in January.
But the approved rules are not conducive to a successful hospitality business, cannabis or otherwise. One of the most contentious regulations that these consumption areas will need to adhere to is the inability to sell food or drink in-house, instead only selling cannabis products and allowing guests to bring in their own food or drink.
“These licenses are given to retailers who are expected to build hospitality driven experiences and they don’t typically know how to do that or they don’t have the funding to do that,” Sara Stewart, founder of the cannabis hospitality coalition and president of Ritual Cannabis Hospitality, said. “So in a consumption lounge, you need about 100 seats to be profitable and that’s just based off of traditional restaurants… If you’re thinking about [just] a dispensary that’s cranking and they have an average price per person of let’s call it $60 and every two minutes someone’s coming to the register… Now we’re talking about a [separate] consumption lounge where there’s four heads on a joint, it might be $12 a person and it’s going to take you 90 minutes to split those tables each time. So for profitability, consumption lounges that only sell cannabis won’t really be profitable because cannabis is their only revenue stream.”
There are currently efforts from lobbying groups to change the food and drink rules. Not allowing these cannabis businesses multiple streams of revenue outside of cannabis sales alone will likely cause many of them to fail in the initial few years after opening.
Even while actively seeking to promote and encourage cannabis businesses through the Green Zone plan, some prospective business owners have found considerable difficulty in getting their business operation.
“I can tell you what we accomplished in Chester, Pennsylvania in 26 days,” Jon Cohn, CEO of Agronomed Pharmaceuticals and the main financial backer behind High Rollers dispensary and lounge in Atlantic City, said. “It’s taken an excess of eight months to accomplish in Atlantic City. It’s astronomically harder in New Jersey. The bureaucracy aspects are a big, big challenge… Atlantic City, it’s its own unique animal because there’s two municipalities essentially, there’s the CRDA, but then there’s still the city that you have to deal with and go through.”
Cohn has had experience in the cannabis industry for just shy of a decade, allowing him to be privy to the development of cannabis businesses both in New Jersey and in Pennsylvania where he started his own cannabis business.
“One of the key differences is in PA, legislatively, you had to be operational within six months of getting your license,” Cohn explained. “So what that does is it makes all the other agencies expedite you to the top of the list because they don’t want to be the cause of these facilities not getting open. New Jersey didn’t put in any efforts to expedite the process.”.
Atlantic City is currently at odds with itself. With the municipal governments performing a balancing act between creating a new vice-driven economy inside of the Green Zone and rehabilitation of the city’s perception through creating a more family-friendly atmosphere.
One of the products of this balancing act is the city’s Great Day Fest. Named after current Mayor Marty Small’s trademark slogan, “It’s a great day in the city of Atlantic City,” the semi-annual festival serves to highlight the city’s cannabis culture as well as local artisans and vendors. Presented by Dirty Politics, a local skateboarding and apparel brand, the event toes a very fine line between what is legal to do with cannabis and what isn’t.
Despite being well received by locals, the cannabis aspect of the event which featured prominently on early advertising was slowly phased out in the event’s follow-ups which happened at Brighton Park and the Showboat Hotel respectively.
“If we continue to leave Pacific Avenue the way it’s been since the ‘70s, then the perception of the town won’t change, just the vacant lots and boarded-up buildings,”said Mayor Marty Small Sr. in a recent speech at the East Coast Gaming Conference at the Hard Rock Casino in April.
The mayor’s statement is at odds with the industry his office is pushing for in Atlantic City. By throwing caution to the wind and allowing anyone willing to spend the money to establish a cannabis business in Atlantic City, the vacant buildings and boarded up businesses won’t change but instead will just have a coat of green paint in five to ten years time.
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