On March 3, 2026, the Appellate Division of the Superior Court of New Jerey held that a prospective cannabis retailer is entitled to an explanation by a municipal governing body for denial of an application for a “resolution of support” (ROS), which is a requirement under the NJ Cannabis law to obtain a Retail Cannabis License.
A City Council is required to provide a discernible basis for denying an ROS application to inform the applicant and the public of its reasons, as well as afford meaningful appellate review. A City Council’s failure to do is a reversable error.
In Higher Breed NJ LLC v. The City of Burlington Common Council, 2026 N.J. Super. LEXIS 33 (App. Div. March 3, 2026)(Approved for Publication), the Appellate Court considered whether the City of Burlington Common Council (City Council) was required to provide a reason for denying Higher Breed NJ LLC’s (Higher Breed) application for a ROS, as required under N.J.A.C. 17:30-7.10(b)(9). A ROS is a requirement to obtain a Cannabis Retailer License (CRL) from the State of New Jersey Cannabis Regulatory Commission (CRC) under the Cannabis Regulatory, Enforcement Assistance, and Marketplace Modernization Act (CREAMMA), N.J.S.A. 24:6I-31 to – 56.
Here, after the City Council held three separate public meetings and after hearing testimony from Higher Breed in support of the ROS, and from an objector (a real estate broker alleging Higher Breed failed to pay him a real estate commission for arranging a commercial lease at the subject property to Higher Breed and referring to Higher Breed as “unprofessional” and alleging they exhibited “ethically questionable behavior”), the City Council announced (without any explanation or reasons) it will not grant Higher Breed’s application for the ROS. The City Council relied on a recent Appellate Division decision in Big Smoke LLC v. Township of West Milford, 478 N.J. Super. 203 (App. Div. 2024) (municipalities have wide discretion in deciding to grant, deny or reconsider requests for an ROS for cannabis businesses).
CREAMMA specifically directs that a business intending to sell cannabis from a retail establishment must obtain “a Class 5 [CRL]” from the CRC to operate a retail premise. N.J.S.A. 24:6I-42. The CRC has issued regulations identifying the proofs a prospective business must submit in its application, including zoning approvals and “[p]roof of local support.” N.J.A.C. 17:30-7.10(b).
The CRC requires “[p]roof of local support, which shall be demonstrated by resolution adopted by the municipality’s governing body, or where the municipality has no governing body, a written letter of support from the municipality’s executive.” N.J.A.C. 17:30-7.10(b)(9). “‘[P]roof of local support’ [is] embodied in a municipal governing body’s resolution.” Big Smoke LLC, 478 N.J. Super. at 219 (citing N.J.A.C. 17:30-7.10(b)(9)).
The Appellate Court in Higher Breed found:
The City Council’s failure to provide a reason for denying Higher Breed’s ROS application prevents the applicant and public from understanding its action, and meaningful appellate review. We have held that a municipality’s discretionary determination shall be “vested with a presumption of validity[] that will be upheld where any state of facts may reasonably be conceived to justify the action.” Vineland Constr. Co. v. Township of Pennsauken, 395 N.J. Super. 230, 255 (App. Div. 2007) (citing Quick Chek Food Stores v. Township of Springfield, 83 N.J. 438, 447 (1980)). Stated another way, for the City Council’s resolution to be accorded deference, there must be a clearly discernible basis provided to support its decision.
Additionally, a governing body has the responsibility to set forth findings of facts in its decision to facilitate meaningful review. Cf. In re Application for Med. Marijuana Alt. Treatment Ctr. for Pangea Health and Wellness, LLC, 465 N.J. Super. 343, 375 (App. Div. 2020) (providing that “an administrative agency acting quasi-judicially must set forth basic findings of fact, supported by the evidence and supporting” its determination “for the salutary purpose of informing the interested parties and . . . any reviewing tribunal of the basis on which the final decision was reached so that it may be readily determined whether the result is sufficiently and soundly grounded” or is arbitrary, capricious, or unreasonable). Despite the lack of statutory directive, “[t]he requirement of findings is far from a technicality and is a matter of substance.
The Appellate Division affirmed in part and vacated in part the trial court’s decision and remanded the case back to the City Council. The Appellate Division held “the City Council was required to provide a discernible basis for denying Higher Breed’s ROS application to inform the applicant and the public of its reasons, as well as afford meaningful appellate review.” “The City Council on remand is directed to give further consideration to Higher Breed’s application and sufficient reasons for its decision regarding Higher Breed’s ROS. We express no opinion on the outcome of this matter.”
The lesson here is a diligent applicant should protect the record before a City Council in the event of an appeal to the Court. When applying to a City Council for an ROS, the applicant should offer and build a record with sufficient and credible admissible evidence in support of the ROS. Here, the trial court correctly noted “[t]he four members who voted against the ROS did not state a reason for their vote that was related to site suitability or not complying with Burlington City’s local ordinances.” The trial judge also reasoned that “another cannabis applicant, Northern Alternatives, LLC” was issued an ROS at the third meeting and the application was similar to Higher Breed’s application. Additionally, the City Council had approved an ROS for “a medical cannabis establishment for LIFE Compassion Center Dispensary, LLC” at the property in 2021. The trial judge went on to explain that the record did not support the City Council’s decision, noting it was not based on “any substantiated evidence.”
I have successfully obtained ROSs for clients applying for Retail Cannabis Licenses before the CRC. If you require legal assistance with an ROS application, please feel free to contact me at afox@capehart.com.
