Advocating for Amending Township Code Chapter 54 - Cannabis | Ordinance 2021-9
What is Cultivation?
Indoor cannabis cultivation refers to the practice of growing cannabis plants in a controlled, indoor environment, such as a grow room or greenhouse. This method allows growers to manipulate and optimize factors such as light, temperature, humidity, and nutrients to create the ideal conditions for cannabis growth. Indoor cultivation is popular among commercial growers and hobbyists because it provides greater control over the growing environment and can produce high-quality yields year-round.
Facility Size Tiers
Tier | Canopy Size (sq. ft.) | Purpose |
|---|---|---|
Tier 1 | Up to 2,500 | Microbusinesses, small-scale operations. |
Tier 2 | 2,501 - 10,000 | Medium-sized cultivators, indoor/outdoor facilities. |
Tier 3 | 10,001 - 25,000 | Large-scale indoor or mixed-light growers. |
Tier 4 | 25,001 - 50,000 | Regional production hubs. |
Tier 5 | 50,001 - 75,000 | High-capacity cultivation for state-wide distribution. |
Tier 6 | 75,001 - 150,000 | Maximum size, large-scale industrial cultivation. |
Tax Revenue from Cultivation
In New Jersey, the empowers municipalities to impose local taxes on cannabis sales within their jurisdictions. Specifically, municipalities can enact ordinances to levy a on sales conducted by licensed cannabis establishments operating locally. The permissible tax rates are as follows:
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Up to 2% on sales by cannabis cultivators, manufacturers, and retailers.
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Up to 1% on sales by cannabis wholesalers.
Additionally, municipalities may implement a at equivalent rates on any concurrent license holder. This tax applies to the value of each transfer or use of cannabis or cannabis items not otherwise subject to the Local Transfer Tax, from the license holder’s establishment within the municipality to any of the license holder’s other establishments, regardless of their location.
The Data
Complete Financial Breakdown & comparison to Medford's 2024 Budget
Cannabis cultivation stands as Medford's second-largest revenue generator, with only local property taxes surpassing its contribution. Unlike property taxes, which place a direct financial burden on residents, cannabis cultivation provides a unique opportunity to alleviate that pressure. By leveraging revenue from this thriving industry, Medford can reduce the reliance on property taxes, easing the financial load on residents while still funding essential services and community initiatives.
Cultivators in New Jersey are authorized to sell their products to any licensed dispensary, wholesaler, or manufacturer statewide. Medford has the unique opportunity to implement local ordinances that allow it to collect up to 2% in revenue from the receipts of each sale. This means Medford stands to gain significant financial advantages through an economy of scale, as it reaps consistent tax revenues from cultivation products sold not just locally, but across the entire state.
Medford's 2024 Municipal Budget:
Total: $26 Million
Property Taxes: $15 Million
Miscellaneous Revenue: $6.7 Million
Surplus Revenue: $3 Million
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Single Cultivation Facility in Winslow Township
Facility Size: 123,000 sq ft
2023 Tax Revenue Collected: $500k
2024 Tax Revenue Collected: $868k
2025 Tax Revenue: Likely to be over $1 Million
The tax revenues collected by Winslow Township represent that of just one cannabis cultivator operating a facility 27,000 sqft less than the maximum size permitted by New Jersey (150,000 sq ft). If Medford sought to work with cultivators instead of putting up road blocks, our township could be collecting revenues anywhere between $500k - $3 Million annually. Think of what we could accomplish with those funds!