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A New Jersey appeals court has ruled in favor of Blue Violets LLC, permitting its Hoboken marijuana dispensary to operate, despite a local ordinance that was passed after the company had submitted its application. The three-judge panel issued its opinion on Monday, overturning a lower court’s decision that had blocked the dispensary’s operation.

The appeals court determined that the Hoboken Planning Board and the Cannabis Review Board (CRB) had appropriately based their decision on the law in effect when Blue Violets submitted its conditional use application in February 2022, rather than the ordinance passed later in April 2022. This ordinance prohibited dispensaries from operating within 600 feet of a school, but the panel found that the dispensary’s application complied with the existing law at the time.

The conflict arose when Hoboken for Responsible Cannabis (HRC) sued Blue Violets in October 2022, arguing that the approval of the dispensary was improper because it had been based on the earlier law. The organization contended that the April ordinance should have applied, as it was enacted before Blue Violets' dispensary began operations. Additionally, Hoboken resident Elizabeth Urtecho joined the lawsuit, presenting the same objections.

In September 2023, the trial court sided with the plaintiffs, ruling that the CRB had not acted as the planning board, and therefore Blue Violets' application did not meet the requirements of the Municipal Land Use Law, which governs the application process. As a result, the court ruled that the application was incomplete, and the time of application rule should not apply.

However, in Monday’s opinion, the appeals panel disagreed with the lower court’s findings, particularly regarding the standing of HRC and Urtecho to challenge the dispensary’s approval. The judges concluded that both HRC and Urtecho, as residents of Hoboken, were properly recognized as interested parties with the standing to challenge the planning board's decision.

On the core issue of the application’s compliance with the law, the panel supported Blue Violets, affirming that the dispensary’s application was deemed complete by the CRB in February 2022, before the ordinance was passed. The court emphasized that the CRB, as an arm of the planning board, held the responsibility for reviewing cannabis applications before they reached the planning board, and that the time of application rule was intended to prevent municipalities from changing the law mid-application.

The rule, which has been in place to protect developers from having their applications blocked by subsequent legal changes, was a crucial factor in this case. The panel pointed out that Blue Violets had already invested over $69,000 in the application process by the time the ordinance was passed. As a result, the court concluded that the application was not subject to the new law, reinforcing the city’s decision to approve it.

The ruling underscores the importance of the time of application rule, which ensures that the legal environment at the time of application, rather than subsequent changes, governs the approval process. Blue Violets LLC’s victory clears the path for the dispensary to continue operating, while the plaintiffs’ request for a halt to the operation was denied.

Representatives for the parties involved did not provide immediate comments following the ruling. The case, which has significant implications for cannabis regulation in Hoboken, is titled Hoboken for Responsible Cannabis Inc. et al. v. City of Hoboken Planning Board et al. and is being heard in the Superior Court of New Jersey, Appellate Division under case number A-0556-23.

Blue Violets is represented by Michael C. Klauder from Cole Schotz PC, while HRC and Urtecho are represented by Daniel L. Steinhagen of Beattie Padovano LLC. The City of Hoboken Planning Board’s legal team includes Richard Brigliadoro and Glenn C. Kienz of Weiner Law Group LLP.