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Casinos + Cannabis perfect together?
Atlantic City is taking a leap of faith and gambling on weed to boost tourism and become an East Coast convention mecca.
But since casinos are federally regulated and under the federal ban on weed, cannabis businesses cannot be located in any of the nine gambling halls. So the city is looking outside the casinos, primarily along Atlantic and Pacific Avenues, to adding weed to diversify its economy.
At least two big cannabis operators — iAnthus and Acreage — are already selling medicinal marijuana in Atlantic City and both are eyeing a piece of the adult weed business. A smaller cannabis business just received a micro dispensary license to operate just behind Boardwalk Hall.
iAnthus — which acquired MPX NJ earlier this year and opened a medical marijuana dispensary in Atlantic City on May 5 — wants to expand to sell to the adult market there real soon, NJ Advance Media has learned. So does The Botanist, which sells medical weed on the Boardwalk, and is owned by Acreage.
iAnthus is set to appear before the Atlantic City City Council on Wednesday to make its pitch to add adult weed sales at its facility, according to the Council’s meeting agenda posted Friday.
“Our commitment is to improve the overall health of Atlantic City. And when we talk about `health,’ we are referring to physical and to mental health, for sure – through the benefits of the cannabis plant,” said iAnthus spokesman Ethan Anderson in emails to Cannabis Insider confirming the company’s goals.
“We are also talking about the economic health of Atlantic City, and we see the eventual expansion into adult use to be most impactful to the City’s economic well-being.”
Anderson ticked off what Atlantic City has going for it: More than 20 million tourists visit each year; host to a full-time population of almost 38,000 people; nine casinos with 17,000 hotel rooms; an iconic Boardwalk.
The MPX NJ site on 157 South New York Avenue opened its doors to medical patients on May 5, two weeks after New Jersey made the historic leap into legalizing adult recreational marijuana.
“We are excited to be in a position to eventually expand into the recreational-use market,” said Anderson. “We are creating good jobs, generating local tax revenue, and engaging with established community organizations.”
Anderson said Wednesday’s Council appearance is to seek a resolution from City Council, or letter of support, for its expansion application.
Kashawn McKinley, Atlantic City’s Director of Constituent Services and Special Projects under Mayor Marty Small Sr., confirmed the two sides were working together to bring adult weed sales to the seaside gambling town.
“(iAnthus) is seeking a community host agreement to ensure their goals align with the city’s,” said McKinley during an interview with N.J. Advance Media at Atlantic City City Hall last week.
The state Cannabis Regulatory Commission gave approval April 11 to seven medical dispensaries, also known as alternative treatment centers, to expand into adult recreational weed sales. Adult sales started on April 21, including at The Botanist at 100 Century Drive in Egg Harbor Township.
McKinley said iAnthus’s entre into adult recreational weed ties in with Mayor Small’s vision of making Atlantic City the “Convention Capital of the East Coast.”
“We are unique because we are the only city in New Jersey with casinos,” said McKinley. “We have a booming tourist industry so why not utilize this as a springboard and bring this new industry on and make it connect holistically with the entire Atlantic City. That’s what we’re trying to do.
“We want the cannabis industry to come in … and together we rise,” he added.
But it’s a tricky situation because the options of where to locate cannabis businesses in Atlantic City are limited since casinos are federally regulated. The city is home to owners with properties nationally and globally who must comply with the federal ban on cannabis and cannot host any weed businesses.
The same applies to Tanger Outlets Atlantic City, the outdoor mall that occupies several blocks downtown, and the Sheraton Atlantic City Convention Center Hotel. Both have owners who are multi-state operators who follow federal law.
But in its favor, Atlantic City is an impact zone – which under the new state cannabis law gets priority for certain cannabis licenses as well as resources and funding from the Cannabis Regulatory Commission.
The city is accepting six cannabis licenses. The state has opened up applications for four of the six. But there is no cap on micro licenses like the one Sonraj LLC just won to convert a long abandoned property along Pacific Avenue behind Boardwalk Hall.
Alternative treatment centers, or medical dispensaries, like iAnthus and Acreage — which owns The Botanist site at 1301 Boardwalk — can grow and sell their marijuana (called vertically integrated enterprises in the industry).
“Casinos and cannabis go hand in hand,” said McKinley, 38, who was born and raised in Atlantic City and lives three blocks from Mayor Small. “With Black and brown communities and the minorities (who live) here, the stats show high incarceration rates, (many) single parent households, low education, high low income renters. This is an opportunity where we have a new tax revenue stream and we want to utilize that.”
McKinley sees the spread of legalized marijuana in much the same way that gambling exploded nationally over the past decade and a half, and why his city has to get into the game quickly.
“Atlantic City is three hours away from 50 million people,” McKinley said. “We have a beautiful beach and boardwalk. We have some things you just can’t get anywhere else. We just want to maximize on what we already have.
“We’re putting together an experience. We don’t want you to just come in and buy your cannabis and drive back home. We want you to consume it here in a safe environment,” said McKinley. “That’s why a lot of people are saying they want the consumption lounges.
“We also want the ancillary things … the museums, the cannabis tours, just anything you can think of involving cannabis. We want to be sure we’re prepared and plan … to make this the best cannabis destination.”
iAnthus is looking to transition to adult recreational weed sales within the next six months, according to McKinley.
If iAnthus receives City Council support, the operator would then go before the Casino Reinvestment Development Authority for a use variance. The CRDA regulates zoning in the city’s Tourism District where iAnthus’s medical dispensary is located.
In an appearance before the CRC on Feb. 24, McKinley touted cannabis to boost Atlantic City.
“Cannabis is an entirely new industry that will be driven by conventions,” McKinley told the CRC board. “Atlantic City needs special provisions to capitalize on this marketplace. Standalone consumption lounges – both indoor and outdoor – are needed. … Places like Boardwalk Hall, the Convention Center and Bader Field should be permitted to host large cannabis conventions.”
McKinley said iAnthus will have the option to add a consumption lounge at the 157 South New York Avenue site if approved to expand into the adult recreational market.
iAnthus said it’s on board.
“We’re fully committed to doing our part to support Atlantic City’s evolution to becoming the leading cannabis hub on the East Coast,” Anderson said. “We operate in many municipalities across the country, and we are impressed by how thoughtful this local group of leaders is and … committed to the best outcomes for Atlantic City. The Commission really sees the opportunity that cannabis represents for its constituents, and we are aligned with them on that vision.”
Others are also scoping out the seaside resort for adult weed sales.
On April 19, an old pawnshop at 2415 Pacific Avenue owned by Sonraj LLC got zoning approval from the CRDA to became Atlantic City’s first legal retail cannabis shop.
Sonraj plans to open a class 5 micro dispensary — to be called The Healing Side — on what has long been a vacant property that sits directly behind Boardwalk Hall.
The Botanist’s existing 1301 Boardwalk shop will continue to be medical only as City Council prohibited cannabis retail sales on the Boardwalk last year to keep it family friendly. Undeterred, The Botanist is looking at alternative sites within the city to sell adult weed.
“While The Botanist in Atlantic City has the capacity and desire to sell adult-use cannabis, the city has restricted our ability to make adult-use sales at our current location,” said Sharon Ali, Regional General Manager, Mid-Atlantic for Acreage in an email to Cannabis Insider last week.
“Nevertheless, The Botanist desires to remain in Atlantic City to continue serving our medical patients and is currently searching for alternative options to help get the adult-use market started,” said Ali.
iAnthus has made significant construction progress at its cultivation and manufacturing facility in Pleasantville, and Anderson said it will have an official ribbon cutting for its new Atlantic City medical marijuana dispensary on South New York Avenue on May 25.
“We’re committed, and confident we can continue, to providing patients access to medical cannabis and generating tax revenue for the good of the public,” he said. “We’re hopeful that we will obtain support and approval to commence recreational-use sales in the future.”
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Suzette Parmley may be reached at firstname.lastname@example.org or follow her on Twitter: @SuzParmley