Atlantic City gambles on N.J. legal weed to boost tourism and draw conventions

EDITOR’S NOTE: NJ Cannabis InsiderThe Asbury in Asbury Park is hosting an in-person event for business networking July 14th Tickets are very limited.

Perfect combination of casinos and cannabis?

Atlantic City is making a bold move and gambling on marijuana to boost tourism and make it a convention mecca on the East Coast.

Because casinos are federally licensed and prohibited from selling weed, they cannot be found in any of the nine gaming halls. The city is now looking beyond the casinos to add weed to diversify its economy, primarily along Atlantic Avenue and Pacific Avenues.

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 micro dispensary license was just granted to a smaller cannabis business, 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. Acreage also owns The Botanist which sells medical marijuana along the Boardwalk.

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 outlined the many things Atlantic City has going on: It hosts more than 20 million tourists each year; it is home to a full-time population close to 38,000 people; nine casinos that have 17,000 rooms; and an iconic Boardwalk.

The MPX NJ facility at 157 South New York Avenue opened its doors for medical patients on May 5, just two weeks after New Jersey legalized adult recreational cannabis.

“We are excited to be in a position to eventually expand into the recreational-use market,”Anderson said. “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,”McKinley speaking to N.J. Advance Media last week at Atlantic City City Hall.

iAnthus is an alternative treatment center that acquired MPX NJ in order to open a medical weed dispensary at Atlantic City on May 5, 2022. It hopes to soon start selling adult recreational marijuana at the shop at 157 South New York Avenue.

April 11th, seven medical dispensaries also known as alternative treatment centers were approved by the state Cannabis Regulatory Commission for adult recreational weed sales. Adult sales began April 21, at The Botanist at 100 Century Drive 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,”McKinley said. “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 concluded.

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. Owners with properties across the country and internationally must adhere to the federal ban on cannabis. They cannot host weed businesses in the city.

The same applies to Tanger Outlets Atlantic City which occupies several blocks downtown and the Sheraton Atlantic City Convention Center Hotel. Both have owners that are multi-state and 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.

Six cannabis licenses will be granted to the city. Four of the six licenses have been opened to applicants by the state. There is no limit on micro licenses, such as the one Sonraj LLC won to convert an abandoned property along Pacific Avenue near 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,”McKinley (38), was born and raised Atlantic City, and lives just 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 legalized marijuana spreading in the same manner as gambling. His city needs to get on board 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,”McKinley said. “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.”

Kashawn McKinley

Kashawn McKinley (Director Constituent Services), pictured last Wednesday at Atlantic City City Hall. He said that his city is actively looking for cannabis businesses.

McKinley says that iAnthus intends to make the transition to adult recreational marijuana sales within six months.

If iAnthus gets support from the City Council, the operator would be allowed to apply for a variance of use at the Casino Reinvestment Development Authority. The CRDA regulates zoning in the city’s Tourism District where iAnthus’s medical dispensary is located.

McKinley spoke out about cannabis’ potential to boost Atlantic City in a speech before the CRC on February 24,

“Cannabis is an entirely new industry that will be driven by conventions,”McKinley informed 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 stated that iAnthus has the option to add a lounge to the 157 South New York Avenue location if it is approved to expand into adult recreational markets.

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 looking at the seaside resort as a potential location 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. The Botanist is not discouraged and is exploring other locations within the city to sell adult cannabis.

“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,”Sharon Ali, Regional General Manager Mid-Atlantic for Acreage, wrote this email to Cannabis Insider last Wednesday.

“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,”Ali.

iAnthus made significant construction progress at Pleasantville’s cultivation and manufacturing facility. Anderson announced that it will hold a ribbon cutting ceremony for its Atlantic City medical cannabis dispensary at South New York Avenue in 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 [email protected] or follow her on Twitter: @SuzParmley

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