Letter to Hoboken Cannabis Review Board Regarding Story Dispensary
This letter was sent to the Hoboken Cannabis Review Board and City Council asking them to investigate the addition of a new LLC in the Story, Fulop/Nussbaum agreement.
Hoboken for Responsible Cannabis, Inc.
New Jersey Non-Profit Corporation
P.O. Box 3022
Hoboken, New Jersey 07030
November 16, 2022
Hoboken Cannabis Review Board
Michael Russo, Chair
Leo Pellegrini
Jason Freeman
Katie Morse
Robert Davis
Gary Weinstein
Ron Mondello, Esq.
RE: Story Dispensary (51-53 14th Street, Hoboken, NJ)
Hoboken Cannabis Review Board:
At the Hoboken Planning Board hearing for Story Dispensary on November 1, 2022, it was brought to the Planning Board’s attention and entered into the official record, that the principals involved in the proposed Story Dispensary have materially changed the business structure since the application was presented to the Cannabis Review Board on February 24th. When the Hoboken Planning Board deliberated over these facts, it was clear that the Planning Board attorney and board did not know how to proceed with this information and discussed whether they were able to send this back to the Hoboken Cannabis Review Board to be re-evaluated. The Planning Board determined that because the ownership change did not affect the conditional use issues before them, they were able to vote, and did so in favor of the applicant. The Cannabis Review Board needs to investigate this matter and the City Council should postpone a final vote until this issue is fully understood in order to avoid any City violations of the NJ State Cannabis Regulations, New Jersey State Ethics laws, and Hoboken Cannabis ordinance 196.33.1.
The Story Dispensary hearing on February 24, 2022, and the principals involved:
Story Dispensary of Hoboken, LLC: 60% female minority owner, - 26-year-old Samantha Silva, bartender at City Bistro who would be onsite, overseeing operations 3 days per week. 40% owner, Howard Hintz is described as the financial partner.
Dispensary Manager: Aaron Epstein, COO of CannTech, testified he is unaffiliated with the owners.
Dispensary Landlord: 51-53 14th Street Retail LLC, which is jointly owned by Drew Nussbaum and Jaclyn Fulop. The Fulop/Nussbaum LLC represented that they had an agreement with Story Dispensary to lease the commercial space at 51-53 14th Street. Ms. Fulop is the wife of the Mayor of Jersey City, Steve Fulop, and Drew Nussbaum is the Chairman and director of a political action committee called Coalition for Progress.
On April 7th, two months after the Cannabis Review Board hearing and shortly after submitting its application to the Hoboken Planning Board, the Fulop/Nussbaum LLC entered into a lease agreement with a new entity: NJRE 5153 14th LLC, a Wyoming LLC, owned by Jason Vedadi. Mr. Vedadi is the former Chairman of Harvest Health, a multi-state cannabis conglomerate and business colleague of Howard Hintz, who is the 40% owner of Story Dispensary. This lease includes three notable provisions:
The lease is back-dated to January 1, 2022.
Vedadi LLC has the option to buy the 51-53 14th Street property from Fulop/Nussbaum LLC for $1 million more than what Fulop/Nussbaum LLC initially paid a little more than a year ago. The timing of this buy-out option coincides with municipal and state licensing approvals.
Vedadi LLC intends to sublease the space to Story Dispensary of Hoboken LLC, an entity co-owned by Howard Hintz.
Why is this important to the City of Hoboken?
The applicant’s change in the business structure and the addition of another entity to that structure were never disclosed to the Hoboken CRB, Hudson County Planning Board, Hoboken Planning Board, City Council, or the public. The business structure change could effectively alter the controlling and operating entity which may have impacted the CRB’s decision to approve the application.
The applicant presented Story Dispensary of Hoboken LLC as a 60% female minority-owned business and the Hoboken CRB based its approval on that characterization. In addition, the state prioritizes licensing for dispensaries with minority and/or female ownership which might no longer be the case given this new structure.
A minority/woman-owned business or minority/woman-owned business enterprise is a business that meets the requirements at N.J.S.A. 52:27H-21.18 et seq., including, but not limited to, that: i. At least 51 percent of the ownership interest is held by persons who are minorities; and ii. The management and daily business operations are controlled by one or more of the minorities who own it.
At the February 24, 2022, CRB hearing, there was considerable concern and many reassurances that the Story Dispensary would not be a consumption lounge in the future and as a result, CRB wrote in its endorsement to the Planning Board that “Any future buyer will be put on notice” and no consumption lounge would be allowed in the 51-53 14th Street space, however, the Planning Board never considered a prohibition on a consumption lounge as an additional condition. The new Story Dispensary ownership raises the question of whether there are enough or any legally binding assurances that Story Dispensary LLC, NJRE 5153 14th Street LLC, 51-53 14th Street Retail LLC, or any other LLCs that come into this ownership structure will not open a consumption lounge in the future.
The buy-out provision in the new lease between the Fulop / Nussbaum LLC and the Vedadi LLC potentially violates NJ Cannabis regulations and state ethics laws.
Section 17:30-5.1 Municipal authority: (i) A county, municipality, or county or [municipality] municipal government official shall [not] neither solicit nor receive from a cannabis business, and a cannabis business shall not offer, anything of value, including a contribution to a political campaign, political party, or political organization as part of a host community agreement, or demand that any payment be made to a designated official, group, or organization in exchange for zoning approval, proof of local support, or written approval for such cannabis business, or take any other action that would violate N.J.S.A. 40A:9-22.5 of the Local Government Ethics Law.
N.J.S.A. 40A:9-22.5 of the Local Government Ethics Law. d. No local government officer or employee shall act in his official capacity in any matter where he, a member of his immediate family, or a business organization in which he has an interest, has a direct or indirect financial or personal involvement that might reasonably be expected to impair his objectivity or independence of judgment;
Furthermore, if the entity 51-53 14th Street Retail, LLC, is in violation of NJAC 1730 and Local Government Ethics Laws and Rules then it is in violation of Hoboken 196.33.1, Section b which states:
“Enabling authority. The requirements of this section are subject to the enabling authority of the State of New Jersey and are subject to compliance with all statutes and/or regulations adopted by the State of New Jersey or its instrumentalities. If any provision of this section is inconsistent with the statutes and/or regulations of the State of New Jersey, the state statutes and/or regulations shall govern.”
Story Dispensary appears to be a different business than what the Cannabis Review Board approved in February. There are more questions than answers. At best, Story’s lack of transparency is giving the appearance of malfeasance. At worst, Story is hiding its true intentions. Instead of a diversity-owned/managed small business, Hoboken is getting a nationally owned and operated cannabis business that intends to open a consumption lounge when the state and municipal laws allow. The Cannabis Review Board needs to investigate and reconsider this application with its new proposed structure and whether it violates local and NJ State Cannabis Regulations which could jeopardize the City’s standing with the NJ Cannabis Review Commission. Attached is a copy of the lease agreement.
Regards,
Hoboken for Responsible Cannabis, Inc.
cc: Hoboken City Council
