The measure, introduced Thursday night, would prohibit businesses engaged in the growth or sale of medical or recreational marijuana from setting up in town or on Fort Monmouth, a former U.S. Army base.
The measure extends to the sale of paraphernalia connected to marijuana.
The ban would not prohibit residents from possessing medical marijuana or legal recreational marijuana.
Mayor Jay Coffey said he believed the council was acting prematurely on the issue.
"The state of New Jersey hasn't passed anything yet. I think you wait to see what the state does and then you react, but some towns are taking a preemptive strike on it," said Coffey, who will not vote on the measure unless the six-member council is tied.