9.f1 City Attorney Memo - Cannabis Hemp and THC Interim Ordinances - Scandia (July 12 2023)ECKBERG LAMMERS MEMORANDUM
To: Scandia City Council
From: Eric D. Larson, City Attorney
Date: July 14, 2023
Re: Cannabis Business Regulation
This Memorandum provides a summary background of the adult-use cannabis legislation followed
by a series of proposals for the City of Scandia to consider:
1. Recommendation that the City adopt a code prohibiting anyone from using cannabis
flower, cannabis products, lower-potency hemp edibles, or hemp-derived consumer
products in a public place. Exhibit C – Ordinance Prohibiting Cannabis Consumer
Product Use in Public Spaces (Draft Ordinance 2023-06).
The bases for this recommendation is to ensure that use of cannabis is prohibited in
public spaces, similarly to the prohibition of tobacco and liquor in public buildings or
public spaces.
2. Recommendation that on July 18, 2023, the City adopt Interim Moratorium Ordinance
regarding Hemp and Cannabis businesses to provide time to undertake a zoning study
and receive information and guidance from the newly created Office of Cannabis
Management. Exhibit D – Interim Ordinance Prohibiting the Establishment of
New Uses Related to the Operation of Cannabis Businesses and Hemp Businesses
(Draft Ordinance No. 2023-07).
The Cannabis Legislation authorizing a municipal moratorium does not take effect until
August 1, 2023, and there is an argument that the moratorium power under the new law
applies to cannabis only and does not extend to hemp. This moratorium would be
enacted under existing law, specifically, Minnesota statutes section 462.355, apply to
both hemp and cannabis and provide the City of Scandia to undertake a zoning study
and receive information and guidance from the newly created Office of Cannabis
Management.
3. Recommendation that on August 15, 2023, the City hold a public hearing and
thereafter adopt an Interim Moratorium Ordinance regarding Hemp and Cannabis
businesses to provide time to undertake a zoning study and receive information and
guidance from the newly created Office of Cannabis Management. This interim
moratorium ordinance would be enacted as authorized by the Cannabis legislation,
specifically Minnesota Statutes section 342.13, subd. 3, which takes effect on August
1, 2023. Exhibit E – Interim Ordinance Prohibiting the Establishment of New
Uses Related to the Operation of Cannabis Businesses.
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CANNABIS LAW GENERALLY
This legislative session Minnesota adopted a new law legalizing adult-use cannabis. Along with
legalizing adult use cannabis, the Legislature adopted a series of laws creating various licensing
schemes for cannabis businesses and hemp businesses, creating the Office of Cannabis
Management to regulate the cannabis and hemp industry, and, importantly for Minnesota cities,
setting forth options for local control by cities.
On August 1, 2023, the use of recreational cannabis by adults is legal, but the sale of cannabis,
cannabis products, and lower-potency hemp edibles is not legal until the Office of Cannabis
Management begins issuing cannabis business and hemp business licenses. The Legislature did
not identify a date when the Office of Cannabis Management will begin accepting, processing, and
granting applications for cannabis businesses and hemp businesses.
Theoretically, the Office of Cannabis Management has the authority to begin issuing licenses as
soon as August 1, 2023. It seems generally understood that it will be a year or more before the
Office of Cannabis Management begins issuing licenses. Presently, however, when cannabis
businesses and hemp businesses may begin lawful operation in Minnesota cannot be exactly
predicted.
The Office of Cannabis Management must consult with a city prior to issuing a license for a
cannabis business or hemp business operation to ensure the business complies with the City’s
zoning code. Once the Office of Cannabis Management issues a license for a cannabis business or
hemp business, a city must issue a registration to the licensee for operation in their city unless the
city has provided consent for the county to issue registrations for their jurisdiction.
All that being said, edible cannabinoid products, which were made legal in the 2022 Legislative
Session, continue to be legal to sell through March 1, 2025. However, once the Office of Cannabis
Management begins issuing lower-potency hemp edible licenses, cities would no longer have
licensing power over edible cannabinoid products and must begin registering retailers through the
city’s cannabis retailer registration process.
There is a minor difference between lower-potency hemp edibles, which cannot be sold until a
license is obtained from the Office of Cannabis Management, and edible cannabinoid products,
which can be sold now (see Exhibit A – Difference between Lower-Potency Hemp Edible
Products & Edible Cannabinoid Products). An edible cannabinoid product contains a
cannabinoid but a lower-potency hemp edible can contain hemp concentrate or cannabinoids. Also,
lower-potency hemp edibles can contain a higher amount of cannabidiol, cannabigerol, or any
combination of those with THC.
Importantly, a city continues to possess zoning and land use controls through which the city may
regulate a cannabis business’ location and the number of cannabis businesses in the city (see
Exhibit B – Statutory Regulations for Sales of Edible Cannabinoid Products, Hemp
Businesses, & Cannabis Businesses). A city must allow at least one cannabis business registration
for every 12,500 residents; if a county has one active registration for every 12,500 residents, then
a city is not obligated to register a cannabis business. And a city may also permit more than the
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minimum permitted by state law. Cities may prohibit the operations of a cannabis business within
1,000 feet of a school, 500 feet of a daycare, residential treatment facility, or an attraction within
a public park that is regularly used by minors, including a playground or athletic field.
In short, cities have the option to prohibit use of cannabis products in public places, restrict the
hours of cannabis businesses, limit the number of cannabis businesses, place reasonable time,
place, and manner restrictions for cannabis businesses, and finally prohibit cannabis businesses
with an interim ordinance through January 1, 2025. Cities also have the option to regulate and
restrict hemp businesses with their traditional regulatory authority. Cities do not have the option
to prohibit cannabis use in their city; and they do not have the option to prohibit cannabis
businesses in the city beyond January 1, 2025. And cities may themselves operate a municipal
cannabis store.
In summary, the use and possession of cannabis is lawful as of August 1, 2023, but currently, no
business is authorized to sell cannabis. And regulation, licensing, and local zoning controls for
both hemp and cannabis remain to be developed. How regulation of hemp and cannabis will
impact edible cannabis remains to be determined. As a result, here are the following options and
recommendations for the Scandia City Council to consider.
RECOMMENDATIONS – CANNABIS AND HEMP
Many unknowns remain as to the methods towns, cities, counties, and the State will use to regulate
this new cannabis and hemp industry for the State of Minnesota. Interim moratorium ordinances
provide cities the best option to study, learn, and make informed decisions as to how best manage
this new industry in a manner that best fits their city and maintain a city’s legal rights to regulate
accordingly. Therefore, the Scandia City Attorney makes the following recommendations:
1. Public Use Prohibition. City of Scandia adopt an ordinance prohibiting the use of
cannabis flower, cannabis products, lower-potency hemp edibles, and hemp-derived
consumer products in public places. Scandia’s current code prohibiting public use of liquor
or tobacco products may apply to cannabis products. But to ensure that such a prohibition
is clear, law enforcement in many cities has requested such an ordinance be adopted. This
ordinance would permit law enforcement in the City of Scandia to charge individuals using
such products in public places with a petty misdemeanor. While the City of Scandia cannot
prohibit the use of such products at a private residence, private property where the owner
permits the use, or the premises of an establishment or event licensed to permit on -site
consumption, the City can prohibit it just about everywhere else with this ordinance.
2. Hemp and Cannabis Moratorium. On July 18, 2023, the City of Scandia adopt an interim
ordinance prohibiting the operation of hemp businesses for a period of one year and would
include a moratorium on Cannabis, which remain in effect until the Cannabis and Hemp
Moratorium recommended below is enacted. The legislature did not allow cities to prohibit
the operation of hemp businesses with an interim ordinance through 2025. This means
cities may only adopt an interim ordinance for one year. Adopting interim ordinances will
give the City time to adopt or amend official controls for cannabis businesses and hemp
businesses prior to the Office of Cannabis Management approving licenses in the City.
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3. Cannabis and Hemp Moratorium. On August 15, 2023, the City of Scandia conduct a
public hearing and adopt an interim ordinance prohibiting the operation of cannabis and
hemp businesses thru January 1, 2025. This interim moratorium ordinance would be
enacted as authorized by the Cannabis legislation. To the extent the Cannabis legislation
permits the moratorium to extend to hemp, this moratorium would apply to hemp as well.
The interim moratorium ordinance will give the City time to adopt or amend official
controls for cannabis businesses and hemp businesses prior to the Office of Cannabis
Management approving licenses in the City.
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EXHIBIT A
DIFFERENCE BETWEEN LOWER-POTENCY HEMP EDIBLE PRODUCTS
&
EDIBLE CANNABINOID PRODUCTS
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EXHIBIT B
STATUTORY REGULATIONS FOR: SALES OF EDIBLE CANNABINOID
PRODUCTS, HEMP BUSINESSES, & CANNABIS BUSINESSES
Types Edible Cannabinoid
Products
Lower-Potency Hemp Edibles Cannabis Products
Display/
Storage
Every person selling
edible cannabinoid
products to consumers,
other than products that
are intended to be
consumed as a beverage,
must ensure that all
edible cannabinoid
products are displayed
behind a checkout
counter where the public
is not permitted or in a
locked case.
A lower-potency hemp edible
retailer shall ensure that all
lower-potency hemp edibles,
other than lower-potency hemp
edibles that are intended to be
consumed as a beverage, are
displayed behind a checkout
counter where the public is not
permitted or in a locked case.
All lower-potency hemp edibles
that are not displayed must be
stored in a secure area.
Retail area may have
samples and cannabis
products available for sale
displayed (one of each
type). The products must
be stored in the secure
storage area.
Age
Verification
Prior to sale employee
must verify
Prior to sale employee must
verify
Prior to sale employee
must verify
Liquor
License
Permissions
On-site consumption
permitted for
establishments with on-
sale licenses. Exclusive
Liquor Stores may sell.
Exclusive liquor stores may sell.
Prohibit Silent Silent No – 342.13(b)
Zoning Silent Silent Reasonable time, place,
manner restrictions.
Option to prohibit 1,000
feet from a school; 500
feet of day care,
residential treatment
facility, attraction w/in a
public park regularly used
by minors
Interim
Ordinance
Silent Silent Regulate, restrict, or
prohibit until Jan. 1, 2025
Number of
Businesses
Silent Silent 1/12,500 residents
Employee
Age
Silent Silent Must be 21+
Age to enter Silent Silent 21+
Hours Silent Silent Closed from 2AM – 8AM
Mon-Sat. 2AM-10AM
Sunday. City may further
restrict to sales from 9PM
-2AM or 8AM-10AM.
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EXHIBIT C
DRAFT
CITY OF SCANDIA
WASHINGTON COUNTY, MINNESOTA
ORDINANCE NO. 2023-06
AN ORDINANCE OF THE CITY OF SCANDIA, WASHINGTON COUNTY,
MINNESOTA, ADDING TITLE XII, USE OF CANNABIS FLOWER, CANNABIS
PRODUCTS, LOWER-POTENCY HEMP EDIBLES OR HEMP-DERIVED
CONSUMER PRODUCTS IN PUBLIC PLACES.
THE CITY COUNCIL OF THE CITY OF SCANDIA, WASHINGTON COUNTY,
MINNESOTA DOES ORDAIN:
That TITLE XII, Use of Cannabis Flower, Cannabis Products, Lower-Potency Hemp Edibles or
Hemp-Derived Consumer Products in Public Places, is hereby added to the City of Scandia,
Minnesota Code of Ordinances.
Title XII, Use of Cannabis Flower, Cannabis Products, Lower-Potency Hemp Edibles or Hemp-
Derived Consumer Products in Public Places
Sec. 120.01. Purpose.
The purpose of this ordinance provides for the good order of the City, the suppression of vice and
immorality, the prevention of crime, the protection of public property, and to promote the health,
safety, order, convenience, and general welfare of the residents of the City of Scandia.
Sec. 120.02. Definitions.
Public Place. Any place excluding the following:
(1) A private residence, including a person’s curtilage or yard;
(2) Private property not generally accessible by the public unless the person is
explicitly prohibited from consuming cannabis flower, cannabis products,
lower-potency hemp edibles, or hemp-derived consumer products on the
property by the owner of the property; or
(3) The premises of an establishment or event licensed to permit on-site
consumption.
Sec. 120.03. Prohibited Activity.
No person shall use cannabis flower, cannabis products, lower-potency hemp edibles, or hemp-
derived consumer products in a public place.
Sec. 120.04. Violation.
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Any person who engages in the use of cannabis flower, cannabis products, lower-potency hemp
edibles, or hemp-derived consumer products in a public place is guilty of a petty misdemeanor.
Effective Date.
This ordinance shall take effect from and after its passage and publication as required by law.
Passed and adopted by the City Council of the City of Scandia, Washington County, Minnesota,
this __ day of ___, 2023.
Christine Maefsky, Mayor
Attest:
(SEAL)
Kyle Morell, City Administrator
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EXHIBIT D
DRAFT
CITY OF SCANDIA
WASHINGTON COUNTY, MINNESOTA
ORDINANCE NO. 2023-07
AN INTERIM ORDINANCE OF THE CITY OF SCANDIA, WASHINGTON COUNTY,
MINNESOTA, PROHIBITING THE ESTABLISHMENT OF NEW USES RELATED TO
THE OPERATION OF CANNABIS BUSINESSES AND HEMP BUSINESSES FOR ONE
YEAR UNDER MINNESOTA STATUTE 462.355 SUBDIVISION 4.
THE CITY COUNCIL OF THE CITY OF SCANDIA, WASHINGTON COUNTY,
MINNESOTA DOES ORDAIN:
Section 1. The purpose of this interim ordinance is to protect the planning process and the
health, safety, and welfare of the City of Scandia for the following reasons:
(1) The State of Minnesota established the Office of Cannabis Management,
tasked with issuing licenses for the operation of cannabis businesses and
hemp businesses in Chapter 63 of Minnesota Session Law – 2023,
Regular Session.
(2) Chapter 63 of Minnesota Session Law – 2023, Regular Session does not
include a date for the Office of Cannabis Management to begin issuing
licenses to cannabis businesses and hemp businesses.
(3) The City of Scandia does not currently permit or regulate the uses of
Cannabis Business or Hemp Business.
Section 2. Pursuant to Minnesota Statutes, Section 462.355, subdivision 4, City Staff is
directed to conduct a study to gather information and make a recommendation to the Council to
determine if the City of Scandia official controls as defined in Minn. Stat. §462.352, subd. 15.
need to be amended regarding the uses related to the operation of cannabis businesses and hemp
businesses, and if so, what regulations are appropriate.
Section 3. Pursuant to Minnesota Statutes, Section 462.355, subdivision 4, no business,
person, or entity may establish a cannabis business or hemp business for a period of up to twelve
(12) months from the effective date of this ordinance or until the ordinance regulating such uses
become effective or until the Council rescinds this Interim Ordinance, whichever occurs first.
Section 4. This interim ordinance shall be in full force and effect from and after its passage
and publication according to law.
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Passed and adopted by the City Council of the City of Scandia, Washington County, Minnesota,
this __ day of ___, 2023.
__________________________
Christine Maefsky
Mayor
Attest:
(Seal)
_________________________
Kyle Morell
City Administrator
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EXHIBIT E
DRAFT
CITY OF SCANDIA
WASHINGTON COUNTY, MINNESOTA
ORDINANCE NO. TO BE DETERMINED
AN INTERIM ORDINANCE OF THE CITY OF SCANDIA, WASHINGTON COUNTY
MINNESOTA, PROHIBITING THE OPERATION OF CANNABIS BUSINESSES IN
THE CITY UNDER MINNESOTA STATUTE 342.13 (e)
THE CITY COUNCIL OF THE CITY OF SCANDIA, WASHINGTON COUNTY,
MINNESOTA DOES ORDAIN:
Section 1. The purpose of this interim ordinance is to protect the planning process and the
health, safety, and welfare of its citizens by prohibiting the operation of a cannabis business within
the jurisdiction of the City of Scandia until January 1, 2025, and to provide for adequate time for
study, analysis, and finalization of City Code amendments regarding time, place, and manner of
the operation of a cannabis business within the City.
Section 2. Pursuant to Minnesota Statutes, Section 342.13(e), an interim ordinance is hereby
adopted authorizing the City to conduct a study regarding the impacts of cannabis businesses and
uses to determine whether and what revisions to the Scandia City Code of Ordinances or other
regulations on the time, place, and manner of cannabis business operations are warranted for the
purpose of protecting the planning process and the health, safety, and welfare of the citizens of
Scandia.
Section 3. Pursuant to Minnesota Statutes, Section 342.13(e), subdivision 4, the operation of
cannabis businesses in the City of Scandia is prohibited.
Section 4. This interim ordinance shall be in full force and effect from and after its passage
and publication according to law until January 1, 2025.
Section 5. Violation of any portion of this ordinance shall be a misdemeanor punishable by
imprisonment for up to 90 days and a fine of $1,000.00 or both, plus the costs of prosecution. Each
day that a violation occurs shall be considered a separate offense. The City may enforce any
provision of this ordinance by mandamus, injunction, or any other appropriate civil remedy in any
court of competent jurisdiction.
Passed and adopted by the City Council of the City of Scandia, Washington County, Minnesota,
this __ day of ___, 2023.
__________________________
Christine Maefsky
Mayor
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Attest:
(Seal)
_________________________
Kyle Morell
City Administrator