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02. Draft Cannabis Language Staff Report Date of Meeting: October 2, 2024 For: Honorable Mayor and Council From: Kyle Morell, City Administrator Subject: Draft Cannabis Language Background: At our Special Meeting on July 24, the Council viewed a presentation by Christina Benson from Eckberg & Lammers about the new cannabis and hemp rules and regulations. We discussed using the Office of Cannabis Management to help draft the needed additions to the City Code and using some of our existing zoning language to help make changes to our allowed uses section of the Unified Development Code. At our September 4 Council Work Session, staff presented draft UDC and model ordinance language. The UDC language includes additions to sections 153.600 Master Glossary and 153.300 Allowed Uses. The model ordinance language likely becomes Chapter 115 of the City Code. The council discussed licensing limits within Scandia and whether or not to impose restrictions on where cannabis businesses can operate based on the location of schools, daycares, churches, and parks. The council expressed a desire to treat cannabis and hemp businesses similarly to the restrictions around alcohol and tobacco in terms of licenses allowed and restrictions on business locations. The following items still require Council attention:  Section 2.6 Limiting of Registrations – The City is required to allow one license within City limits. The license only applies to cannabis microbusinesses, mezzobusinesses, and retailers. Cultivating businesses do not fall under this license. The limit is not one license for each, but one license total between the three businesses. Or the City can choose not to limit the number of licenses, letting the market decide how many businesses can survive in Scandia.  Section 5.2.1 Age Requirements – This section limits the sale of low-potency hemp to places that only allow persons 21 years of age and older. This would be more restrictive than the sale of tobacco and liquor, as persons under 21 are allowed to enter establishments that sell liquor and tobacco. Staff does not recommend keeping this provision. Staff is happy to answer any questions you might have during the Work Session. Further discussion will occur at our October 15 Regular Meeting, when our City Attorney and City Planner will be present. A public hearing is needed and should be scheduled for Wednesday, November 6, at the work session at 6:30 p.m. Approval of the ordinance language at the public hearing would allow for publication before the expiration of our cannabis and hemp moratoriums. Attachments: Draft Cannabis Ordinance Draft Cannabis Uses Language Cannabis Model Ordinance Section 1 Administration Section 2 Registration of Cannabis Business Section 3 Temporary Cannabis Events Section 4 Lower Potency Hemp Edibles AN ORDINANCE OF THE CITY OF SCANDIA TO REGULATE CANNABIS BUSINESSES The City Council of Scandia hereby ordains: Section 1. Administration 1.1 Findings and Purpose The City of Scandia makes the following legislative findings: The purpose of this ordinance is to implement the provisions of Minnesota Statutes, chapter 342, which authorizes the City of Scandia to protect the public health, safety, welfare of City residents by regulating cannabis businesses within the legal boundaries of Scandia The City of Scandia finds and concludes that the proposed provisions are appropriate and lawful land use regulations for Scandia that the proposed amendments will promote the community's interest in reasonable stability in zoning for now and in the future, and that the proposed provisions are in the public interest and for the public good. 1.2 Authority & Jurisdiction The City of Scandia has the authority to adopt this ordinance pursuant to: a) Minn. Stat. 342.13(c), regarding the authority of a local unit of government to adopt reasonable restrictions of the time, place, and manner of the operation of cannabis businesses and hemp businesses. b) Minn. Stat. 342.22, regarding the local registration and enforcement requirements of state- licensed cannabis microbusinesses, cannabis mezzobusinesses, cannabis retailers, medical cannabis combination businesses, or lower-potency hemp edible retailers. c) Minn. Stat. 152.0263, Subd. 5, regarding the use of cannabis in public places. d) Minn. Stat. 462.357, regarding the authority of a local authority to adopt zoning ordinances. Ordinance shall be applicable to the legal boundaries of Scandia 1.3 Severability If any section, clause, provision, or portion of this ordinance is adjudged unconstitutional or invalid by a court of competent jurisdiction, the remainder of this ordinance shall not be affected thereby. 1.4 Enforcement The City Administrator is responsible for the administration and enforcement of this ordinance. Any violation of the provisions of this ordinance or failure to comply with any of its requirements constitutes a misdemeanor and is punishable as defined by law. Section 2. Registration of Cannabis Businesses 2.1 Consent to registering of Cannabis Businesses No individual or entity may operate a cannabis microbusiness, cannabis mezzobusiness, cannabis retailer business, medical cannabis combination business, or lower-potency hemp edible retailer business within Scandia without first registering with the City of Scandia Any cannabis microbusiness, cannabis mezzobusiness, cannabis retailer business, medical cannabis combination business, or lower-potency hemp edible retailer business that sells to a customer or patient without valid registration shall incur a civil penalty of up to $2,000 for each violation. 2.2 Compliance Checks Prior to Retail Registration Prior to issuance of a registration, Scandia shall conduct a preliminary compliance check to ensure compliance with local ordinances. 2.3 Registration & Application Procedure 2.3.1 Fees. A registration fee, as established in Scandia’s fee schedule, shall be charged to applicants depending on the type of license applied for. The initial registration fee shall include the initial retail registration fee and the first annual renewal fee. Any renewal retail registration fee imposed by Scandia shall be charged at the time of the second renewal and each subsequent renewal thereafter. 2.3.2 Application Submittal. The City shall issue a registration to a business with a State License that adheres to the requirements of Minn. Stat. 342.22. (A) An applicant for a retail registration shall fill out an application form, as provided by the City of Scandia. Said form shall include, but is not limited to: i. Full name of the property owner and applicant; ii. Address, email address, and telephone number of the applicant; iii. The address and parcel ID for the property which the retail registration is sought; iv. Certification that the applicant complies with the requirements of local ordinances established pursuant to Minn. Stat. 342.13. v. Such other information as the city shall require. (B) The applicant shall include with the form: i. the application fee as required in [Section 2.3.1]; ii. a copy of a valid state license or written notice of OCM license preapproval; iii. Such other information as the city shall require. (C) Once an application is considered complete, the City Clerk shall inform the applicant as such, process the application fees, and forward the application to the City Council for approval or denial. (D) The application fee shall be non-refundable once processed. 2.3.3 Application Approval (A) A registration application shall not be approved if the cannabis business would exceed the maximum number of registered cannabis businesses permitted under Section 2.6. (B) A registration application shall not be approved or renewed if the applicant is unable to meet the requirements of this ordinance. (C) A registration application that meets the requirements of this ordinance shall be approved. 2.3.4 Annual Compliance Checks. The Washington County Sheriff’s Office shall complete at minimum one compliance check per calendar year of every cannabis business to assess if the business meets age verification requirements, as required under Minn. Stat. 342.22 Subd. 4(b) and Minn. Stat. 342.24. 2.3.5 Location Change A cannabis microbusiness, cannabis mezzobusiness, cannabis retailer business, medical cannabis combination business, or lower-potency hemp edible retailer business shall be required to submit a new application for registration under Section 2.3.2 if it seeks to move to a new location still within the legal boundaries of Scandia. 2.4 Renewal of Registration A cannabis microbusiness, cannabis mezzobusiness, cannabis retailer business, medical cannabis combination business, or lower-potency hemp edible retailer business shall apply to renew registration on a form established by Scandia. A cannabis retail registration issued under this ordinance shall not be transferred. 2.4.1 Renewal Fees. The City charges a renewal fee for the registration starting at the second renewal, as established in Scandia’s fee schedule. 2.4.2 Renewal Application. The application for renewal of a retail registration shall include, but is not limited to:  Items required under Section 2.3.2 of this Ordinance. 2.5 Suspension of Registration 2.5.1 When Suspension is Warranted. The City may suspend a registration if it violates the ordinance of the City or poses an immediate threat to the health or safety of the public. The City shall immediately notify the business in writing the grounds for the suspension. 2.5.2 Length of Suspension. The suspension of a registration may be for up to 30 calendar days, unless OCM suspends the license for a longer period. The business may not make sales to customers if their registration is suspended. The City may reinstate a registration if it determines that the violations have been resolved. 2.5.3 Civil Penalties. Subject to Minn. Stat. 342.22, subd. 5(e) the City imposes a civil penalty, as specified in the City’s Fee Schedule, for registration violations, up to $2,000. 2.6 Limiting of Registrations (Optional) There is one registration available for either a cannabis microbusiness, cannabis mezzobusiness, or cannabis retailer business. (Optional) There are ___ registrations available for cannabis microbusinesses, cannabis mezzobusinesses, and/or cannabis retailer businesses. Section 4. Temporary Cannabis Events 4.1 Permit Required for Temporary Cannabis Events 4.1.1 Permit Required. A permit is required to be issued and approved by the City of Scandia prior to holding a Temporary Cannabis Event. 4.1.2 Permit & Application Procedure A permit fee, as established in the City’s fee schedule, shall be charged to applicants for Temporary Cannabis Events. 4.1.3 Application Submittal & Review. The City shall require an application for Temporary Cannabis Events. (A) An applicant for a permit shall fill out an application form, as provided by the City. Said form shall include, but is not limited to: i. Full name of the property owner and applicant; ii. Address, email address, and telephone number of the applicant; iii. Such other information as the City may require. (B) The applicant shall include with the form: i. the application fee as required in (Section 4.1.2); ii. a copy of the OCM cannabis event license application, submitted pursuant to 342.39 subd. 2. The application shall be submitted to the City Clerk or other designee for review. If the designee determines that a submitted application is incomplete, they shall return the application to the applicant with the notice of deficiencies. (C) Once an application is considered complete, the designee shall inform the applicant as such, process the application fees, and forward the application to the City Clerk for approval or denial. (D) The application fee shall be non-refundable once processed. (E) The application for a permit for a Temporary Cannabis Event shall meet the following standards:  Insert standards here (G) A request for a Temporary Cannabis Event that does not meet the requirements of this Section shall be denied. The City of Scandia shall notify the applicant of the standards not met and basis for denial. Temporary cannabis events shall only be held at (insert local place). Temporary cannabis events shall only be held between the hours of 10:00 am and 9:00 p.m. Section 4. Lower-Potency Hemp Edibles 5.1 Sale of Low-Potency Hemp Edibles The sale of Low-Potency Edibles is permitted, subject to the conditions within this Section. 5.2 (Optional) Additional Standards 5.2.1 Age Requirements. The sale of Low-Potency Edibles is permitted only in places that admit persons 21 years of age or older. 153.600 MASTER GLOSSARY Agriculture, Commercial Outdoor Cannabis: See “Cannabis cultivation”. Agriculture, Commercial Indoor Cannabis: See “Cannabis cultivation”. Cannabis cultivation: Growing cannabis plants from seed or immature plant to mature plant, harvesting the cannabis flower from a mature plant, and packaging and labeling immature cannabis plants and seedlings and cannabis flower for sale. Cannabis, Event: A cannabis business that conducts an operation pursuant to Minnesota Statute Section 342.40. Cannabis, Mezzobusiness: A cannabis business that conducts an operation pursuant to Minnesota Statute Section 342.29. Cannabis, Microbusiness: A cannabis business that conducts an operation pursuant to Minnesota Statute Section 342.28. Cannabis sales: The sale of cannabis plants and seedlings, adult-use cannabis flower, and adult use cannabis products directly to consumers. Cannabis, Testing Facility: A cannabis business that conducts an operation pursuant to Minnesota Statute Section 342.38. Lower-Potency Hemp Edible, Light Manufacturing: A hemp business that conducts an operation pursuant to Minnesota Statute Section 342.45. Lower-Potency Hemp Edible sales: The sale of lower-potency hemp edibles, that have been obtained from a licensed Minnesota cannabis microbusiness, cannabis mezzobusiness, cannabis manufacturer, cannabis wholesaler, or lower-potency hemp edible manufacturer, directly to consumers. 153.300 ALLOWED USES BASE ZONING DISTRICTS A-P AG-C RR-G RR-N V-N V-C V-HC R-C I-P Use Specific Section Reference Agriculture, Commercial Outdoor Cannabis P P P 153.300.030 Subd. 1 (A) Agriculture, Commercial Indoor Cannabis CUP CUP CUP 153.300.030 Subd. 1 (B) Cannabis sales P P P P Cannabis, Mezzobusiness CUP CUP P P 153.300.030 Subd. 1 (D) Cannabis, Microbusiness CUP CUP P P Light Manufacturing, Cannabis CUP 153.300.030 Subd. 1 (E) Wholesaling, Cannabis P 153.300.030 Subd. 1 (F) Laboratories, Medical, Research, and Testing CUP 153.300.030 USE SPECIFIC REGULATIONS Subd. 1. Summary. The following performance standards are established and must be met to obtain the applicable permit as identified on Table 2. Table of Uses by Base Zoning District. The standards which follow are the minimum required standards, and if listed as a conditional use, additional standards or reasonable conditions may be placed on any approved permit for the requested use. All uses shall comply with the rules and regulations of the Base Zoning District, Special District and Overlay Districts where applicable. Any use must also meet the rules and regulations any other applicable agencies with jurisdiction of the subject use including Local, State and Federal agencies. (A) Agriculture, Commercial Outdoor Cannabis. As a principal or accessory use, commercial outdoor cannabis is allowed, subject to the following standards: I. Must be licensed by the State of Minnesota and in compliance with the standards set by the Office of Cannabis Management. II. Any area used to cultivate or grow cannabis must meet the following setbacks: Horizontal Setbacks (Minimum) Any property line 50 feet Minor Arterial Street 150 Feet from centerline, or 75 Feet from ROW, whichever is greater Major or Minor Collector Street 100 Feet from centerline, or 50 Feet from ROW, whichever is greater Any other Public Street 40 Feet III. Any area where cannabis is grown, handled, or packaged shall be completely fenced as required by the Office of Cannabis Management and equipped with an emergency key box. (B) Agriculture, Commercial Indoor Cannabis. As a principal or accessory use, commercial indoor cannabis agriculture or cultivation is allowed as a conditional use, subject to the following standards: I. Must be licensed by the State of Minnesota and in compliance with the standards set by Minnesota Statutes, Minnesota Rules, and the Office of Cannabis Management. II. The facility shall be secured as required by Minnesota Statutes, Minnesota Rules, and the Office of Cannabis Management. III. Any structure shall comply with the applicable character area standards set forth in Section 153.400.040. a. Indoor cannabis cultivation and growing facilities within the A-P or AG-C Districts must be designed to appear like traditional agricultural structures and must be consistent with the character of the area. IV. The facility shall not produce noxious or nuisance causing odors, subject to the following conditions: a. The facility shall be ventilated so that all odors cannot be detected by a person with a normal sense of smell at the exterior of the facility or at any adjoining use or property. b. Growing cannabis must comply with all applicable laws and shall not produce noxious or dangerous gases or odors or otherwise create a danger to any person or entity in or near the facilities. c. The applicant shall provide plans that show appropriate odor control systems so as not to produce any noxious or dangerous gases or odors or create any dangers to any person or entity in or near the facility. d. An odor maintenance plan must be submitted to the City and approved by the City’s consultant. V. All mechanical, odor suppression equipment, and trash enclosures must be screened. VI. Outdoor storage of containers, pallets, waste/recycle containers, etc. is prohibited. VII. Lighting a. All site lighting must meet City Code requirements. All light fixtures must be downward directed with cut-offs and be architecturally designed to match the overall design of the building. b. The specifications of all light fixtures must be provided by the City with the application for a building permit. c. A photometric plan must be submitted to the City prior to the issuance of a building permit indicating light measure at the property line. d. Lighting within a greenhouse is permitted between the hours of 4:30 a.m. and 10:00 p.m. Lighting at the site property lines shall not exceed 1.0 foot- candles at any time. VIII. Water and Wastewater a. Management of wastewater shall be in accordance with the Office of Cannabis Management, Minnesota Pollution Control Agency, or local ordinances. Where multiple standards exist, the more restrictive of the standards shall apply. b. Water use within the site shall be designed to maximize the amount of water reuse possible. (C) Cannabis, Microbusiness. As a principal or accessory use, subject to the following standards: I. Must be licensed by the State of Minnesota and in compliance with the standards set by Minnesota Statutes, Minnesota Rules, and the Office of Cannabis Management. II. Cannabis cultivation shall conform with the standards established in Section [153.300.030 Subd. 1 (_)]. III. Manufacturing and processing cannabis shall conform with the standards established in Section [153.300.030 Subd. 1 (_)]. (D) Cannabis, Mezzobusiness. As a principal or accessory use subject to the following standards: I. Must be licensed by the State of Minnesota and in compliance with the standards set by Minnesota Statutes, Minnesota Rules, and the Office of Cannabis Management. II. Cannabis cultivation shall conform with the standards established in Section [153.300.030 Subd. 1 (_)]. III. Manufacturing and processing cannabis shall conform with the standards established in Section [153.300.030 Subd. 1 (_)]. (E) Light Manufacturing, Cannabis. As a principal use, cannabis manufacturing is allowed, subject to the following standards: I. Must be licensed by the State of Minnesota and in compliance with the standards set by Minnesota Statutes, Minnesota Rules, and the Office of Cannabis Management. II. The facility shall be secured as required by Minnesota Statutes, Minnesota Rules, and the Office of Cannabis Management. III. Any structure shall comply with the applicable character area standards set forth in Section 153.400.040. IV. Warehousing and distribution are allowed as an accessory use to cannabis manufacturing, subject to the following standards: a. Exterior Storage is permitted as an accessory use to the permitted use provided it meets the following standards: 1. The exterior storage area must be located to the rear of the building. 2. The exterior storage area must be fenced and screened from view of the public right-of-way, State, County, and City roadways, and all property lines. b. All loading and unloading areas to the facility must be screened from view of the public right-of-way and State, County, and City roadways. c. Landscaping and screening must be provided according to the requirements of Section [153.400.060]. V. The facility shall not produce noxious or nuisance causing odors, subject to the following conditions: a. The facility shall be ventilated so that all odors cannot be detected by a person with a normal sense of smell at the exterior of the facility or at any adjoining use or property. b. Cannabis cultivation must comply with all applicable laws and shall not produce noxious or dangerous gases or odors or otherwise create a danger to any person or entity in or near the facilities. c. The applicant shall provide to the City verification from a qualified industrial hygienist that the facility provides appropriate odor control systems so as not to produce any noxious or dangerous gases or odors or create any dangers to any person or entity in or near the facility. d. An odor maintenance plan must be submitted to the City and approved by the City’s consultant. e. Monitoring shall be conducted at the monitoring locations no less than bi- weekly and the data provided to the City twice annually. VI. All mechanical, odor suppression equipment, and trash enclosures must be screened VII. Outdoor storage of containers, pallets, waste/recycle containers, etc. is prohibited. VIII. Lighting a. All site lighting must meet City Code requirements. All light fixtures must be downward directed with cut-offs and be architecturally designed to match the overall design of the building. b. The specifications of all light fixtures must be provided by the City with the application for a building permit. c. A photometric plan must be submitted to the City prior to the issuance of a building permit indicating light measure at the property line. IX. Water and Wastewater a. Management of wastewater shall be in accordance with the Office of Cannabis Management, Minnesota Pollution Control Agency, or local ordinances. Where multiple standards exist, the more restrictive of the standards shall apply. b. Water use within the site shall be designed to maximize the amount of water reuse possible. (F) Wholesaling, Cannabis. As a principal use, cannabis wholesaling is allowed, subject to the following standards: I. Must be licensed by the State of Minnesota and in compliance with the standards set by Minnesota Statutes, Minnesota Rules, and the Office of Cannabis Management. II. The facility shall be secured as required by Minnesota Statutes, Minnesota Rules, and the Office of Cannabis Management. III. Any structure shall comply with the applicable character area standards set forth in Section 153.400.040. IV. Warehousing and distribution are allowed as an accessory use to cannabis wholesaling, subject to the following standards: a. Exterior Storage is permitted as an accessory use to the permitted use provided it meets the following standards: 1. The exterior storage area must be located to the rear of the building. 2. The exterior storage area must be fenced and screened from view of the public right-of-way, State, County, and City roadways, and all property lines. b. All loading and unloading areas to the facility must be screened from view of the public right-of-way and State, County, and City roadways. c. Landscaping and screening must be provided according to the requirements of Section [153.400.060]. V. The facility shall not produce noxious or nuisance causing odors, subject to the following conditions: a. The facility shall be ventilated so that all odors cannot be detected by a person with a normal sense of smell at the exterior of the facility or at any adjoining use or property. b. Cannabis cultivation must comply with all applicable laws and shall not produce noxious or dangerous gases or odors or otherwise create a danger to any person or entity in or near the facilities. c. The applicant shall provide plans that show appropriate odor control systems so as not to produce any noxious or dangerous gases or odors or create any dangers to any person or entity in or near the facility. d. An odor maintenance plan must be submitted to the City and approved by the City’s consultant. VI. All mechanical, odor suppression equipment, and trash enclosures must be screened VII. Outdoor storage of containers, pallets, waste/recycle containers, etc. is prohibited. VIII. Lighting a. All site lighting must meet City Code requirements. All light fixtures must be downward directed with cut-offs and be architecturally designed to match the overall design of the building. b. The specifications of all light fixtures must be provided by the City with the application for a building permit. c. A photometric plan must be submitted to the City prior to the issuance of a building permit indicating light measure at the property line.