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09.c2 Draft UDC Amendment for Cannabis Mezzobusinesses and Microbusinesses - CC Packet 1 | P a g e Date of Meeting: August 19, 2025 To: Honorable Mayor and Members of the City Council From: T.J. Hofer, Consultant City Planner Re: Draft UDC Amendment for Cannabis Mezzobusinesses and Microbusinesses City staff have prepared draft a draft ordinance related to cannabis mezzobusinesses and microbusinesses to clarify an existing standard. BACKGROUND Staff recently reviewed the standards related to cannabis mezzobusinesses and microbusinesses and identified that additional clarification in the adopted ordinance could be beneficial in enforcing the ordinance and providing clarity to users of the Unified Development Code (UDC). Mezzobussinesses and microbusinesses licenses allow for license holders to cultivate cannabis, manufacture cannabis products, and sell cannabis products. Staff believe the intent of the Council was to allow for mezzobusinesses and microbusinesses to operate their separate uses in different districts, but not to supersede the classifications of the uses, “Agriculture, Commercial Outdoor Cannabis,” “Agriculture, Commercial Indoor Cannabis,” “Light Manufacturing, Cannabis,” “Cannabis sales,” and “Wholesale, Cannabis.” An example of this in effect would be a mezzobusiness licenses holder being allowed to perform cannabis sales in the R-C zoning district, but not allowed to cultivate or manufacture cannabis in the R-C district as “Agriculture, Commercial Outdoor Cannabis,” “Agriculture, Commercial Indoor Cannabis,” “Light Manufacturing, Cannabis,” are prohibited in those zoning districts. BASE ZONING DISTRICTS Land Use A-P AG-C RR-G RR-N V-N V-C V-HC R-C I-P Use Specific Section Reference Commercial Uses Agriculture, Commercial Outdoor Cannabis P P P Error! Reference source not found. & Error! Reference source not found. Agriculture, Commercial Indoor Cannabis CUP CUP CUP Error! Reference source not found. & Error! Reference source not found. 2 | P a g e BASE ZONING DISTRICTS Land Use A-P AG-C RR-G RR-N V-N V-C V-HC R-C I-P Use Specific Section Reference Cannabis sales P P P P Error! Reference source not found. Cannabis, Mezzobusiness CUP CUP P P Error! Reference source not found. & 153.400.010Subd. 1(I) Cannabis, Microbusiness CUP CUP P P Error! Reference source not found. & 153.400.010Subd. 1(J) Light Manufacturing, Cannabis CUP Error! Reference source not found. & Error! Reference source not found. Light Manufacturing, Cannabis CUP Error! Reference source not found. & Error! Reference source not found. Wholesaling, Cannabis P Error! Reference source not found. & Error! Reference source not found. Staff believe that the existing standards that lists “Cannabis, Mezzobusiness” and “Cannabis, Microbusiness” as permitted in the R-C and I-P district could be misconstrued as allowing cultivation, manufacturing, and sales as uses that are permitted by right. Staff have prepared language to clarify what staff believes to be the intent of the Council. SUMMARY OF DRAFT ORDINANCE BASE ZONING DISTRICTS Land Use A-P AG-C RR-G RR-N V-N V-C V-HC R-C I-P Use Specific Section Reference Commercial Uses Agriculture, Commercial Outdoor Cannabis P P P Error! Reference source not found. & Error! Reference source not found. Agriculture, Commercial Indoor Cannabis CUP CUP CUP Error! Reference source not found. & Error! Reference source not found. Cannabis sales P P P P Error! Reference source not found. Cannabis, Mezzobusiness CUP CUP P P Error! Reference source not found. & 153.400.010Subd. 1(I) See Standards Established in 153.300.030 Subd. 1 (I) Cannabis, Microbusiness CUP CUP P P Error! Reference source not found. & 153.400.010Subd. 1(J) See Standards Established in 153.300.030 Subd. 1 (J) 3 | P a g e BASE ZONING DISTRICTS Land Use A-P AG-C RR-G RR-N V-N V-C V-HC R-C I-P Use Specific Section Reference Light Manufacturing, Cannabis CUP Error! Reference source not found. & Error! Reference source not found. Light Manufacturing, Cannabis CUP Error! Reference source not found. & Error! Reference source not found. Wholesaling, Cannabis P Error! Reference source not found. & Error! Reference source not found. (I) 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. Mezzobusiness cannabis uses include commercial cannabis agriculture, cannabis light manufacturing, and cannabis sales. These uses are only allowed within the zoning districts in which the corresponding use is allowed in Table 153.300.020-2. III. The use shall comply with the standards in Section [153.300.030 Subd. 1 (H) Cannabis Businesses and Hemp Businesses]. IV. Cannabis cultivation shall conform with the standards established in Section [153.300.030 1 (C) and (D)]. V. Manufacturing and processing cannabis shall conform with the standards established in Section [153.300.030 Subd. 1 (U)]. (J) 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. Microbusiness cannabis uses include commercial cannabis agriculture, cannabis light manufacturing, and cannabis sales. These uses are only allowed within the zoning districts in which the corresponding use is allowed in Table 153.300.020-2. III. The use shall comply with the standards in Section [153.300.030 Subd. 1 (H) Cannabis Businesses and Hemp Businesses]. IV. Cannabis cultivation shall conform with the standards established in Section [153.300.030 Subd. 1 (C) and (D)]. 4 | P a g e V. Manufacturing and processing cannabis shall conform with the standards established in Section [153.300.030 Subd. 1 (U)]. Staff believes the above ordinance clarifies the previous intent of the City Council. Staff requests the City Council provide feedback to staff regarding the intent regarding mezzobusinesses and microbusinesses and any desired changes or additions. COUNCIL ACTION The City Council can choose to have the language move forward through the amendment process by recommending the ordinance amendment to the Planning Commission, or, have staff continue to work on the amendments before beginning the process. RECOMMENDATION Staff recommend the Council recommend the ordinance amendment to the Planning Commission to be heard at a public hearing at the next possible meeting. Attachments A. Draft 153.300 Standards for Cannabis Mezzobusiness and Microbusiness B. Zoning Map 153.300 ALLOWED USES 153.300.200 TABLE OF USES Subd. 1. Classification of Uses. Each Use as established on Table 153.300.020-2. Table of Uses by Base Zoning District is classified as either permitted, permitted through regulation or requirement, or prohibited. The following classifications are provided for reference. (A) Classification References and Acronyms. The table of uses is classified by the following: Table 153.300.020-1. Classification References and Acronyms Classification Corresponding Table Acronym Permitted P Conditionally Permitted – Requires Conditional Use Permit CUP Conditionally Permitted for Temporary Use – Requires Interim Use Permit IUP Permitted with Administrative Permit AP Permitted if Accessory to Principal Use A Not Permitted (or prohibited) Blank Subd. 2. Table of Uses. The following table of uses is established by Base Zoning District. Table 153.300.020-2. Table of Uses by Base Zoning District 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 Land Use Agricultural Preserve Agricultural Core Rural Residential General Rural Residential Neighborhood Village Neighborhood Village Center Village Historic Core Rural Commercial Industrial Park Commercial Uses Agriculture, Commercial Outdoor Cannabis P P P Error! Reference source not found.& Error! Reference source not found. Agriculture, Commercial Indoor Cannabis CUP CUP CUP Error! Reference source not found. & Error! Reference source not found. Cannabis sales P P P P Error! Reference source not found. 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 Cannabis, Mezzobusiness See Standards Established in 153.300.030 Subd. 1 (I) Error! Reference source not found. & 0 Cannabis, Microbusiness See Standards Established in 153.300.030 Subd. 1 (J) Error! Reference source not found. & 153.300.010Subd. 1(B) Light Manufacturing, Cannabis CUP Error! Reference source not found. & Error! Reference source not found. Light Manufacturing, Cannabis CUP Error! Reference source not found. & Error! Reference source not found. Wholesaling, Cannabis P Error! Reference source not found. & Error! Reference source not found. 153.300.030 USE SPECIFIC REGULATIONS Subd. 1. Summary. The follow 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. (I) 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. I.II. Mezzobusiness cannabis uses include commercial cannabis agriculture, cannabis light manufacturing, and cannabis sales. These uses are only allowed within the zoning districts in which the corresponding use is allowed in Table 153.300.020-2. II.III. The use shall comply with the standards in Section [153.300.030 Subd. 1 (H) Cannabis Businesses and Hemp Businesses]. III.IV. Cannabis cultivation shall conform with the standards established in Section [153.300.030 1 (C) and (D)]. IV.V. Manufacturing and processing cannabis shall conform with the standards established in Section [153.300.030 Subd. 1 (U)]. (B) 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. I.II. Microbusiness cannabis uses include commercial cannabis agriculture, cannabis light manufacturing, and cannabis sales. These uses are only allowed within the zoning districts in which the corresponding use is allowed in Table 153.300.020-2. II.III. The use shall comply with the standards in Section [153.300.030 Subd. 1 (H) Cannabis Businesses and Hemp Businesses]. III.IV. Cannabis cultivation shall conform with the standards established in Section [153.300.030 Subd. 1 (C) and (D)]. IV.V. Manufacturing and processing cannabis shall conform with the standards established in Section [153.300.030 Subd. 1 (U)]