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09.b1 Emerald Horizon CUP for Indoor Cannabis Cultivation and Light Manufactoring of Lower-Potency Hemp Edibles
1 | P a g e Date of Meeting: April 21, 2026 To: Honorable Mayor and Members of the City Council From: Jeffery Matzke, Consultant City Planner T.J. Hofer, Consultant City Planner Greenlee Dahle, Consultant City Planner Re: Conditional Use Permit (CUP) for Indoor Cannabis Cultivation and Light Manufacturing of Cannabis and Lower-Potency Hemp Edibles Applicant: Joe Whebbe Zoning: Industrial Park (I-P) Owner: Royal Stirling, LLC Future Land Use: Village Mixed Use Location: 21080 Ozark Ct N PID 14.032.20.43.0013 Review Deadline May 16, 2026 (60 days) The applicant is requesting approval for a Conditional Use Permit (CUP) to allow for the indoor cultivation of cannabis and the light manufacturing of cannabis and lower-potency hemp edibles at 21080 Ozark Ct N. The staff report to the Planning Commission from the April 7, 2026, meeting is attached and includes the full background of the request, as well as an evaluation of the request, and an analysis based on the standards in the Unified Development Code. Staff have included an analysis of the recommended conditions, potential issues with the city’s ability to regulate certain aspects of cannabis and hemp businesses, as well as unnecessary or repetitive conditions. Staff are recommending amendments to the conditions recommended by the Planning Commission. EVALUATION OF REQUEST Proposed Conditions The applicant proposes a “Cannabis, Microbusiness,” which includes “Agriculture, Commercial Indoor Cannabis Cultivation,” “Light Manufacturing, Cannabis,” and “Lower-Potency Hemp Edible (LPHE) Manufacturing.” The applicant has stated that they would not offer retail sales at this location. Cannabis sales and LPHE sales are a permitted use in the I-P zoning district, but 2 | P a g e retail activities require a retail license or endorsement from OCM and a local retail registration issued by the city. The Planning Commission is proposing a condition of approval that would require future approvals from the city for retail sales of cannabis or LPHE products on site (registration and CUP amendment). ANALYSIS Planning Commission The request was initially heard at the April 7, 2026, meeting of the Planning Commission. A public hearing was held and two comments were received, one member of the public and the applicant. The comment expressed concerns regarding odor and noise and asked questions regarding the process. The Planning Commission discussed the application and reviewed the conditions. • Commissioner Cullen stated they had submitted a written statement regarding concerns about the use. Cullen’s written statement included seven additional conditions they recommended for the resolution. The statement is included in the attachments. The recommended conditions were discussed. Chair Loeffler voiced agreement with the condition for a maintenance log. The applicant asked what standard would be used to evaluate odor concerns. Commissioner Hogle noted that for a condition to be applied regarding odor, a standard would be required. Cullen stated they were unaware of a standard. The applicant, Loeffler, and Cullen discussed the process and importance of odor controls, with the applicant stating they were dedicated to addressing any odor concerns. Cullen stated they believed a condition was required to ensure compliance. • Commissioner Marosok voiced concerns regarding the legal authority for the use and asked if community concerns existed for cannabis uses. Marosok asked if a six-foot fence would be tall enough for security. Marosok asked if the Fire Department had reviewed the project for potential concerns. The questions were discussed and addressed. • Commissioner Fodor noted they were familiar with indoor growth facilities and that they had concerns related to chemical usage. Fodor noted that they wished additional information was available for the interior build-out of the structure. The applicant stated that the plans for the interior were still being developed. Loeffler noted that it is not uncommon for a plan to not be fully designed when land use approvals are not secured. • Cullen stated that they had not seen a demonstrated ability to comply with the conditions. Cullen asked what the anticipated noise generation from mechanical equipment would be and the applicant stated they expected it would be none. Cullen stated they believed a condition should be added regarding noise generation. Cullen stated they believed that it was the responsibility of the Planning Commission to not defer due diligence to the state. City Administrator Morell noted that OCM specifically asks if an applicant meets zoning requirements. • Cullen asked the applicant about past land use applications in other communities. The applicant stated that the previous locations included a request for rezoning, which made this application different for the applicant. 3 | P a g e The Planning Commission moved to recommend approval of the request, with amendments. The motion was approved with a vote of 5-0. Cullen noted their concern about not seeing a demonstrated ability to meet the conditions. The amendments include seven new conditions and two amendments to existing conditions: • Amended Conditions: o The applicant shall comply with all applicable local, county, state, and federal laws, rules, and regulations, including requirements of the Minnesota Office of Cannabis Management. Failure to comply may result in enforcement action or revocation of the Conditional Use Permit. o Existing vegetation on site shall be maintained to the highest extent possible to provide screening. Landscaping and tree plantings shall be consistent with the submitted application and the Unified Development Code as well as the recommended tree species from the Minnesota Department of Natural Resources. • Added Conditions o Engineering Certification. Prior to commencing operations, the applicant shall submit to the City a written certification from a licensed mechanical engineer or qualified cannabis odor control consultant confirming that the odor mitigation system has been designed and sized appropriately for the facility’s square footage, air volume, and anticipated terpene load. o Full Facility Coverage. The odor mitigation system shall cover all odor-generating spaces within the facility, including but not limited to cultivation rooms, drying rooms, curing rooms, trimming areas, packaging areas, and any extraction or processing rooms. o Maintenance Log. The operator shall maintain a written maintenance log documenting all inspections, filter replacements, and repairs to the odor mitigation system. This log shall be kept on site and made available to City staff or its designee upon request during any inspection. o Annual Inspection. The odor mitigation system shall be inspected by a qualified third party no less than once per calendar year. A written report of each inspection shall be submitted to the City within 30 days of completion. o Odor Complaint Response Protocol. If the City receives a verified odor complaint attributable to the facility, the operator shall respond in writing within 48 hours documenting the status of the odor mitigation system and any corrective actions taken or planned. Repeated verified complaints may be grounds for review of the CUP. o System Failure Notification. If the odor mitigation system becomes non-operational for any reason, the operator shall notify the City within 24 hours and shall suspend any operations generating significant odors until the system is restored to full operation. o OCM License Condition. No cannabis cultivation or manufacturing operations shall commence until the applicant has provided the City with proof of a valid, active license issued by the Minnesota Office of Cannabis Management for the specific license types applicable to the proposed operations. Commissioner Cullen submitted another statement regarding the application on April 14, 2026, which is attached. 4 | P a g e Public Comment One written public comment was received. The comment is attached. Review Comments The submittal was sent to city staff and other regulatory agencies for review and comment, and comments have been incorporated into the resolution. These comments are detailed in the Planning Commission report that is attached. Staff Analysis Staff have reviewed the plan for consistency with the applicant standards outlined in the Comprehensive Plan and Unified Development Code. Staff have identified concerns related to a number of recommended conditions that the Planning Commission added that have been detailed below. Additionally, staff have revised a number of the conditions for clarity and conciseness. City Role in Cannabis Land Uses Minnesota State Statute 342.13 Local Control details the control that a unit of government may extend over cannabis and hemp uses. The statute states: A local unit of government may adopt reasonable restrictions on the time, place, and manner of the operation of a cannabis business provided that such restrictions do not prohibit the establishment or operation of cannabis businesses. OCM has also established a “Cannabis Model Ordinance.” Within the model ordinance, only four effective standards are detailed: the allowed state buffers, assigning cannabis and hemp uses to existing zoning districts, controls for hours of operation of cannabis retail sales, and advertising standards. While this is not the entirety ofn what a city can regulate, the City of Scandia should be wary of overreach when dealing with cannabis and hemp uses, as the state gave municipalities limited authority over them. When considering a conditional use, the city must evaluate an application based on the conditions established within adopted ordinances. If the conditions are met, the application should be approved. If the city is unsure if a condition is currently met or is not being met, the city may ask for additional information or apply reasonable conditions to ensure the conditions are met. The city may establish reasonable conditions when approving a conditional use permit. Those conditions are either met and the use is implemented, or they are not met and the CUP is revoked. The city cannot evaluate an application based on the background of an applicant, a perceived ability to meet or not meet the conditions, or the fiscal resources necessary to meet such condition, unless a documented history of noncompliance is available or there is a factual basis that the city can determine. Speculation on ability to meet conditions is otherwise arbitrary and capricious. Analysis of Conditions The following analysis is offered on the recommended conditions: 5 | P a g e • Condition 6 is implicit and required to show compliance with the standards for the proposed uses in the UDC. This should be required before building permit is issued, however, not before operations begin. • Conditions 7, 8, and 9 all relate to maintenance of the facility and inspections. Requiring a third party inspection to be reported to the city is irregular and not something that is required per the adopted conditions in the UDC, and therefore can be considered capricious. Other commercial and industrial uses within the city are not subject to third party inspections. Additionally, 342.13 (g) establishes a procedure for local units of government to submit complaints about cannabis and hemp uses that include an inspection protocol. • Condition 10 prohibits retail sales without amendments to the CUP. Staff believes this should be struck as “Cannabis sales” is a permitted use in the I-P zoning district. The applicant has applied for a microbusiness license which is allowed to perform cannabis retail sales if a retail endorsement was given by OCM. If this were to happen, the business would need to go through the retail registration process with the city and meet the standards required in the UDC for Cannabis sales. Any additional requirements would be inconsistent with the adopted ordinance. If the restriction on retail is removed, the resolution should be revised to allow “Cannabis, Microbusiness” instead of “Agriculture, Commercial Indoor Cannabis, Cannabis Businesses and Hemp Businesses, and Light Manufacturing, Cannabis.” • Condition 11 is unnecessary as “Agriculture, Commercial Outdoor Cannabis” is prohibited in the I-P zoning district. • Condition 16 may be considered overreach based on state statute. Statute allows for local units of government to regulate the hours of operation for retail sales, but does not speak to other uses. The proposed use should be held to the same standard as other uses in the area, which have not historically had hours of operation limitations. • Multiple conditions related to exterior alterations, new structures, fencing, signage, exterior lighting, security requirements, and off-street parking and loading areas are redundant as these are standards established in the code and the resolution states that the CUP may be revoked if the use is not consistent with the adopted ordinances. Staff have consolidated these into a single condition, condition 4. Staff Recommendations Staff are recommending one change in recommended findings and several changes from the recommended conditions. These are presented towards the end of this report. Staff would recommend that the Council consider striking conditions 7, 8, 9, 11, and 16 from the approval. The following is recommended in place of condition 6: Prior to a building permit being issued for the site, the applicant shall submit plans prepared by a licensed or qualified professional that include a statement regarding the efficacy of the following systems and plans, demonstrating that: a. The applicant has proposed to recapture and filter water used for reuse in the growth process. Water use within the site shall be designed to maximize water reuse. 6 | P a g e b. The applicant shall submit documentation that the well and septic on the site support the proposed use. c. The applicant has proposed a closed-air carbon filtration system with negative air pressure at all entrance. The entire facility shall not produce noxious or nuisance causing odors and is in accordance with the standards from the Office of Cannabis Management and the Minnesota Pollution Control Agency. The following amendment is recommended for Condition 10: No retail sales, onsite consumption, or public access is permitted unless specifically approved through a future CUP amendment and all required state and local approvals. Additionally, the applicant is currently proposing the expansion of the facility to be part of the CUP approval. For the most efficient process, if the expansion is approved as part of the CUP, including a condition that allows for an administrative site plan review is advised: The expansion of the structure shown in the approved site plan shall be subject to an administrative site plan review prior to a building permit being issued, provided that the application for the expansion is complete and in compliance with the standards of this approval, the applicable codes, ordinances, and policies, and does not require any variance from this approval or those standards. If the expansion is not complete and in compliance, a CUP Amendment shall be required. If the Council wishes to include additional clarity regarding the odor management system that allow for the CUP to be revoked, a simplified condition is recommended that does not include inspections and maintenance logs. The following is not included in the summarized recommendations below: The owner shall ensure the odor mitigation system, including carbon filtration and negative air pressure, be maintained in working order at all times. COUNCIL ACTION The City Council can do one of the following: 1. Approve the attached resolution, with or without conditions. 2. Deny the attached resolution, with findings. 3. Table the request for further review/study. RECOMMENDATION The Planning Commission recommends that the City Council approve a conditional use permit to allow for indoor cultivation of cannabis, light manufacturing of cannabis, and light manufacturing of lower-potency hemp edibles, with the findings and conditions described within the staff report. Approval includes a resolution. Recommended conditions are included in the attached resolution. 7 | P a g e Motion to approve a conditional use permit for an essential services – utility substation, with the findings and conditions as recommended by the Planning Commission. Staff are recommending that the City Council amend the recommended conditions based on the analysis included within this staff report. The following finding is offered in place of finding 7: 7. This Conditional Use Permit meets the general and specific performance standards of the UDC. As required in 153.200.030 Subd. 5 (A) Industrial Park (I-P) Zoning District and 1530.300.030 Subd. 1 (J) Cannabis, Microbusiness of the UDC. The following conditions are recommended by staff. 1. The CUP is granted only for the specific cannabis and lower-potency hemp edible uses approved and described in the application and staff report, which include “Cannabis, Microbusiness.” 2. Development of the site shall be substantially consistent with the plans submitted to and reviewed by the City as part of this application, except where modifications are required by these conditions. 3. Prior to a building permit being issued for the site, the applicant shall submit plans prepared by a licensed or qualified professional that include a statement regarding the efficacy of the following systems and plans, demonstrating that: a. The applicant has proposed to recapture and filter approximately 90% of all water used for reuse in the growth process. Water use within the site shall be designed to maximize water reuse. b. The applicant shall submit documentation that the well and septic on the site support the proposed use c. The applicant has proposed a closed-air carbon filtration system with negative air pressure at all entrances. The entire facility shall not produce noxious or nuisance- causing odors and shall be in accordance with the standards from the Office of Cannabis Management and the Minnesota Pollution Control Agency. 4. All exterior alterations, new structures, fencing, signage, exterior lighting, security requirements, and off-street parking and loading areas shall comply with any and all relevant standards adopted in the Unified Development Code and any other local, state, or federal standards and regulations. 5. The expansion of the structure shown in the approved site plan shall be subject to an administrative minor project site plan review prior to a building permit being issued, provided that the application for the expansion is complete and in compliance with the standards of this approval, the applicable codes, ordinances, and policies, and does not require any variance from this approval or those standards. If the expansion is not complete and in compliance, a CUP Amendment shall be required. 6. No onsite consumption is permitted. No public access shall be allowed unless retail registration has been issued and public access shall be limited to retail portions of the building. 7. An approved fire department access system shall be installed prior to occupancy. 8 | P a g e 8. The owner shall ensure the odor mitigation system, including carbon filtration and negative air pressure, be maintained in working order at all times. 9. Existing vegetation on site shall be maintained to the highest extent possible to provide screening. Landscaping and tree plantings shall be consistent with the submitted application and the Unified Development Code as well as the recommended tree species from the Minnesota Department of Natural Resources. 10. The site shall utilize existing utility connections unless otherwise approved, and any proposed reuse or filtration systems shall comply with applicable health and environmental regulations, including those enforced by Washington County. 11. The applicant shall obtain and maintain all required licenses and permits for the duration of the use, including but not limited to the applicable licenses to allow the approved uses. The applicant shall submit proof of valid license issuance by the Office of Cannabis Management or authorized state officials to the City annually. 12. The applicant shall comply with all applicable local, county, state, and federal laws, rules, and regulations, including requirements of the Minnesota Office of Cannabis Management. Failure to comply may result in enforcement action or revocation of the Conditional Use Permit. 13. The City may revoke the Conditional Use Permit for the site if all permits and required work to comply with approvals from other local, state, and federal permits are not completed. 14. Failure to comply with any conditions of approval constitutes a zoning violation and may result in enforcement action or revocation of the Conditional Use Permit. 15. The conditional use permit shall expire without further action by the Planning Commission or the City Council unless the applicant commences the authorized use within one year of the date the conditional use permit is issued or extended through the process described in 153.500.060 Subd. 1(C)(v) of the Unified Development Code. Attachments A. Resolution 04-21-26-02 Approving Conditional Use Permit for PID 1403220430013 Located at 21080 Ozark Court North B. Notch Public Comment, dated April 6, 2026 C. Commissioner Cullen Written Comments, dated April 7, 2026 D. Commissioner Cullen Written Comment, dated April 14, 2026 E. Planning Commission “Conditional Use Permit (CUP) for Indoor Cannabis Cultivation and Light Manufacturing of Cannabis and Lower-Potency Hemp Edibles” Packet, dated April 7, 2026 CITY OF SCANDIA, MINNESOTA RESOLUTION NO. 04-21-26-02 APPROVING CONDITIONAL USE PERMIT FOR PID 1403220430013 LOCATED AT 21080 OZARK COURT NORTH WHEREAS, Joseph Whebbe (the “applicant”) made an application for a Conditional Use Permit, to allow for the indoor cultivation of cannabis, light manufacturing of cannabis, and light manufacturing of lower-potency hemp edibles, located at 21080 Ozark Court North and the property legally described as follows (the “subject property”): Hawkinson Business Park, Lot 6 Block 1 WHEREAS, the subject property is zoned as Industrial Park (I-P) District; and WHEREAS, the City of Scandia Unified Development Code (UDC) conditionally permits the indoor cultivation of cannabis, light manufacturing of cannabis, and light manufacturing of lower-potency hemp edibles in the I-P District; and WHEREAS, Section 153.500 of the City of Scandia UDC governs conditional use permits, and the process; and WHEREAS, staff reviewed the submittal and applicable UDC standards and determined the Conditional Use Permit (CUP) application to be complete on March 18, 2026; and WHEREAS, staff recommended approval of the CUP request with conditions; and WHEREAS, the Planning Commission reviewed the request for the Conditional Use Permit (CUP) at a duly noticed Public Hearing on April 7, 2026, and recommended that the City Council approve the CUP, with conditions. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF SCANDIA, WASHINGTON COUNTY, MINNESOTA, that it approves of a Conditional Use Permit to allow for the indoor cultivation of cannabis, light manufacturing of cannabis, and light manufacturing of lower-potency hemp edibles located at 21080 Ozark Court North, based on the following findings: 1. Objectives of the Comprehensive Plan include encouraging development that is compatible with surrounding land uses, protects natural resources, and efficiently utilizes existing infrastructure. The proposed uses comply with the Comprehensive Plan and will not have a negative effect on public facilities or capital improvement plans. 2. The proposed uses are allowed in the I-P zoning district with a Conditional Use Permit. The proposed uses would operate indoors, utilizing the existing facility, isolated from public access, and are subject to state licensing, security, inspection, and tracking requirements. These uses will not negatively impact public welfare and will not be detrimental to or endanger the public health, safety, or comfort. Reasonable conditions of approval can be added if the City Council finds issues with proposed uses. 3. The proposed uses will not be injurious to the use and enjoyment of other property in the immediate vicinity for the purposes already permitted, nor substantially diminish and impair property values or scenic views. 4. The proposed uses will not impede development or improvement of surrounding properties. 5. The proposed uses will utilize existing utility services and do not require an extension of city-owned public facilities. The applicant has also proposed filtration systems to minimize water and electricity use. 6. The proposed uses are generally consistent with the applicable regulations of the I-P zoning district and all other applicable standards of the UDC. Reasonable conditions have been included with the approval to address where the application is inconsistent with or more information is needed to confirm conformance with the standards of the UDC. Any significant changes to the use or site plan will be required to conform with the applicable regulations of the district and the Conditional Use Permit must be amended to allow for the change. 7. This Conditional Use Permit meets the general and specific performance standards of the UDC. As required in 153.200.030 Subd. 5 (A) Industrial Park (I-P) Zoning District and 1530.300.030 Subd. 1 (J) Cannabis, Microbusiness, (H) Cannabis Businesses and Hemp Businesses, and (U) Light Manufacturing, Cannabis of the UDC. FURTHER BE IT RESOLVED that the following conditions of approval shall be met: 1. The CUP is granted only for the specific cannabis and lower-potency hemp edible uses approved and described in the application and staff report. 2. Any expansion, intensification, change in use, or addition of new conditional uses requires a CUP amendment or new CUP approval. 3. Development of the site shall be substantially consistent with the plans submitted to and reviewed by the City as part of this application, except where modifications are required by these conditions. 4. All exterior alterations, new structures, fencing, signage, exterior lighting, security requirements, and off-street parking and loading areas shall comply with any and all relevant standards adopted in the Unified Development Code and any other local, state, or federal standards and regulations. 5. Prior to commencing operations, the applicant shall submit to the City a written certification from a licensed mechanical engineer or qualified cannabis odor control consultant confirming that the odor mitigation system has been designed and sized appropriately for the facility’s square footage, air volume, anticipated terpene load, and noise generation. 6. The odor mitigation system shall cover all odor-generating spaces within the facility, including but not limited to cultivation rooms, drying rooms, curing rooms, trimming areas, packaging areas, and any extraction or processing rooms. 7. The operator shall maintain a written maintenance log documenting all inspections, filter replacements, and repairs to the odor mitigation system. This log shall be kept on site and made available to City staff or its designee upon request during any inspection. 8. The odor mitigation system shall be inspected by a qualified third party no less than once per calendar year. A written report of each inspection shall be submitted to the City within 30 days of completion. 9. If the odor mitigation system becomes non-operational for any reason, the operator shall notify the City within 24 hours and shall suspend any operations generating significant odors until the system is restored to full operation. 10. No retail sales, onsite consumption, or public access is permitted unless specifically approved through a future CUP amendment and all required state and local approvals. 11. All cannabis cultivation, processing, and manufacturing activities shall occur entirely indoors. No outdoor cultivation or processing is permitted. 12. Cannabis operations shall be limited to the approved square footage shown on the submitted site plan. 13. The facility shall maintain security measures consistent with state licensing requirements. Access to cannabis areas shall be restricted to authorized personnel only. 14. An approved fire department access system shall be installed prior to occupancy. 15. The facility shall be equipped with a functioning odor mitigation system, including carbon filtration and negative air pressure, which shall be maintained in working order at all times. 16. Hours of operation shall be limited to 8:00 a.m. to 6:00 p.m.. 17. Existing vegetation on site shall be maintained to the highest extent possible to provide screening. Landscaping and tree plantings shall be consistent with the submitted application and the Unified Development Code as well as the recommended tree species from the Minnesota Department of Natural Resources.. 18. The site shall utilize existing utility connections unless otherwise approved, and any proposed reuse or filtration systems shall comply with applicable health and environmental regulations, including those enforced by Washington County. 19. The applicant shall comply with all applicable local, county, state, and federal laws, rules, and regulations, including requirements of the Minnesota Office of Cannabis Management. 20. The applicant shall obtain and maintain all required licenses and permits prior to work on the site and maintain required licenses and permits for the duration of the use from local, state, and federal entities, including but not limited to the applicable state microbusiness license. 21. The applicant shall submit proof of valid site inspection or approval by the Office of Cannabis Management or authorized state officials to the City on an annual basis. 22. The City may revoke the Conditional Use Permit for the site if all permits and required work to comply with approvals from other local, state, and federal permits are not completed. 23. Failure to comply with any conditions of approval constitutes a zoning violation and may result in enforcement action or revocation of the Conditional Use Permit. 24. The conditional use permit shall expire without further action by the Planning Commission or the City Council, unless the applicant commences the authorized use within one year of the date of the condition use permit is issued or extended through the process described in 153.500.060 Subd. 1. (C) V. of the Unified Development Code. Whereupon, said Resolution is hereby declared adopted on this _____ day of April 2026. Steve Kronmiller, Mayor Joseph Whebbe, Applicant ATTEST: Kyle Morell, City Administrator 1 Kyle Morell From:Kyle Morell Sent:Monday, April 6, 2026 3:16 PM To:'Bailey Notch' Cc:Greenlee Dahle Subject:RE: Conditional Use Permit comments April 7th meeting Bailey, Thank you for your comments. I have responded with my comments below in blue. I will add this email to the Planning Commission packet, so they are aware of your concerns. Kyle H. Morell City Administrator City of Scandia 14727 209th Street North Scandia, MN 55073 Phone: 651.433.2274 Fax: 651-433-5112 Cell: 651.245.2654 Web: www.cityofscandia.com Email: k.morell@ci.scandia.mn.us From: Bailey Notch <baileynotch@gmail.com> Sent: Monday, April 6, 2026 11:11 AM To: mail <mail@ci.scandia.mn.us> Subject: Conditional Use Permit comments April 7th meeting Hello, I have quite a few questions and concerns for the Conditional Use Permit being discussed on April 7th. I have not participated or sat in on a hearing, so not sure how extensive/detailed this submission needs to be. Happy to cut out items as needed since I am sending the full list. My biggest concerns are a few discrepancies in the CUP/site plan/hearing announcement, potential impacts to the surrounding community, and odor control/containment/complaints. Below is the full list I have compiled, let me know if I can provide and context. Thank you, Bailey Notch 651-491-8031 2 Discrepancies in CUP/site plan/public hearing announcement Public hearing mentioned light manufacturing of low-potency hemp edibles, but that is not in the CUP, what is true? The applicant plans to manufacture both cannabis and lower-potency hemp edibles at the site. There is a discrepancy between the site map and the permit. Permit states that there will be no use of property outdoors, but the site map shows a compost shed. What is the correct answer? The applicant does plan to have a compost shed on site. It was installed by the current owners. The applicant does not plan to grow, sell, or manufacture cannabis or hemp related products outside. Community Concerns If odor becomes an issue, has the impact to the surrounding homes, restaurants, retail stores, and Scandia events (like Taco Daze) been considered? The applicant is required to have odor reducing filtration system on site. It is overseen and regulated by the Office of Cannabis Management (OCM). They are also planning on planting odor absorbing trees and shrubs on site. As with any agriculture, odor is inevitable. How does this benefit Scandia outside of taxes being paid? Benefit to the community is not an evaluation criteria. It is reviewed for compatibility with its zoning district and future land use designation. Is the owner local? I do not believe so, but it is not an evaluation factor. Will hiring be done locally? Unknown, but not something we regulate. Odor & Air Quality How will the city verify odor control is working? This is the responsibility of OCM. City code only requires compliance with OCM rules and regulations. A current condition of approval is to require annual proof of valid state inspections. Is there a complaint response process, and how quickly must issues be corrected? Complaints will be made to OCM if there is concern over the machinery not working. There are statutory timelines for response and investigation into complaints. Will there be regular inspections after approval? This is up to OCM. OCM conducts routine and unannounced inspections of licensed cannabis and hemp facilities, including security, operations, and odor mitigation systems. What measurable standard determines whether odor control is adequate? OCM enforces compliance through inspection criteria and corrective actions rather than local odor thresholds. Facilities must correct identified deficiencies to maintain licensure. 3 Why are trees only being added to the Southeast of the building? That is the only location the applicant has proposed planting trees. The Planning Commission can require additional plantings if they deem it appropriate. Security & Safety Will there be security cameras or alarm systems? OCM requires extensive security measures, including, but not limited to alarms, cameras and lighting. What other security measures are taking place outside of lights and just planning to install a chain link fence and powered gate? This is up to the applicant. City Code requires compliance with OCM security requirements. The OCM inspects and approves security measures during pre-licensure and ongoing monitoring. Fire Safety & Chemical Handling Are there any processes being done on site that warrant the fire department to review due to flammable substances or more dangerous processes? The Fire Department was asked for comment on the application. They were mostly concerned with ability to gain access to the building. The applicant stated they will install a fire department key box for emergency access. OSHA requires all flammable and dangerous substances to be labeled. The applicant stated there will be no flammables or combustibles on site, and none will be used in cultivation or manufacturing. Noise What is the expected noise level at property boundaries? Unknown. The applicant did not share details of the manufacturing process for cannabis or hemp edibles. The City does not have noise regulations that all properties are required to follow. Assuming the facility needs to be running 24/7, will there be generators or other equipment that will create excessive noise? A current condition of approval is hours of operation from 8 am to 6 pm. If approved with this condition, operation outside this window would violate the CUP and the applicant would risk being shut down. Do we have any existing local noise ordinances that might impact this? Yes. The City’s noise ordinance language can be found here. Waste Disposal 4 There is a discrepancy between the site map and the permit. Permit states that there will be no use of property outdoors, but the site map shows a compost shed. What is the correct answer? As stated previously, no outdoor growth, sales, or manufacturing of cannabis or hemp related products is planned. No permit is needed to have a compost site on the property. The existing shed is already on site and complies with City standards for accessory structures. If the compost shed is being used, how will they be mitigating odor? Unknown, the applicant has not shared information on what the compost site consists of, only its location on the property. Compliance & Enforcement Who enforces compliance—city staff or state regulators? The City enforces compliance with the CUP language and City codes. The State regulates everything related to the issuance of their license to operate. How can residents file complaints? Complaints to the City can be filed at City Hall. Complaints related to their operations should be filed with OCM. What penalties exist for violations? Violation of the CUP language can result in the CUP being revoked, which would only prohibit indoor cultivation and light manufacturing of cannabis and low-potency hemp edibles. OCM may issue corrective actions, fines, suspensions, or license revocation for violations of state laws or rules. Has the applicant operated other facilities, and do they have compliance history? Unknown. This is a new industry in Minnesota, if they have operated other facilities it is likely out of state. Buffer distances Less than 1,000 feet away from: o Meister’s, The Ozark Tavern, New Scandia Cafe, and Scandia Pizzeria o Elim church o Most retail businesses off of Olinda and the mall with the Post office o New osceola medical clinic o Houses on Oakhill (some with children and pets) o Houses on Ozark ave Between 1,000 and 2,000 feet away from: o City hall/community center o playground o Pickleball/tennis courts o Skate park/ice rink o Gammelgarden o Other parks State regulations, should not be: 5 o Within 1,000 feet of a school o Within 500 feet of daycare centers, parks, or youth facilities The State gave cities the ability to establish buffer zones specific to each city. The Council decided to view the manufacturing and sale of cannabis in the same light as alcohol and tobacco. The City does not have buffer zones on the sale or alcohol and tobacco, and therefore did not place any on cannabis. The proposed facility meets all applicable state buffer standards for schools, parks, and daycare and youth facilities. 1 TJ Hofer From:Mary Cullen <mary@thecullengrp.com> Sent:Tuesday, April 14, 2026 7:40 AM To:Greenlee Dahle Cc:TJ Hofer Subject:Re: CUP Categories:Filed by Newforma *** WARNING: This email is from outside the company. Proceed with Caution*** i This message needs your attention This is their first mail to some recipients. Mark as Safe Report this Email Bolton & Menk - Powered by Mimecast Thanks Greelee and welcome back TJ and congratulations on the new baby! Would 12:30 work? I think I can make that work — or after 3:00 p.m. I wanted to bring to your attention questions related to water usage and discharge and how the fact that this facility has the original septic and a private well plays into our evaluation of the CUP application. During the Planning Commission walk through of the property the real estate broker (representing the owner) told me that the property has the original septic, that it was not going to be inspected as part of the sale. He said that in commercial transactions an “inspection” was at the discretion of the buyer and the buyer did not want the septic inspected. The property draws its water from a private well. The applicant claims that its operation will be like a medical grade laboratory, the equipment will be state of the art and that 90% of its water usage will be reused. As far as I can tell there has been no real evaluation of these claims and there was no discussion at the Planning Commission meeting of water usage and discharge and the effect of both on the community and environment. Even if the 90% reuse claim is true, the amount of water a 5000 sq ft indoor cannabis cultivation operation will actually use is huge. Research published by the Resource Innovation Institute, New Frontier Data, and the Berkeley Cannabis Research Center found that, on average, indoor cannabis facilities use 209 gallons per square foot per year for irrigation. Applied to 5,000 square feet, that yields a baseline estimate of roughly 1,045,000 gallons per year — over one million gallons annually, or approximately 2,863 gallons per day from the well, before any recapture is factored in. That is a very significant draw on a private well. Even using a more conservative estimate — indoor facilities on the RII's Cannabis PowerScore platform averaged 198 gallons per square foot per year — you still land at approximately 990,000 gallons per year on 5,000 square feet. 2 Beyond irrigation, the facility will also use water for HVAC humidification, cleaning and sanitation, restrooms, and potentially edibles manufacturing — all additive to the irrigation demand. The applicant’s claim that it will “recapture and reuse 90% of the water” – while that is technically possible with the right systems, it is not a given and considering the age and condition of the building and the cost of the equipment and cost for upgrades to the building, it is unlikely that this applicant group has the resources necessary to do what they claim. Some high level research on water usage and recapture in cannabis operations indicates that cannabis plants eject about 90% of the water they take in through the process of transpiration, putting the fertigation water right back into the grow room air where it is absorbed by dehumidifiers. That must be the basis for the 90% claim — the plants themselves return water to the air, which dehumidification systems can capture as condensate. Research indicates that 90% recapture is achievable — but only with a purpose-built, sealed grow room equipped with high-capacity dehumidification, condensate capture tanks, and reverse osmosis retreatment of that condensate before reuse. Most grow rooms simply dump this condensate down the drain -- recapture requires deliberate and expensive infrastructure investment. There is no evidence that this applicant can or will manage this in a way to support that claim. Mary 651-300-8421 www.thecullengrp.com On Apr 13, 2026, at 2:10 PM, Greenlee Dahle <Greenlee.Dahle@bolton-menk.com> wrote: Hi Mary, I am not available today, but I can call tomorrow, Wednesday, or Thursday. Do you have a time that works best? TJ returned from paternity leave today. Since he has some experience with Scandia's cannabis ordinance, and other cannabis uses, he would like to be included in the conversation. The CUP is scheduled for the City Council meeting on Tuesday, April 21. Thank you and let me know if you have any questions. Greenlee Dahle (651) 420-4103 <img_5eecf401-440c-445d-950e-a6a7ee753e79.png> 3 <img_d3f898cb- e6ad-477e-afe5- 5053700b9843.png> Greenlee Dahle (she/her/hers) Community Planner Bolton & Menk, Inc. <img_4b682a9f-6453- 4c3d-a67d- dcf08c90cf3d.png> (651) 420-4103 From: Mary Cullen <mary@thecullengrp.com> Sent: Monday, April 13, 2026 5:18 AM To: Greenlee Dahle <Greenlee.Dahle@bolton-menk.com> Subject: CUP *** WARNING: This email is from outside the company. Proceed with Caution*** Greenlee, do you have a minute to connect today? I wanted to see the revised CUP with the additional conditions and I had a couple questions on that. When will the City Council take this up? Will you send me your number and a good time to call or just give me a call. I’m generally available this morning then again late afternoon. Thanks. Mary www.thecullengrp.com 651-300-8422 Get Outlook for iOS 1 MARY CULLEN’S COMMENTS REGARDING ODOR CONDITION AND PROPOSED ADDITIONAL CONDITIONS April 7, 2026 PROPOSED CONDITION RELATING TO ODORS: “The facility shall be equipped with a functioning odor mitigation system, including carbon filtration and negative air pressure, which shall be maintained in working order at all times.” The proposed condition reflects industry-standard practice. Carbon filtration combined with negative air pressure is the most widely used and effective approach to odor control in indoor cannabis cultivation and manufacturing. When properly designed, installed, and maintained, this combination can eliminate most cannabis-related odors before air exits the facility. However, the condition as drafted has several limitations that could make enforcement difficult and leave gaps in protection for neighboring properties. Specifically: • The condition does not specify that the system must be properly sized for the facility – a functioning but undersized system will not adequately control odors. • The condition does not identify which spaces must be covered. Drying, curing, trimming, and packaging areas can produce as much or more odor than cultivation rooms All spaces must be covered. • There is no mechanism for the City to verify compliance. The condition relies on the operator to self-report problems. • Carbon filters degrade over time and lose effectiveness when saturated or in high- humidity conditions. The condition does not require documentation that filters are being replaced on schedule. • There is no complaint response protocol requiring the operator to respond and document corrective action if odor problems are reported. I’M RECOMMENDING ADDITIONAL CONDITIONS TO ADDRESS THESE LIMITATIONS: a) Engineering Certification. Prior to commencing operations, the applicant shall submit to the City a written certification from a licensed mechanical engineer or qualified cannabis odor control consultant confirming that the odor mitigation system has been designed and sized appropriately for the facility’s square footage, air volume, and anticipated terpene load. 2 b) Full Facility Coverage. The odor mitigation system shall cover all odor-generating spaces within the facility, including but not limited to cultivation rooms, drying rooms, curing rooms, trimming areas, packaging areas, and any extraction or processing rooms. c) Maintenance Log. The operator shall maintain a written maintenance log documenting all inspections, filter replacements, and repairs to the odor mitigation system. This log shall be kept on site and made available to City staff or its designee upon request during any inspection. d) Annual Inspection. The odor mitigation system shall be inspected by a qualified third party no less than once per calendar year. A written report of each inspection shall be submitted to the City within 30 days of completion. e) Odor Complaint Response Protocol. If the City receives a verified odor complaint attributable to the facility, the operator shall respond in writing within 48 hours documenting the status of the odor mitigation system and any corrective actions taken or planned. Repeated verified complaints may be grounds for review of the CUP. f) System Failure Notification. If the odor mitigation system becomes non-operational for any reason, the operator shall notify the City within 24 hours and shall suspend any operations generating significant odors until the system is restored to full operation. g) OCM License Condition. No cannabis cultivation or manufacturing operations shall commence until the applicant has provided the City with proof of a valid, active license issued by the Minnesota Office of Cannabis Management for the specific license types applicable to the proposed operations. 1 | P a g e Date of Meeting: April 7, 2026 To: Chair Loeffler and Members of the Planning Commission From: Greenlee Dahle, Consultant City Planner Re: Conditional Use Permit (CUP) for Indoor Cannabis Cultivation and Light Manufacturing of Cannabis and Lower-Potency Hemp Edibles Applicant: Joe Whebbe Zoning: Industrial Park (I-P) Owner: Royal Stirling, LLC Future Land Use: Village Mixed Use Location: 21080 Ozark Ct N PID 14.032.20.43.0013 Review Deadline May 16, 2026 (60 days) The applicant is requesting approval for a Conditional Use Permit (CUP) to allow for the indoor cultivation of cannabis and the light manufacturing of cannabis and lower-potency hemp edibles at 21080 Ozark Ct N. BACKGROUND The current site is approximately 2.52 acres in the Industrial Park (I-P) zoning district. The 2040 Future Land Use Map’s current guidance for this area is Village Mixed Use. There are no special overlay districts or wetlands on the subject property. The CUP request is for three conditional uses in the I-P zoning district. A state microbusiness license authorizes these uses (upon City approval). The applicant proposes to use all aspects of their microbusiness license except for retail sales. 2 | P a g e State of Minnesota Authority All cannabis and lower-potency hemp edible (LPHE) operations are regulated by the Minnesota Office of Cannabis Management (OCM) under Minnesota Statutes, Chapter 342, and Minnesota Rules, Chapter 9810. Prior to final licensure, OCM must receive certification from the City that the proposed business complies with all applicable local zoning regulations and, where applicable, state fire and building codes. State law allows local governments to regulate the time, place, and manner of cannabis and LPHE businesses, provided such regulations do not prohibit the establishment or operation of cannabis businesses. Indoor cannabis cultivation and light manufacturing uses are commonly located in industrial zoning districts and are subject to state requirements related to security, product tracking, inspections, and testing. Local zoning approval does not authorize retail sales. Cannabis and LPHE sales require a separate retail license or endorsement issued by the OCM and a local retail registration issued by the City. EVALUATION OF REQUEST The 2040 Comprehensive Plan intends for development in the Industrial Park and Village Mixed Use areas to accommodate employment and business opportunities. The Zoning and Future Land Use Maps are added as attachments to this report. Existing Conditional Uses There was a Conditional Use Permit (CUP) issued for the subject property in 1995, and amendments were approved to the CUP in 1997, 2008, 2015, and 2018. The most recent amendment was to allow for expansion to the building, along with storage use. The 5,800 sq ft addition was completed and now the facility is approximately 11,815 sq ft in gross floor area. Pursuant to the City’s Unified Development Code (UDC) Sec. 153.500.060(C)V., the sale of the property and proposed land uses associated with this request constitute a significant change requiring a new CUP for the site. This CUP would replace the permit under Resolution No. 05- 15-18-03. Proposed Conditional Uses The applicant is requesting CUP approval for the following uses in the I-P zoning district: 1. Agriculture, Commercial Indoor Cannabis. a. Indoor cultivation of cannabis plants. b. No outdoor cultivation proposed or allowed. 2. Light Manufacturing, Lower-Potency Hemp Edible (LPHE). a. Processing, production, and packaging lower-potency hemp edibles. b. No retail sales or onsite consumption proposed. 3. Light Manufacturing, Cannabis. a. Processing, production, and packaging of cannabis products. b. No retail sales or onsite consumption proposed. Permitted Uses 3 | P a g e The following uses are allowed by right in the I-P zoning district, and are authorized under the applicant’s state microbusiness license, but are not subject to the conditions of this CUP request: 1. Cannabis, Microbusiness. 2. Lower-Potency Hemp Edible sales. 3. Wholesaling, Cannabis. The applicant has stated that they would not offer retail sales at this location. Cannabis sales and LPHE sales are permitted in the I-P zoning district, but retail activities require: a retail license or endorsement from OCM and a local retail registration issued by the City. Staff are proposing a condition of approval that would require future approvals from the City for retail sales of cannabis or LPHE products on site (registration and CUP amendment). Conditional Use Permit Chapter 153.500.060 Subd. 1(C)(I) of the UDC lists the general standards to meet to grant a CUP or IUP. The standards are listed below in italics, followed by the staff’s findings: 1. The proposed use will be in compliance with and shall not have a negative effect upon the Comprehensive Plan, including public facilities and capital improvement plans. Objectives of the Comprehensive Plan include encouraging development that is compatible with surrounding land uses, protects natural resources, and efficiently utilizes existing infrastructure. The proposed uses comply with the Comprehensive Plan and will not have a negative effect on public facilities or capital improvement plans. 2. The establishment, maintenance or operation of the proposed use will promote and enhance the general public welfare and will not be detrimental to or endanger the public health, safety, morals or comfort. The proposed uses are allowed in the I-P zoning district with a Conditional Use Permit. The proposed uses would operate indoors, utilizing the existing facility, isolated from public access, and are subject to state licensing, security, inspection, and tracking requirements. These uses will not negatively impact public welfare and will not be detrimental to or endanger the public health, safety, morals, or comfort. Reasonable conditions of approval can be added if the City Council finds issues with proposed uses. 3. The proposed use will not be injurious to the use and enjoyment of other property in the immediate vicinity for the purposes already permitted, nor substantially diminish and impair property values or scenic views. The proposed uses will not be injurious to the use and enjoyment of other property in the immediate vicinity for the purposes already permitted, nor substantially diminish and impair property values or scenic views. 4. The establishment of the proposed use will not impede the normal and orderly development and improvement of surrounding property for uses permitted in the district. The proposed uses will not impede development or improvement of surrounding properties. 4 | P a g e 5. Adequate public facilities and services are available or can be reasonably provided to accommodate the use which is proposed. The proposed uses will utilize existing utility services and do not require an extension of city-owned public facilities. The applicant has also proposed filtration systems to minimize water and electricity use. 6. The proposed use shall conform to the applicable regulations of the district in which it is located and all other applicable standards of this Chapter. The proposed uses are consistent with the applicable regulations of the I-P zoning district and all other applicable standards of the UDC. 7. The proposed use complies with the general and specific performance standards as specified by this Section and this Chapter. This Conditional Use Permit meets the general and specific performance standards of the UDC. As required in 153.200.030 Subd. 5 (A) I. of the UDC, all other standards and regulations of the I-P base zoning district are met. Site Plan Review A site plan is included in the application and provided as an attachment to this report. Architectural Design Standards The subject property is within the Character Area: Business Districts, which includes the Industrial Park (I-P) zoning district. Architectural and character area standards applicable to the site are established in Sec. 153.400.040 of the UDC. The existing building is constructed of professionally designed pre-cast textured concrete and is consistent with the architectural materials, scale, and appearance of other development within the Industrial Park. The existing structure is compatible with surrounding development and complies with the applicable character area design standards for the Business Districts. The applicant proposes to utilize the existing building, along with a proposed future building addition, for all cannabis cultivation and light manufacturing activities. No changes to the primary exterior materials or architectural character of the principal structure are proposed as part of this request. Lot Standards The parcel is approximately 2.52 acres in size and does not contain any wetlands or special zoning overlays. The existing site is generally consistent with the dimensional standards of the I- P zoning district. Minimum requirements, including setbacks and lot frontage, are satisfied. The relevant dimensional standards of the subject property are detailed below: I-P Existing Conditions Minimum Lot Size (ac.) 2.00 2.52 Lot Frontage (ft.) 160 199 5 | P a g e I-P Existing Conditions Principal and Accessory Structure Setbacks (ft.) Front 40 141 Side 10 22 Rear 50 263 Maximum Lot Coverage 65% 23% Maximum Building Height (ft.) 45 32 The existing building is approximately 11,815 sq ft and serviced by all required utilities. The proposed expansion is approximately 4,980 sq ft on the rear/south end of the facility. Additionally, there is a 300 sq ft compost shed in the rear yard. Utilities & Air Filtration The proposed uses will be serviced by current connections to public utilities. The application proposes operations that utilize “live soil” and process or reuse 100% of the plant material. Water reuse is also described in the application: approximately 90% of all water used will be recaptured and filtered for reuse in the growth process. At 5,000 sq ft of canopy, the proposed scale of cannabis cultivation and processing are not anticipated to result in negative impacts to public utilities. Odor control for indoor cannabis cultivation and manufacturing is regulated at the state level. The applicant proposes to install and maintain a closed-air HVAC system designed to operate under negative air pressure, meaning that air is drawn into the building rather than expelled out through openings. Exhaust air from cultivation and manufacturing areas will be treated through activated carbon filtration prior to discharge. These systems are designed to absorb odors before air is released from the building, and also to protect the plants from pathogens. The applicant visited the site and stated the HVAC and carbon filtration systems will be designed and maintained in working order at all times. The proposed utility, filtration, and ventilation systems are consistent with state standards and subject to final approval and inspections by the OCM. A condition of approval is recommended to require the applicant to submit proof of valid inspection or approval by the OCM or authorized state officials to the City on an annual basis. Streets, Access, and Parking The proposed uses will utilize the existing access from Ozark Ct N, a city-owned road. The parking and driving areas are currently paved and approximately 150 ft in length from the roadway to the front of the building and shipping door. The application stated that there will be no customers on-site. Activity will be limited to employees, inspectors, and discreet, unmarked deliveries. The anticipated number of deliveries is 0-10 times per day. For industrial uses, parking is required to be provided at a rate of 1 space per 2 employees on maximum shift or 1 space per 2,000 sq ft of gross floor area, whichever is greater. The application stated that 1-12 employees will be on site during business hours. The gross floor area of the existing structure is 11,815 sq ft. Both measures would require 6 spaces. The proposed addition is 4,980 sq ft, which would require an additional 2.5 (or 3) spaces. The current parking 6 | P a g e area has 14 parking spaces. If the building expansion is greater than 4,980 sq ft, or if the number of employees increases, additional parking spaces may be required. A CUP amendment is required for any new land uses that would require additional parking. Staff have determined that the proposed uses meet the parking requirements outlined in Table 153.400.080-1, and within other sections of the UDC. Staff also determined that the driveway meets emergency access requirements from the City’s engineering standards adopted in 2025. Landscaping and Screening Table 153.400.060-1 of the UDC establishes landscaping requirements for industrial uses and requires 10 trees or 1 tree per 1,000 sq of gross floor area, whichever is greater. There are several live trees around the parking areas currently. The site is also wooded along the south and east property boundary, which is the corner closest to residential properties and the area planned for expansion. The application proposes planting between 8 and 15 trees on the southeast corner of the lot. Tree spacing would be approximately 6-12 ft apart depending on the species. The list of species includes White Pine, Balsam Fir, White Spruce, and Lilac. The applicant noted that these trees are known to absorb odors and give off natural fragrances. Staff believe the existing vegetation on the site meets the requirements of Sec. 153.400.060 Subd. 3., and other standards within the UDC. Staff recommend a condition of approval to maintain existing vegetation to the highest extent possible and to plant trees consistent with the submitted application. Lighting & Security Plan Security measures for cannabis cultivation and manufacturing facilities are regulated by the OCM. State rules require cannabis businesses to maintain comprehensive security systems, including controlled access, alarm systems, surveillance, and lighting, to prevent unauthorized access. The proposed site plan includes an 8 ft fence. The application states that the facility will operate entirely indoors and that all exterior doors will be secured. Access will be limited to authorized personnel only. Buildings will remain locked outside of business hours, and security systems will be maintained in working order as required by OCM. Exterior lighting will be located at building entrance points. Sec. 153.400 Subd. 4 of the UDC establishes standards regarding exterior lighting. All outdoor lighting must contain shielding and direct light at an angle of 90 degrees or less. The application states that exterior lighting will be downcast, located at all entrance points, and motion detector activated. Indoor lighting will be in closed rooms with no windows. The Fire Department reviewed the proposal and requested confirmation that applicable fire codes will be met and reasonable access will be provided for emergency response. The applicant has stated their intent to comply will all applicable safety and fire codes and to install an approved fire department access system. Staff determined the lighting and security plan to be consistent with the UDC and state requirements. Staff recommend a condition of approval that lighting and security must be 7 | P a g e compliant with both state requirements and the local UDC. Staff also recommend requiring installation of the approved fire department access system prior to occupancy. Fencing The site plan proposes an 8 ft chain link fence surrounding the building. The proposed fence setback is at least 140 ft from the front property boundary, at least 20 ft from the side property boundaries, and at least 100 ft from the rear property boundary. The proposed fence is behind the building frontage. Staff determined the fence to meet all required setbacks. Any fence over 6 ft in height requires a building permit and administrative permit. Staff recommend a condition of approval to allow an 8 ft fence outside of all required setbacks and subject to the height limitations in Sec. 153.400.060 of the UDC. ANALYSIS Review Comments The submittal was sent to city staff and other regulatory agencies for review and comment. Engineering Department The Engineering Department had no comment. Public Works Department The Public Works Director had no comment. Washington County Washington County had no comment. Fire Department The Fire Chief provided the following comments/questions: The only questions I have are whether they meet fire codes for this type of business and whether they provide a fire department key box or a key holder with a short response 8 | P a g e time. These steel buildings are difficult to enter, and if they lack windows for investigation, we require reasonable access. The applicant provided the following responses to the Fire Chief: Yes, we intend to meet fire code as required. In addition, there will be no flammables or combustibles on site. None will be used in any of the cultivation or manufacturing. As far as a fire dept key box, yes we intend on installing that as well. The Fire Department did not provide any other comments or questions. Staff Analysis Staff find the proposed uses to be consistent with the 2040 Comprehensive Plan and the intent of the Industrial Park (I-P) zoning district. The proposed building expansion and site plan are compliant with applicable Unified Development Code standards, and the proposal meets the findings required for approval of a Conditional Use Permit. COMMISSION ACTION The Planning Commission has the following options: 1. Recommend approval, with or without conditions, of the attached resolution. 2. Recommend denial, with findings, of the attached resolution. 3. Table the request for further review (may need to extend 60-day deadline). RECOMMENDATION Staff recommend the Planning Commission recommend that the City Council approve the request for Conditional Use Permit (CUP) for commercial indoor cannabis cultivation, light manufacturing of cannabis, and light manufacturing of lower-potency hemp edibles. Approval includes adoption of a resolution. The above findings and following conditions of approval are recommended: 1. The CUP is granted only for the specific cannabis and lower-potency hemp edible uses approved and described in the application and staff report. 2. Any expansion, intensification, change in use, or addition of new conditional uses requires a CUP amendment or new CUP approval. 3. Development of the site shall be substantially consistent with the plans submitted to and reviewed by the City as part of this application, except where modifications are required by these conditions. 9 | P a g e 4. All exterior alterations shall comply with the City’s Architectural Design Standards. Any new accessory structure shall be designed to be compatible with the principal structure in architectural style, material, and color, consistent with Sec. 153.400.040. 5. The applicant shall comply with all applicable local, county, state, and federal laws, rules, and regulations, including requirements of the Minnesota Office of Cannabis Management. 6. The applicant shall obtain and maintain all required licenses and permits for the duration of the use, including but not limited to the applicable state microbusiness license. 7. No retail sales, onsite consumption, or public access is permitted unless specifically approved through a future CUP amendment and all required state and local approvals. 8. All cannabis cultivation, processing, and manufacturing activities shall occur entirely indoors. No outdoor cultivation or processing is permitted. 9. Cannabis operations shall be limited to the approved square footage shown on the submitted site plan. 10. The facility shall maintain security measures consistent with state licensing requirements. Access to cannabis areas shall be restricted to authorized personnel only. 11. An approved fire department access system shall be installed prior to occupancy. 12. The facility shall be equipped with a functioning odor mitigation system, including carbon filtration and negative air pressure, which shall be maintained in working order at all times. 13. Hours of operation shall be limited to 8:00 a.m. to 6:00 p.m.. 14. Existing vegetation on site shall be maintained to the highest extent possible to provide screening. Landscaping and tree plantings shall be consistent with the submitted application and the Unified Development Code. 15. Any fence exceeding six feet in height shall require applicable administrative and building permits and meet the standards of Sec. 153.400.060 of the Unified Development Code. 16. Security fencing shall be maintained in good condition at all times. 17. Signage shall meet the standards of Sec. 153.400.100 of the Unified Development Code. 18. Exterior lighting shall be downcast, shielded, and compliant with the Unified Development Code and applicable state security requirements. Lighting shall not produce glare onto adjacent properties or public rights-of-way. 19. The site shall utilize existing utility connections unless otherwise approved, and any proposed reuse or filtration systems shall comply with applicable health and environmental regulations, including those enforced by Washington County. 20. Parking and deliveries shall be provided and managed in compliance with the Unified Development Code. Deliveries shall not obstruct traffic or emergency access. 21. The applicant shall secure any and all applicable and necessary permits required from local, state, and federal entities prior to work on the site. 10 | P a g e 22. The applicant shall submit proof of valid site inspection or approval by the Office of Cannabis Management or authorized state officials to the City on an annual basis. 23. The City may revoke the Conditional Use Permit for the site if all permits and required work to comply with approvals from other local, state, and federal permits is not completed. 24. Failure to comply with any conditions of approval constitutes a zoning violation and may result in enforcement action or revocation of the Conditional Use Permit. 25. The conditional use permit shall expire without further action by the Planning Commission or the City Council, unless the applicant commences the authorized use within one year of the date of the condition use permit is issued or extended through the process described in 153.500.060 Subd. 1. (C) V. of the Unified Development Code. Attachments A. Draft Resolution 04-07-2026-XX Approving a Conditional Use Permit B. Site Maps – Zoning & Future Land Use C. Application D. Site Plan E. Ordinance No. 2024-09 Regarding Cannabis Uses and Standards CITY OF SCANDIA, MINNESOTA RESOLUTION NO. 04-17-26-XX APPROVING CONDITIONAL USE PERMIT FOR PID 1403220430013 LOCATED AT 21080 OZARK COURT NORTH WHEREAS, Joseph Whebbe (the “applicant”) made an application for a Conditional Use Permit, to allow for the indoor cultivation of cannabis, light manufacturing of cannabis, and light manufacturing of lower-potency hemp edibles, located at 21080 Ozark Court North and the property legally described as follows (the “subject property”): Hawkinson Business Park, Lot 6 Block 1, Subdivision Cd91292 WHEREAS, the subject property is zoned as Industrial Park (I-P) District; and WHEREAS, the City of Scandia Unified Development Code (UDC) conditionally permits the indoor cultivation of cannabis, light manufacturing of cannabis, and light manufacturing of lower-potency hemp edibles in the I-P District; and WHEREAS, Section 153.500 of the City of Scandia UDC governs conditional use permits, and the process; and WHEREAS, staff reviewed the submittal and applicable UDC standards and determined the Conditional Use Permit (CUP) application to be complete on March 18, 2026; and WHEREAS, staff recommended approval of the CUP request with conditions; and WHEREAS, the Planning Commission reviewed the request for the Conditional Use Permit (CUP) at a duly noticed Public Hearing on April 7, 2026, and recommended that the City Council approve the CUP, with conditions. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF SCANDIA, WASHINGTON COUNTY, MINNESOTA, that it approves of a Conditional Use Permit to allow for the indoor cultivation of cannabis, light manufacturing of cannabis, and light manufacturing of lower-potency hemp edibles located at 21080 Ozark Court North, based on the following findings: 1. Objectives of the Comprehensive Plan include encouraging development that is compatible with surrounding land uses, protects natural resources, and efficiently utilizes existing infrastructure. The proposed uses comply with the Comprehensive Plan and will not have a negative effect on public facilities or capital improvement plans. 2. The proposed uses are allowed in the I-P zoning district with a Conditional Use Permit. The proposed uses would operate indoors, utilizing the existing facility, isolated from public access, and are subject to state licensing, security, inspection, and tracking requirements. These uses will not negatively impact public welfare and will not be detrimental to or endanger the public health, safety, morals, or comfort. Reasonable conditions of approval can be added if the City Council finds issues with proposed uses. 3. The proposed uses will not be injurious to the use and enjoyment of other property in the immediate vicinity for the purposes already permitted, nor substantially diminish and impair property values or scenic views. 4. The proposed uses will not impede development or improvement of surrounding properties. 5. The proposed uses will utilize existing utility services and do not require an extension of city-owned public facilities. The applicant has also proposed filtration systems to minimize water and electricity use. 6. The proposed uses are consistent with the applicable regulations of the I-P zoning district and all other applicable standards of the UDC. 7. This Conditional Use Permit meets the general and specific performance standards of the UDC. As required in 153.200.030 Subd. 5 (A) I. of the UDC, all other standards and regulations of the I-P base zoning district are met. FURTHER BE IT RESOLVED that the following conditions of approval shall be met: 1. The CUP is granted only for the specific cannabis and lower-potency hemp edible uses approved and described in the application and staff report. 2. Any expansion, intensification, change in use, or addition of new conditional uses requires a CUP amendment or new CUP approval. 3. Development of the site shall be substantially consistent with the plans submitted to and reviewed by the City as part of this application, except where modifications are required by these conditions. 4. All exterior alterations shall comply with the City’s Architectural Design Standards. Any new accessory structure shall be designed to be compatible with the principal structure in architectural style, material, and color, consistent with Sec. 153.400.040. 5. The applicant shall comply with all applicable local, county, state, and federal laws, rules, and regulations, including requirements of the Minnesota Office of Cannabis Management. 6. The applicant shall obtain and maintain all required licenses and permits for the duration of the use, including but not limited to the applicable state microbusiness license. 7. No retail sales, onsite consumption, or public access is permitted unless specifically approved through a future CUP amendment and all required state and local approvals. [GD1.1] 8. All cannabis cultivation, processing, and manufacturing activities shall occur entirely indoors. No outdoor cultivation or processing is permitted. 9. Cannabis operations shall be limited to the approved square footage shown on the submitted site plan. 10. The facility shall maintain security measures consistent with state licensing requirements. Access to cannabis areas shall be restricted to authorized personnel only. 11. An approved fire department access system shall be installed prior to occupancy. 12. The facility shall be equipped with a functioning odor mitigation system, including carbon filtration and negative air pressure, which shall be maintained in working order at all times. 13. Hours of operation shall be limited to 8:00 a.m. to 6:00 p.m.. 14. Existing vegetation on site shall be maintained to the highest extent possible to provide screening. Landscaping and tree plantings shall be consistent with the submitted application and the Unified Development Code. 15. Any fence exceeding six feet in height shall require applicable administrative and building permits and meet the standards of Sec. 153.400.060 of the Unified Development Code. 16. Security fencing shall be maintained in good condition at all times. 17. Signage shall meet the standards of Sec. 153.400.100 of the Unified Development Code. 18. Exterior lighting shall be downcast, shielded, and compliant with the Unified Development Code and applicable state security requirements. Lighting shall not produce glare onto adjacent properties or public rights-of-way. 19. The site shall utilize existing utility connections unless otherwise approved, and any proposed reuse or filtration systems shall comply with applicable health and environmental regulations, including those enforced by Washington County. 20. Parking and deliveries shall be provided and managed in compliance with the Unified Development Code. Deliveries shall not obstruct traffic or emergency access. 21. The applicant shall secure any and all applicable and necessary permits required from local, state, and federal entities prior to work on the site. 22. The applicant shall submit proof of valid site inspection or approval by the Office of Cannabis Management or authorized state officials to the City on an annual basis. 23. The City may revoke the Conditional Use Permit for the site if all permits and required work to comply with approvals from other local, state, and federal permits is not completed. 24. Failure to comply with any conditions of approval constitutes a zoning violation and may result in enforcement action or revocation of the Conditional Use Permit. 25. The conditional use permit shall expire without further action by the Planning Commission or the City Council, unless the applicant commences the authorized use within one year of the date of the condition use permit is issued or extended through the process described in 153.500.060 Subd. 1. (C) V. of the Unified Development Code. Whereupon, said Resolution is hereby declared adopted on this _____ day of April 2026. Steve Kronmiller, Mayor Joseph Whebbe ATTEST: Kyle Morell, City Administrator 37 6.2 © Bolton & Menk, Inc - Web GIS 0 Legend Site Map This drawing is neither a legally recorded map nor a survey and is not intended to be used as one. This drawing is a compilation of records, information, and data located in various city, county, and state offices, and other sources affecting the area shown, and is to be used for reference purposes only. The City of Scandia is not responsible for any inaccuracies herein contained. Disclaimer: 4/3/2026 10:11 AM 263 Feet Parcels 01/19/2026 Lot Lines Right of Way Zoning Agricultural Core Agricultural Preserves Rural Residential General Village Neighborhood Rural Commercial Rural Residential Neighborhood Village Historic Core Village Center Open Space - Planned Unit Development Industrial Park Aerials2025 Red: Band_1 Green: Band_2 Blue: Band_3 37 6.2 © Bolton & Menk, Inc - Web GIS 0 Legend Site Map This drawing is neither a legally recorded map nor a survey and is not intended to be used as one. This drawing is a compilation of records, information, and data located in various city, county, and state offices, and other sources affecting the area shown, and is to be used for reference purposes only. The City of Scandia is not responsible for any inaccuracies herein contained. Disclaimer: 4/3/2026 10:17 AM 263 Feet Parcels 01/19/2026 Lot Lines Right of Way Future Land Use Agricultural Core Area General Rural Mining St Croix River Corridor Area Open Water Railway Recreation Area Protected Rural Commercial Rural Mixed Use Village Mixed Use Village Neighborhood Aerials2025 Red: Band_1 Green: Band_2 Blue: Band_3 Docusign Envelope ID: 3F9135BC-A49C-4C83-8C2B-98D340F2571D 6125082349 suttjh58@gmail.com Docusign Envelope ID: 3F9135BC-A49C-4C83-8C2B-98D340F2571D 3/16/2026 Description of Request We request a conditional use permit to cultivate, manufacture and wholesale indoor grown cannabis, in compliance with all Minnesota Statutes and Rules and all regulations set for by the OƯice of Cannabis Management. Operation Overview - Methodology: We utilize "live soil" that is amended rather than cycled out, which significantly reduces waste. We also plan to process or reuse 100% of the plant material. - Environmental Controls: The facility will feature a closed-air carbon filtration system with negative air pressure at all entrances. This protects the plants from pathogens and ensures that no odors leave the building. - Water Usage: We will recapture and filter approximately 90% of all water used for reuse in the growth process. - Discretion: The operation will function similarly to a controlled laboratory. We intend to have no exterior signage and maintain a very discreet profile. Facility and Scale - Current Space: We plan to utilize the existing building for cultivation, processing, and storage. Our license allows for up to 5,000 sq. ft. of canopy. - Proposed Addition: We are interested in a potential 3,000-5000 sq. ft. addition to the rear of the building for extra storage and processing. -Property use outside of the building: There will be no outdoor storage of containers, pallets, or waste. The yard and lot will be aesthetically pleasing with landscaping and just mostly used for employee parking. Logistics and Staffing - Hours: Estimated at 8:00 AM to 6:00 PM. - Employees: Between 1 and 12 employees will be on-site during business hours. - Traffic: There will be no customers on-site. Activity will be limited to employees, inspectors, and discreet, unmarked deliveries. We anticipate delivers to be taken 0-10 times per day. - Utilities: Our impact on sewage and water systems will be minimal due to our recycling processes. Site Improvements - Security: We plan to install a chain-link fence with a powered gate. We are open to additional screening as required by the city, but all of our operations will be contained inside. - Parking: We will utilize the existing lot at the side and rear of the building for employee parking. -Potential for future addition: See Attached Site Plan. -Exterior Lighting: While in compliance with State and Local regulations, our lighting will ensure security, safety, and compatibility with neighboring properties, focusing on surveillance, visibility, and reducing light pollution. Lights will be downward facing, located at all building and yard entrance points and motion detector activated. On a side note, the light used in the cultivation process will be in closed rooms with no windows, rendering it impossible to escape the building. -Additional Screening: We plan to plant some odor absorbing coniferous trees along the southeast corner of the property as indicated on the Site Plan. Tree species and spacing- White Pine, Balsam Fir, White Spruce, and Lilac. (These trees are known to absorb odors while giving off their own natural fragrance.) Tree spacing on the southeast side will be approx. 6’-12’ apart depending on species. The total number of trees planted on the southeast border will be between 8 and 15. Stormwater/Runoff -The proposed operations will utilize the existing building on site and be indoors. There are no changes planned to the existing grading, stormwater plans, or landscaping plans, other than potential tree plantings to be used as a buƯer and screening. Proposed Schedule - Now – Mid-May: Obtain CUP and close on the property. - May – August: Interior build-out and landscaping (planting of trees). - August onward: Commencement of cultivation and processing. -Spring of 2027: Exterior addition of additional cultivation rooms. Property Line8' Chainlink FenceSecurity Gate 141' 179' 60' 100' 8' Chainlink Fence 8' Chainlink FencePotential Addition Existing Building 70' 550' 199' Existing Lot and Drive 10' x 25' Compost Shed 72'83'24' Shipping Door 11,815 S.F. 4980 S.F. 21080 Ozark Ct N Scandia, MN 55073 Contact: Joe Whebbbe 651-283-3651 SITE PLAN LOT 6, BLOCK 1 Hawkinson Business Park Washington County 20' 155' Screening: Odor absorbing trees- Eastern Red Cedar and White Fir North Scale 0 20'10'50' Page 1 of 8 CITY OF SCANDIA ORDINANCE NO.: 2024-09 AN ORDINANCE AMENDING THE SCANDIA UNIFIED DEVELOPMENT CODE SECTION 153.300.020 AND 153.300.030 REGARDING CANNABIS ZONING STANDARDS The City Council of the City of Scandia, Washington County, Minnesota hereby ordains: Section 1 Amendment. The City of Scandia Unified Development Code (“Development Code”, or “Code”), Section 153.300.020 Subd. 1 (B) Table 153.300.020-2. Table of Uses by Base Zoning District, shall be amended by adding the underlined text and deleting the stricken text as follows: 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 Commercial Uses Agriculture, Commercial Outdoor Cannabis P P P 153.300.030 Subd. 1 (C) & (H) Agriculture, Commercial Indoor Cannabis CUP CUP CUP 153.300.030 Subd. 1 (D) & (H) Cannabis sales P P P P 153.300.030 Subd. 1 (H) Cannabis, Mezzobusiness CUP CUP P P 153.300.030 Subd. 1 (H) & (I) Cannabis, Microbusiness CUP CUP P P 153.300.030 Subd. 1 (H) & (J) Laboratories, Medical, Research, and Testing CUP 153.300.030 Subd. 1 (H) Light Manufacturing, Cannabis CUP 153.300.030 Subd. 1 (H) & (U) Light Manufacturing, Lower-Potency Hemp Edible CUP 153.300.030 Subd. 1 (H) & (V) Lower-Potency Hemp Edible sales P P P P 153.300.030 Subd. 1 (H) Wholesaling, Cannabis P 153.300.030 Subd. 1 (H) & (PP) Page 2 of 8 Section 2 Amendment. The City of Scandia Unified Development Code (“Development Code”, or “Code”), Section 153.300.030 Subd. 1, shall be amended by adding the underlined text and deleting the stricken text as follows: (C) 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. The use shall comply with the standards in Section [153.300.030 Subd. 1 (H) Cannabis Businesses and Hemp Businesses]. III. 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 IV. 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. (D) 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 use shall comply with the standards in Section [153.300.030 Subd. 1 (H) Cannabis Businesses and Hemp Businesses]. III. Lighting. Any building that is not proposed to be constructed with materials that are not 100% opaque, shall submit a narrative or plan that shows how light pollution and nuisances shall be mitigated. IV. Outdoor storage of containers, pallets, waste/recycle containers, etc. is prohibited. V. Water and Wastewater a. Management of wastewater shall be in accordance with the Office of Cannabis Management, Minnesota Pollution Control Agency, or local Page 3 of 8 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. (H) Cannabis Businesses and Hemp Businesses are subject to the following standards: I. Character Area Standards. a. Sites and structures shall comply with the applicable Character Area Standards in Section [153.400.040]. b. New structures shall be designed to be substantially consistent with the Architectural Design Standards. II. Lighting. Lighting shall comply with Section [153.400.030 Subd. 4 Lighting] and the applicable Character Area Standards in Section [153.400.040]. III. Odors. The facility shall not produce noxious or nuisance causing odors and shall be in accordance with standards from the Office of Cannabis Management and the Minnesota Pollution Control Agency. IV. Screening. All mechanical, odor suppression equipment, and trash enclosures must be screened from the right-of-way and adjacent residential uses. V. Signs. a. Exterior wall, window and monument signage shall not depict a cannabis flower, cannabis product, hemp edibles, hemp derived edible consumer product or the like. b. Additionally, a business logo containing the above depictions shall not be displayed as part of any exterior signage. c. No products, interior signage, advertisements, or like attention-getting items shall be placed or displayed that may be visible from the exterior of the Cannabis or Hemp Business. VI. Security. a. The facility shall be secured as required by Minnesota Statutes, Minnesota Rules, and the Office of Cannabis Management. b. Any security bars, gates or grills shall be retractable, shall remain open and retracted when the Cannabis or Hemp business is open to the public or otherwise in operation and shall not be installed on the exterior of the building. Page 4 of 8 (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. The use shall comply with the standards in Section [153.300.030 Subd. 1 (H) Cannabis Businesses and Hemp Businesses]. III. Cannabis cultivation shall conform with the standards established in Section [153.300.030 1 (C) and (D)]. IV. 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. The use shall comply with the standards in Section [153.300.030 Subd. 1 (H) Cannabis Businesses and Hemp Businesses]. III. Cannabis cultivation shall conform with the standards established in Section [153.300.030 Subd. 1 (C) and (D)]. IV. Manufacturing and processing cannabis shall conform with the standards established in Section [153.300.030 Subd. 1 (U)]. (U) 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 use shall comply with the standards in Section [153.300.030 Subd. 1 (H) Cannabis Businesses and Hemp Businesses]. III. 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]. Page 5 of 8 IV. Outdoor storage of containers, pallets, waste/recycle containers, etc. is prohibited. V. 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. (V) Light Manufacturing, Lower-Potency Hemp Edible. As a principal use, lower-potency hemp edible 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 use shall comply with the standards in Section [153.300.030 Subd. 1 (H) Cannabis Businesses and Hemp Businesses]. III. 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]. IV. Outdoor storage of containers, pallets, waste/recycle containers, etc. is prohibited. V. 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. Page 6 of 8 (PP) Wholesaling, Cannabis. As a principal use, cannabis wholesaling is allowed, subject to the following standards: a. 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. b. The use shall comply with the standards in Section [153.300.030 Subd. 1 (H) Cannabis Businesses and Hemp Businesses]. c. Warehousing and distribution are allowed as an accessory use to cannabis wholesaling, subject to the following standards: i. 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. ii. 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. iii. Landscaping and screening must be provided according to the requirements of Section [153.400.060]. d. Outdoor storage of containers, pallets, waste/recycle containers, etc. is prohibited. Section 3 Amendment. The City of Scandia Unified Development Code (“Development Code”, or “Code”), Section 153.600.30 Subd. 1, shall be amended by adding the underlined text and deleting the stricken text as follows: 153.600.030 Definitions of Use, Standards and Terms 7. Agriculture, Commercial Outdoor Cannabis: See “Cannabis cultivation”. 8. Agriculture, Commercial Indoor Cannabis: See “Cannabis cultivation”. 33. Cannabis Business: A business licensed by the Office of Cannabis Management (OCM) as defined by Minnesota Statute 342.01 Subd. 14. 34. 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. 35. Cannabis, Mezzobusiness: A cannabis business that conducts an operation pursuant to Minnesota Statute Section 342.29, as it may be amended. 36. Cannabis, Microbusiness: A cannabis business that conducts an operation pursuant to Minnesota Statute Section 342.28, as it may be amended. Page 7 of 8 37. Cannabis sales: The sale of cannabis plants and seedlings, adult-use cannabis flower, and adult use cannabis products directly to consumers. 109. Hemp Business: A business licensed by the Office of Cannabis Management (OCM) as defined by Minnesota Statute 342.01 Subd. 14 as defined by Minnesota Statute 342.01 Subd. 34. 134. Light Manufacturing, Lower-Potency Hemp Edible: A hemp business that conducts an operation pursuant to Minnesota Statute Section 342.45, as it may be amended. 141. 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 Section 4 Amendment. The remainder of the code. Numbering within sections of the Unified Development Code shall be adjusted in tandem to include the amendments within this ordinance. Section 5 Effective Date. This ordinance shall be in full force and effect upon its adoption and publication. Page 8 of 8 Passed and adopted by the City Council of the City of Scandia this 17th day of December 2024. Christine Maefsky, Mayor ATTEST: Kyle Morell, City Administrator CITY OF SCANDIA, MINNESOTA RESOLUTION NO. 04-21-26-02 APPROVING CONDITIONAL USE PERMIT FOR PID 1403220430013 LOCATED AT 21080 OZARK COURT NORTH WHEREAS, Joseph Whebbe (the “applicant”) made an application for a Conditional Use Permit, to allow for the indoor cultivation of cannabis, light manufacturing of cannabis, and light manufacturing of lower-potency hemp edibles, located at 21080 Ozark Court North and the property legally described as follows (the “subject property”): Hawkinson Business Park, Lot 6 Block 1 WHEREAS, the subject property is zoned as Industrial Park (I-P) District; and WHEREAS, the City of Scandia Unified Development Code (UDC) conditionally permits the indoor cultivation of cannabis, light manufacturing of cannabis, and light manufacturing of lower-potency hemp edibles in the I-P District; and WHEREAS, Section 153.500 of the City of Scandia UDC governs conditional use permits, and the process; and WHEREAS, staff reviewed the submittal and applicable UDC standards and determined the Conditional Use Permit (CUP) application to be complete on March 18, 2026; and WHEREAS, staff recommended approval of the CUP request with conditions; and WHEREAS, the Planning Commission reviewed the request for the Conditional Use Permit (CUP) at a duly noticed Public Hearing on April 7, 2026, and recommended that the City Council approve the CUP, with conditions. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF SCANDIA, WASHINGTON COUNTY, MINNESOTA, that it approves of a Conditional Use Permit to allow for the indoor cultivation of cannabis, light manufacturing of cannabis, and light manufacturing of lower-potency hemp edibles located at 21080 Ozark Court North, based on the following findings: 1. Objectives of the Comprehensive Plan include encouraging development that is compatible with surrounding land uses, protects natural resources, and efficiently utilizes existing infrastructure. The proposed uses comply with the Comprehensive Plan and will not have a negative effect on public facilities or capital improvement plans. 2. The proposed uses are allowed in the I-P zoning district with a Conditional Use Permit. The proposed uses would operate indoors, utilizing the existing facility, isolated from public access, and are subject to state licensing, security, inspection, and tracking requirements. These uses will not negatively impact public welfare and will not be detrimental to or endanger the public health, safety, or comfort. Reasonable conditions of approval can be added if the City Council finds issues with proposed uses. 3. The proposed uses will not be injurious to the use and enjoyment of other property in the immediate vicinity for the purposes already permitted, nor substantially diminish and impair property values or scenic views. 4. The proposed uses will not impede development or improvement of surrounding properties. 5. The proposed uses will utilize existing utility services and do not require an extension of city-owned public facilities. The applicant has also proposed filtration systems to minimize water and electricity use. 6. The proposed uses are generally consistent with the applicable regulations of the I-P zoning district and all other applicable standards of the UDC. Reasonable conditions have been included with the approval to address where the application is inconsistent with or more information is needed to confirm conformance with the standards of the UDC. Any significant changes to the use or site plan will be required to conform with the applicable regulations of the district and the Conditional Use Permit must be amended to allow for the change. 7. This Conditional Use Permit meets the general and specific performance standards of the UDC. As required in 153.200.030 Subd. 5 (A) Industrial Park (I-P) Zoning District and 1530.300.030 Subd. 1 (J) Cannabis, Microbusiness, (H) Cannabis Businesses and Hemp Businesses, and (U) Light Manufacturing, Cannabis of the UDC. FURTHER BE IT RESOLVED that the following conditions of approval shall be met: 1. The CUP is granted only for the specific cannabis and lower-potency hemp edible uses approved and described in the application and staff report. 2. Any expansion, intensification, change in use, or addition of new conditional uses requires a CUP amendment or new CUP approval. 3. Development of the site shall be substantially consistent with the plans submitted to and reviewed by the City as part of this application, except where modifications are required by these conditions. 4. All exterior alterations, new structures, fencing, signage, exterior lighting, security requirements, and off-street parking and loading areas shall comply with any and all relevant standards adopted in the Unified Development Code and any other local, state, or federal standards and regulations. 5. Prior to commencing operations, the applicant shall submit to the City a written certification from a licensed mechanical engineer or qualified cannabis odor control consultant confirming that the odor mitigation system has been designed and sized appropriately for the facility’s square footage, air volume, anticipated terpene load, and noise generation. 6. The odor mitigation system shall cover all odor-generating spaces within the facility, including but not limited to cultivation rooms, drying rooms, curing rooms, trimming areas, packaging areas, and any extraction or processing rooms. 7. The operator shall maintain a written maintenance log documenting all inspections, filter replacements, and repairs to the odor mitigation system. This log shall be kept on site and made available to City staff or its designee upon request during any inspection. 8. The odor mitigation system shall be inspected by a qualified third party no less than once per calendar year. A written report of each inspection shall be submitted to the City within 30 days of completion. 9. If the odor mitigation system becomes non-operational for any reason, the operator shall notify the City within 24 hours and shall suspend any operations generating significant odors until the system is restored to full operation. 10. No retail sales, onsite consumption, or public access is permitted unless specifically approved through a future CUP amendment and all required state and local approvals. 11. All cannabis cultivation, processing, and manufacturing activities shall occur entirely indoors. No outdoor cultivation or processing is permitted. 12. Cannabis operations shall be limited to the approved square footage shown on the submitted site plan. 13. The facility shall maintain security measures consistent with state licensing requirements. Access to cannabis areas shall be restricted to authorized personnel only. 14. An approved fire department access system shall be installed prior to occupancy. 15. The facility shall be equipped with a functioning odor mitigation system, including carbon filtration and negative air pressure, which shall be maintained in working order at all times. 16. Hours of operation shall be limited to 8:00 a.m. to 6:00 p.m.. 17. Existing vegetation on site shall be maintained to the highest extent possible to provide screening. Landscaping and tree plantings shall be consistent with the submitted application and the Unified Development Code as well as the recommended tree species from the Minnesota Department of Natural Resources.. 18. The site shall utilize existing utility connections unless otherwise approved, and any proposed reuse or filtration systems shall comply with applicable health and environmental regulations, including those enforced by Washington County. 19. The applicant shall comply with all applicable local, county, state, and federal laws, rules, and regulations, including requirements of the Minnesota Office of Cannabis Management. 20. The applicant shall obtain and maintain all required licenses and permits prior to work on the site and maintain required licenses and permits for the duration of the use from local, state, and federal entities, including but not limited to the applicable state microbusiness license. 21. The applicant shall submit proof of valid site inspection or approval by the Office of Cannabis Management or authorized state officials to the City on an annual basis. 22. The City may revoke the Conditional Use Permit for the site if all permits and required work to comply with approvals from other local, state, and federal permits are not completed. 23. Failure to comply with any conditions of approval constitutes a zoning violation and may result in enforcement action or revocation of the Conditional Use Permit. 24. The conditional use permit shall expire without further action by the Planning Commission or the City Council, unless the applicant commences the authorized use within one year of the date of the condition use permit is issued or extended through the process described in 153.500.060 Subd. 1. (C) V. of the Unified Development Code. Whereupon, said Resolution is hereby declared adopted on this _____ day of April 2026. Steve Kronmiller, Mayor Joseph Whebbe, Applicant ATTEST: Kyle Morell, City Administrator