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10.c1 UDC Cannabis Zoning Standards Memo 1 | P a g e Date of Meeting: July 21, 2026 To: Honorable Mayor and Members of the City Council From: T.J. Hofer, Consultant City Planner Re: Memo Regarding Cannabis Uses in the Unified Development Code The City of Scandia adopted standards regulating various cannabis and low-potency hemp uses on December 17, 2024. Staff have recently identified an issue with the language and are asking the City Council to consider solutions to the issue. BACKGROUND Ordinance 2024-09 approved an amendment to the Unified Development Code (UDC) that allowed for various cannabis and hemp uses throughout the city. Generally, the uses were regulated based on the actual use, not the license type associated with the use. An example of this is that the UDC allows for "Agriculture, Commercial Outdoor Cannabis" and "Agriculture, Commercial Indoor Cannabis" rather than "Cannabis Cultivator" which is the name of the license that allows for cultivation only. Two exceptions to this exist in Section 153.300, “Cannabis, Microbusiness” and “Cannabis, Mezzobusiness.” Microbusiness and mezzobusiness are license types that are issued by the Office of Cannabis Management. These licenses are essentially combination licenses that allow the license holder to cultivate, manufacture, and sell cannabis. Microbusinesses and mezzobusinesses are allowed in the V-C, V-HC, R-C, and I-P zoning districts. Recently, a resident located in the Rural Residential General (RR-G) zoning district contacted the city with a desire to establish an "Agriculture, Commercial Outdoor Cannabis" use, but the resident was pursuing a cannabis microbusiness license. Staff believe that based on the “Cannabis, Microbusiness” use being prohibited in the RR-G district, the city cannot approve the location even though the applicant has not expressed an intent to manufacture or sell cannabis on the site. 2 | P a g e DRAFT ORDINANCE AMENDMENT Table 153.300.020-2 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 Cannabis, Mezzobusiness CUP CUP P P 153.300.030 Subd. 1 (H) & (I) See: Agriculture, Commercial Outdoor Cannabis; Agriculture, Commercial Indoor Cannabis; Cannabis sales; Light Manufacturing, Cannabis Cannabis, Microbusiness CUP CUP P P 153.300.030 Subd. 1 (H) & (J) See: Agriculture, Commercial Outdoor Cannabis; Agriculture, Commercial Indoor Cannabis; Cannabis sales; Light Manufacturing, Cannabis (H) Cannabis, Mezzobusiness. As a principal or accessory use subject to the following standards: I. Mezzobusinesses uses are allowed to perform the following uses in the districts in which the use is allowed in Table 153.300.020-2. This includes: i. Agriculture, Commercial Outdoor Cannabis ii. Agriculture, Commercial Indoor Cannabis iii. Cannabis sales iv. Light Manufacturing, Cannabis II. 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. III. The use shall comply with the standards in Section [153.300.030 Subd. 1 (H) Cannabis Businesses and Hemp Businesses]. IV. Cannabis cultivation shall conform with the standards established in Section [153.300.030 1 (C) and (D)]. V. Manufacturing and processing cannabis shall conform with the standards established in Section [153.300.030 Subd. 1 (U)]. 3 | P a g e (I) Cannabis, Microbusiness. As a principal or accessory use, subject to the following standards: I. Microbusinesses uses are allowed to perform the following uses in the districts in which the use is allowed in Table 153.300.020-2. This includes: a. Agriculture, Commercial Outdoor Cannabis b. Agriculture, Commercial Indoor Cannabis c. Cannabis sales d. Light Manufacturing, Cannabis II. 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. III. The use shall comply with the standards in Section [153.300.030 Subd. 1 (H) Cannabis Businesses and Hemp Businesses]. IV. Cannabis cultivation shall conform with the standards established in Section [153.300.030 Subd. 1 (C) and (D)]. V. Manufacturing and processing cannabis shall conform with the standards established in Section [153.300.030 Subd. 1 (U)]. Staff Analysis Staff believes the proposed amendments will guide microbusiness and mezzobusiness cannabis- related uses to the correct zoning districts and remedy the existing conflict. COUNCIL ACTION The City Council should discuss the issue and the proposed language and provide direction to staff for next steps. Attachments A. Ordinance 2024-09 Standards for Cannabis Uses 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. Passed and adopted by the City Council of the City of Scandia this 17th day of December 2024. 1' 1 \ Christine Maefsky, May r ATTEST: Kyle Morell, City Administrator Page 8 of 8 Affidavit of Publication THE COUNTRY MESSENGER STATE OF MINNESOTA 1 Ordinance Summary ss. SUMMARY PUBLICATION OF ORDINANCE No. 2024-09, AN OR - COUNTY OF WASHINGTON ) DINANCE OF THE CITY COUNCIL OF THE CITY OF SCANDIA, MINNESOTA, AMENDING THE SCANDIA UNIFIED Eric Buelow being duly sworn, on oath says that he is the publisher or authorized agent and em- DEVELOPMENT CODE SECTION 153.300.020 AND 153.300:030 ployee of the publisher of the newspaper known as The Country Messenger, and has full knowledge REGARDING CANNABIS of the facts which are stated below: ZONING STANDARDS A) The newspaper has complied with all of the requirements constituting qualification as a quail- On December 17, 2024, at a meet- ing of the Scandia City Council, by Pied newspaper, as provided by Minnesota Statute 331.A.02,331A.07, and other applicable laws, majority vote, the City Council ad- opted Ordinance No. 2024-09 which as amended. amends the Scandia Unified Devel- opment Code provisions regarding B) The printed ORDINANCE 2024-09 cannabis zoning standards by: Amending the zoning district use CITY OF SCANDIA table to add multiple cannabis re- lated uses and businesses to Table which is attached, was cut from the columns of said newspaper, and was printed and published one 153.300.020-2 as both permitted and conditional uses. week on Wednesday, the 25th of December, 2024, and printed below is a copy of the lower case Establishing use specific stan- dards and conditions for multiple alphabet from A to Z, both inclusive, which is hereby acknowledged as being the size and kind of cannabis uses and businesses in Chapter 153.300.030 Subd. 1. type used in the composition and publication of the notice: Adding definitions related to. can- businesses and uses. abcdefghijklmnopgrstuvwxyz A printed copy of the Ordinance isAprinted available for inspection by any per- By. son during regular office 'hours at City Hall or by standard or electronic mail. Subscribed and sworn to me on this 26th of December, 2024. Published in the Country Messener Ij December 25, 2024 Notary Public A"^An,w ^^AAA 4 CARRIE JANELL LARSON FRECEIVEDNotaryPublic -Minnesota -- 1 .. My Commission Expires Jan 31, 2026 ANDIA