VII.1. Update on Moratorium on the Operation of Cannabis Businesses; Domeier
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CITY OF HOPKINS
Memorandum
To: Honorable Mayor and Council Members
Mike Mornson, City Manager
From: Amy Domeier, City Clerk
Date: October 17, 2023
Subject: Update on Moratorium on the Operations of Cannabis Businesses
_____________________________________________________________________
PURPOSE
On July 18, 2023, the City Council adopted a 120-day (to expire on November 24, 2023)
moratorium to allow time for the City Council and staff to consider next steps and
potential regulations related to the newly authorized cannabis legislation, including
review of the Office of Cannabis Management’s (“OCM”) regulations and model
ordinances. Since that time, the OCM management has provided that it does not
anticipate having either the administrative rulemaking process or model ordinance
complete or will begin issuing licenses until the end of 2024 or the first quarter of 2025.
Staff is looking to extend the moratorium to allow the City to develop regulations on a
known and stable timeline, and businesses in the community have requested guidance
on locations where these businesses might be able to operate.
INFORMATION
Timeline
The Office of Cannabis Management (OCM) is still in the process of developing the
regulatory framework for legal adult cannabis and establish processes and timelines to
apply for licenses. Most importantly, the administrative rulemaking process should
clarify what city regulation of cannabis businesses will entail, as well as other important
aspects of the state-licensure and city-registration (as part of receiving a license from
the state, a business must register with the city). The OCM’s website provides:
“While this [Expedited Rulemaking] process will allow OCM to complete the
rulemaking process with some flexibilities that would otherwise not be available, the
rules may not be approved and in force until 2025.”
Potential City Regulations
Information regarding the actions the City Council will be able to take to regulate
cannabis businesses in Hopkins remains the same as when the moratorium was
enacted. It is anticipated that the City Council will have control in regulating the
following:
ADMINISTRATION
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Reasonable restrictions on the time, place and manner of the operation of
cannabis businesses. These regulations will likely primarily be adopted through zoning
regulations, but things like limits on hours of operation may be adopted elsewhere. The
OCM’s model ordinance is required to address these regulations.
o There restrictions would be in addition to requiring cannabis businesses to
adhere to general zoning and use regulations (e.g., cannabis retail could only
exist where general retail is allowed), as well as all applicable building and fire
code.
Setbacks from Youth Oriented Facilities. The City may adopt regulations prohibiting
cannabis businesses within 1,000 feet of a school, or 500 feet of a day care, residential
treatment facility, or an attraction within a public park that is regularly used by minors,
including a playground or athletic field.
o We understand that these buffers would be the maximum. i.e., we could impose
a 350 ft buffer from schools, parks, etc.
o It is unclear whether the city is able to adopt an additional buffer between two
cannabis businesses or whether the listed buffers (distances from youth-oriented
uses) are the only kind that will be allowed.
Restrict the number of cannabis retailers to one per 12,500 residents. There is
some question based on what was negotiated between legislators and interest groups
(which should be clarified by the administrative rules or during the next legislative
session) whether the intent of the ratio was to provide that a city with a population
between 12,501-25,000 may limit the number of retailers to one or two retailers.
Regardless, the City would not be able to adopt regulations that further limit the number
of retailers established under the ratio. This would not restrict the City Council from
considering allowing more than the minimum.
Business Registration and Compliance Checks
o Businesses receiving a license from the OCM will also be required to register
with the City. This is the point at which the City will confirm that the business
meets all local cannabis specific and general regulations related to the particular
business.
o The City will be required to conduct compliance checks at least once per
calendar year, but it is it’s uncertain how the license process will actually work
and if the Police Department would be responsible for background checks, but
it’s clear that it must be addressed in the administrative rulemaking process.
Municipal Cannabis
o The City is able to operate its own municipal dispensary should it choose to do
so. It is unclear at this time if the OCM will prioritize municipal applicants over
other applicants. Staff is not planning to pursue this option at this time unless
different direction is given by Council. This would require Staff to more deeply
review what resources would be necessary to consider this option.
Staff has created a business license comparison for tobacco, liquor and the proposed
cannabis sales. In addition, a map has been created with the proposed zoning setbacks
as allowed by law. Both illustrations are attached to this report.
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FUTURE ACTION
Staff will not be able to put an ordinance together before the end of the moratorium
based off the currently outstanding items the state needs to determine. Staff plans to
come back to Council to extend the moratorium and continue to discuss regulations that
are in the City’s control.
Tobacco License Vaping Establishment License Off-Sale Liquor Cannabis
Number of licenses issued 7/1 19 1 9
License Limit None 1 9 Need to issue at least 2
License Fee(s) $200 $100 $200 (lower than State Statute 340A.408))
Distance requirement(s) Tobacco Sales Establishments prohibited within 500
feet of a public park, public or private school, church,
daycare or the Hopkins Center for the Arts (Zoning
Code 102-580 i)
Tobacco Sales Establishments
prohibited within 500 feet of a public
park, public or private school,
church, daycare or the Hopkins
Center for the Arts (Zoning Code
102-580 i)
No new off-sale intoxicating liquor license or off-sale
3.2 percent malt liquor license shall be granted for any
building within 350 feet of any elementary or
secondary school, daycare center or religious
institution, existing exclusive off-sale liquor store,
pawnshop, currency exchange, or any business
licensed by the city as an adult oriented business.
The distance shall be a horizontal measurement from
the nearest existing property line. (City Coder Sec. 4-
105)*
Allowed to prohibit the operation of a cannabis business within
1,000 feet of a school or 500 feet of a day care, residential
treatment facility, or an attraction within a public park that is
regularly used by minors, including a playground or athletic field.
Time of sales Not regulated Not regulated Follow State Statute (340A.504). No sale of intoxicating
liquor may be made by an off-sale licensee:
(1) on Sundays, except between the hours of 11:00 a.m.
and 6:00 p.m.;
(2) before 8:00 a.m. or after 10:00 p.m. on Monday
through Saturday;
(3) on Thanksgiving Day;
(4) on Christmas Day, December 25; or
(5) after 8:00 p.m. on Christmas Eve, December 24.
Prohibited Use It shall be unlawful for any person to light, inhale, or
exhale tobacco, tobacco products, or tobacco related
devices in any retail establishment, or for any tobacco
license holder or licensee, or their employees, to
permit the same. The vaping of e-cigarettes at a retail
establishment and the sampling of vaping of e-
cigarettes at a licensed vaping establishment are
exempt from prohibition under this section (City Code
Sec. 10-463)
No person may use tobacco products on city-owned
parkland, park facilities, recreational or open spaces,
except within the confine of a vehicle in a designated
parking area. (Legislative Policy 5-G)
It shall be unlawful for any person to
light, inhale, or exhale tobacco,
tobacco products, or tobacco related
devices in any retail establishment,
or for any tobacco license holder or
licensee, or their employees, to
permit the same. The vaping of e-
cigarettes at a retail establishment
and the sampling of vaping of e-
cigarettes at a licensed vaping
establishment are exempt from
prohibition under this section (City
Code Sec. 10-463)
Size/Floor Space requirements **Considered an establishment if over 25% of the gross
floor area is devoted to the sales and display of
tobacco, tobacco products or tobacco-related devices
(Zoning Code 102-540)
**Off-sale liquor stores may not exceed 5,000 square
feet in gross floor area (Zoning Code 102-580 c)**
Compliance Checks All licensed premises (tobacco sales or vaping
establishment) shall be open to inspection by the city
police or other authorized city official during regular
business hours. At least once per calendar year, an
unannounced compliance check shall be conducted
at each licensed retail establishment. (City Code Sec.
10-466)
Same as tobacco. At least once per calendar year, required to conduct compliance
checks of every cannabis business and hemp business with a
retail registration.
Also required to “conduct unannounced age verification
compliance checks at least once each calendar year.”
Violation language City Code Sec. 10-467 City Code Sec. 10-467 City Code Sec. 4-82 There is limited authority to suspend a registration for up to 30
days. The OCM will review the suspension and may order
reinstatement, additional suspension, revocation or other
licensed based penalties or enforcement action. We may
reinstate the registration if it determines that the violation has
been cured. •We can impose civil penalties of up to $2,000 for
registration violations.
* Includes instructions for measuring the distances
**Certain zones restrict Tobacco Sales Establishments and Off-Sale Liquor Stores to no more than 25% of the building footprint (RX-TOD, RX-D, RX-N, IX-TOD) – see zoning map. For liquor, this was put
in place to eliminate a “big box” from coming to Hopkins