2023.07.13 Work Session Packet
4141 Douglas Drive North • Crystal, Minnesota 55422-1696
Tel: (763) 531-1000 • Fax: (763) 531-1188 • www.crystalmn.gov
Posted: July 7, 2023
City Council Work Session Agenda
Thursday, July 13, 2023 at 6:30 p.m.
Council Chambers/Zoom
Pursuant to due call and notice given in the manner prescribed by Section 3.01 of the City
Charter, the work session of the Crystal City Council was held on Thursday, July 13, 2023 at
______ p.m. in the Council Chambers at City Hall, 4141 Douglas Dr. N., Crystal, MN and via
Zoom. The public may attend the meeting via Zoom by connecting to it through one of the
methods identified on the Notice of July 13, 2023 Work Session.
I. Attendance
Council members Staff
____ Kiser ____ Bell
____ Onesirosan ____ Gilchrist
____ Adams ____ Therres
____ Budziszewski ____ Elholm
____ Cummings ____ Larson
____ Eidbo ____ Ray
____ Kamish ____ Revering
____ Sutter
____ Serres
II. Agenda
The purpose of the work session is to discuss the following agenda item:
1. Cannabis interim ordinance.
III. Adjournment
The work session adjourned at ______ p.m.
Auxiliary aids are available upon request to individuals with disabilities by calling the city clerk at
(763) 531-1145 at least 96 hours in advance. TTY users may call Minnesota Relay at 711 or 1-800-627-3529.
4141 Douglas Drive North • Crystal, Minnesota 55422-1696
Tel: (763) 531-1000 • Fax: (763) 531-1188 • www.crystalmn.gov
Posted: July 7, 2023
CRYSTAL CITY COUNCIL
NOTICE OF JULY 13, 2023 WORK SESSION
NOTICE IS HEREBY GIVEN that the City Council of the City of Crystal will hold a work session on
Thursday, July 13, 2023, at 6:30 p.m. in the Council Chambers at City Hall, 4141 Douglas Dr. N.,
Crystal, MN and via Zoom.
The public may attend the meeting via Zoom by connecting to it through one of the methods
identified below.
Topic: Crystal City Council Work Session
Time: Jul 13, 2023 06:30 p.m. Central Time (US and Canada)
Join Zoom Meeting:
https://us02web.zoom.us/j/83275588125?pwd=RlRNMWlnQzZOb0J3TzVxWDBJamd1dz09
Meeting ID: 832 7558 8125 Passcode: 414141
One tap mobile:
+13126266799,,83275588125#,,,,*414141# US (Chicago)
+16469313860,,83275588125#,,,,*414141# US
Dial by your location:
+1 312 626 6799 US (Chicago)
+1 646 931 3860 US
+1 929 205 6099 US (New York)
+1 301 715 8592 US (Washington DC)
+1 305 224 1968 US
+1 309 205 3325 US
+1 669 444 9171 US
+1 669 900 6833 US (San Jose)
+1 689 278 1000 US
+1 719 359 4580 US
+1 253 205 0468 US
+1 253 215 8782 US (Tacoma)
+1 346 248 7799 US (Houston)
+1 360 209 5623 US
+1 386 347 5053 US
+1 507 473 4847 US
+1 564 217 2000 US
Find your local number: https://us02web.zoom.us/u/kbdQotvIUL
Auxiliary aids are available upon request to individuals with disabilities by calling the City Clerk at
(763) 531-1145 at least 96 hours in advance. TTY users may call Minnesota Relay at 711 or 1-800-627-3529.
1
CR205-30-887343.v1
Kennedy Troy J. Gilchrist
150 South Fifth Street
Suite 700
Minneapolis MN 55402
(612) 337-9214 telephone
(612) 337-9310 fax
tgilchrist@kennedy-graven.com
http://www.kennedy-graven.com
&
Graven
C H A R T E R E D Also: St. Cloud Office
501 W. Germain Street, Suite 304
St. Cloud, MN 56301
(320) 240-8200 telephone
MEMORANDUM
To: Adam Bell, City Manager
City of Crystal
From: Troy Gilchrist, City Attorney
Date: July 7, 2023
Re: Bullet Point Overview of the Cannabis Law and an Outline of Options
---------------------------------------------------------------------------------------------------------------------
The Governor signed the cannabis bill (HF100) into law on May 30, 2023. The approximately
321 pages of legislation marks a huge turning point for the state in how it treats marijuana.
Unfortunately, it takes a watered-down approach to local control, though efforts made along the
way to strengthen local control did have a positive effect. The law did not clarify the role of
local governments with respect to edible cannabinoids (“THC Edibles”) during the transition
period until March 1, 2025, when the new Office of Cannabis Management (“OCM”) is expected
to be fully established and issuing licenses.
I have attached a copy of the presentation my office did on the new law some weeks ago that
helps explain the main components of the law from a local government perspective. Rather than
attempt to provide a full summary of the bill, I will provide highlights and comments on some of
the more immediate issues and options, and then address some longer-term issues.
Bullet Point Summary of the Law
• Legalizes the recreational use, possession, and growing of cannabis and allows the
commercial growing and selling of cannabis
• Establishes the OCM to develop rules, issue licenses, and to regulate this new industry
• Creates 16 types of licenses
o THC edibles become low-potency hemp edibles when they are licensed by the
state.
2
CR205-30-887343.v1
• Maintains the status quo regarding THC Edibles until the state starts issuing licenses
sometime in later 2024. The prior statute is repealed effective March 1, 2025.
• Allows local government units (LGU) to:
o Adopt a moratorium on cannabis business until January 1, 2025
o Register retail establishments;
o Collect registration fee;
o May suspend a registration;
o Review and comment on state submittal of proposed licenses;
o Requires local compliance checks of both operations and underage sales;
o Impose a cap on the number of retail businesses in a city based on population;
o Limit hours of operation;
o Establishes setbacks from schools, day cares, treatment facilities, and parks
o Impose time, place, and manner restrictions on retail establishments;
o May enforce other ordinances such as nuisance prohibitions;
o Cannabis event organizers must obtain city approval for events;
o Seek grants;
o Establish a city cannabis retail business;
o Make the use of cannabis in a public place a petty misdemeanor;
o Obtain a portion of the state tax on these products through a local government
cannabis aid account;
• Requires establishments to comply with state building and fire codes
• Address various employment issues
• Allows exclusive liquor stores to sell THC Products as of June 1, 2023
• The rulemaking process and sample ordinances the OCM is required to undertake and
provide will/should provide greater detail
Shorter-Term Issues
1. Consider Adopting a New Moratorium. I recommend the City Council consider
authorizing a study and adopting a new moratorium on cannabis businesses until January
1, 2025 as authorized under the new law. The City should provide 10 days’ published
notice and must hold a public hearing before acting on the interim ordinance. Because
this is an interim ordinance, the City Council can adopt it after the hearing without having
to conduct two readings. This moratorium does not affect THC products and does not
replace the existing moratorium. Both interim ordinances will remain in place until the
City Council repeals the original interim ordinance or it expires on August 16, 2023.
Options:
(a) Provide notice, hold a hearing, and adopt a new interim ordinance on cannabis
businesses that runs until January 1, 2025; or
(b) Do not adopt the interim ordinance and wait and see what OCM develops for
rules and sample ordinances.
3
CR205-30-887343.v1
2. Existing Interim Ordinance. The interim ordinance the City Council adopted to place a
moratorium on the sale of THC products under Minn. Stat. § 151.72 will expire on
August 16, 2023. Despite everyone’s expectations, the Legislature did not clarify the
statute it adopted in 2022 with respect to local regulation. Instead, the statute was turned
into an interim measure that allows continued sales by those who register with the state
by October 1, 2023. The role of LGUs in the regulation of these products was not
clarified, so it appears the status quo will continue for these products for now. That
means the moratorium the City Council previously adopted remains in place and the City
retains the authority to regulate these products. Sales of THC products are allowed to
continue under the new law until the state establishes the new licensing process for “low-
potency hemp products,” but in no case later than March 1, 2025 when the statute is
repealed.
3. Possible Short-Term Regulations. The City has the authority to adopt licensing and
zoning regulations applicable to businesses selling THC edibles. Any licensing
ordinance would be short-lived because it will be preempted once the state starts
licensing these products. While zoning regulations can continue once the state begins
licensing, we do not know what the “time, place, and manner” restrictions the OCM will
identify as part of its rules and sample ordinances. The City will almost certainly need to
revise whatever zoning regulations it adopts now once the new rules are published. That
said, if the City can elect to adopt what would need to be considered short-term
regulations until the full range of zoning regulations can be prepared and adopted prior to
end of the new moratorium.
4. Policy Considerations. The City will need to consider whether it is “worth it” to pursue
the adoption of regulations, as well as establish the related administrative procedures, to
license THC edibles for the roughly 18 months it will take the state to stand up its
licensing system. Regardless of whether the City desires to pursue the short-term
regulation of these products, another consideration is whether the City would like to
move forward with adopting zoning regulations on cannabis businesses or wait until the
rules and sample ordinances are available.
Options if Choose Not to Regulate Now:
(a) Continue to study the issue at let the moratorium expire; or
(b) Repeal the moratorium.
Options if Choose to Regulate Now:
(a) Develop and adopt a licensing system for THC edibles that will likely be in place
for one or one and half licensing cycles; and/or
(b) Develop zoning regulations on THC edible businesses and possibly on cannabis
businesses, with the understanding the regulations will need to be amended after
the rules are adopted.
4
CR205-30-887343.v1
Longer-Term Issues
The following is a list of at least some of the issues the City will need to consider and work on
during the period of the new moratorium. There is potentially a lot of work tied up in these short
descriptors, but fortunately for most of them the City will have through 2024 to review and act
on them.
1. Employment Issues. There are a number of employment related provisions in the law related
to the treatment of employees who lawfully use cannabis. Our office will be reviewing those
provisions to develop specific recommendations, but it is clear the City will eventually need
to update its policies to accommodate the provisions in the new law.
2. Law Enforcement Issues. The new law obviously changes the criminal laws associated with
the growing, possession, and use of cannabis. As such, law enforcement will need to become
familiar with the new parameters established by the law. Presumably the OCM will provide
some guidance to assist law enforcement to understand and apply the new laws.
3. Time, Place, and Manner Restrictions. We will have to wait and see the rules the OCM
develops related to the time, place, and manner restrictions the City may adopt to regulate
retail businesses. We are currently thinking the Legislature used this language to refer to
zoning regulations, though if that is the case it is not clear why they used language that is
most typically used to refer to limitations on First Amendment rights. OCM is required to
work with LGUs in developing the rules and sample ordinances so hopefully those it consults
can help guide the process.
4. Registration. While an LGU can opt out, I am certain the City will want to be involved in
registering those retail cannabis businesses the law requires to register with the LGU before
they can begin selling products in the city. Minn. Stat. § 342.22.
a. Businesses Required to Register. Cannabis microbusiness with a retail operations
endorsement, cannabis mezzobusiness with a retail operations endorsement, cannabis
retailer, medical cannabis retailer, medical cannabis combination business, or lower-
potency hemp edible retailer. Minn. Stat. § 342.22, subd. 1. The City may impose a civil
penalty of up to $2,000 on a business for selling without being registered. Minn. Stat. §
342.22, subd. 5(e).
b. Registration Fees. The City may charge a registration fee, but not an application fee, and
a renewal fee. The initial registration fee is capped at the lesser of $500 or half the state’s
license fee. The renewal fee, which doesn’t apply until the second renewal, is the lesser
of $1,000 or half the state’s license renewal fee. Minn. Stat. § 342.22, subd. 2.
c. “Shall Issue”. The City may conduct a “preliminary compliance check” before issuing a
registration. It is not clear at this point what would be reviewed during this check. If an
applicant is eligible under the law, the City “shall issue” the retail registration. Also, the
City “shall renew” the registration if the state renews the license.
5
CR205-30-887343.v1
d. Registration Suspension. The City may suspend a registration of a business that is “not
operating in compliance with the requirements of this chapter or that the operation of the
business poses an immediate threat to the health or safety of the public . . . .” Minn. Stat.
§ 342.22, subd. 5(a). The City must immediately notify OCM of the suspension and
provide the grounds for the suspension. The suspension may be in place for up to 30
days, but the OCM can either order the City to reinstate the registration or it can issue its
own suspension and take action against the license.
5. Compliance Checks. The City will be required to conduct two types of compliance checks
on retail cannabis businesses. Minn. Stat. § 342.22, subd. 4.
a. Age Verification. At least once a calendar year, the City must conduct an unannounced
age verification compliance check. Minn. Stat. § 342.22, subd. 4(b).
b. Operational. At least once a year the City must also conduct a check on compliance with
the application operation requirements and limits on the types of allowed products.
Minn. Stat. § 342.22, subd. 4(c).
6. License Application Review. The City is to review license applications received from the
state and report on whether the proposed business with local zoning ordinances and, if
applicable, whether the proposed business complies with the state fire code and building
code.” Minn. Stat. § 342.14, subd. 2(d). This review must be completed with 30 days and
report made back to OCM.
7. Limit Number of Businesses. The City may adopt an ordinance to no more than two retail
businesses, which would be one for every 12,500 residents. Minn. Stat. § 342.13(i). If the
number of licensed businesses in the County reaches that equivalent number of businesses
per population, then the City is not required to issue registrations. Minn. Stat. § 342.13(j).
8. Limit Hours of Operation. The City can by ordinance limit the hours of sale Monday
through Saturday from 10:00 am to 9 pm, which suggest the City can also prohibit sales on
Sundays. Minn. Stat. § 342.27, subd. 7(b).
9. Business Compliance.
a. A retail business “shall maintain compliance with state and local building, fire, and
zoning requirements or regulations” and “shall ensure that the licensed premises is
maintained in a clean and sanitary condition, free from infestation by insects, rodents, or
other pests.” Minn. Stat. § 342.27, subd. 8.
b. There are references in the performance standards for particular retail businesses
requiring the retailer to comply with “all relevant state and local laws, ordinances,
licensing requirements, and zoning requirements.” Minn. Stat. § 342.46(f). This
particular quoted language relates to low-potency hemp retailers.
6
CR205-30-887343.v1
10. State Inspections. The OCM is to conduct inspections of businesses and “shall promptly
inspect cannabis businesses and hemp businesses that are the subject of complaint by a local
unit of government.” Minn. Stat. § 342.19, subd. 4(d).
11. Complaint Process. The OCM rules are required to establish “an expedited complaint
process to receive, review, and respond to complaints made by a local unit of government
about a cannabis business. Complaints may include alleged violations of local ordinances or
other alleged violations. At a minimum, the expedited complaint process shall require the
office to provide an initial response to the complaint within seven days and perform any
necessary inspections within 30 days. Nothing in this paragraph prohibits a local unit of
government from enforcing a local ordinance.” Minn. Stat. § 342.13(h)
12. Consider Seeking a Grant. The City is eligible to apply for a grant (CanNavigate) from the
Department of Employment and Economic Development to be used by the City to help
individuals navigate the regulatory structure of the legal cannabis industry. Later, there is
reference about using the funds “for both developing technical assistance resources relevant
to the regulator structure of the legal cannabis industry and for providing technical assistance
or navigation services to individuals.” Minn. Stat. § 116J.6595.
13. City Cannabis Business. The City can establish its own retail business if it obtains the
required licenses. Minn. Stat. § 342.32, subd. 5.
14. Cannabis Event Approval. “A cannabis event organizer must receive local approval,
including obtaining any necessary permits or licenses issued by a local unit of government,
before holding a cannabis event.” Minn. Stat. § 342.40, subd. 1.
15. Use in Public. The City may adopt an ordinance making it a petty misdemeanor offense to
use cannabis in a public place, but limits what can be considered a public place. Minn. Stat.
§ 152.0263. This section goes into effect on August 1, 2023.
16. Aid to Cities. The City cannot impose a tax on the sale of cannabis. Minn. Stat. § 295.82.
However, 20% of the taxes the state imposes are to go to a local government cannabis aid
account in the special revenue fund. Minn. Stat. § 295.81, subd. 10. The aid will be
“distributed proportionally to each city according to the number of cannabis businesses
located in the city as compared to the number of cannabis businesses in all cities . . . .”
Minn. Stat. § 477A.31, subd. 4. Fifty percent of the amount collected in that account will be
paid out as aid starting in 2024. The aid must be paid by December 26 annually. Minn. Stat.
§ 477A.31, subd. 5.
1
CR205-30-887344.v1
CITY OF CRYSTAL
Ordinance No. _____
AN INTERIM ORDINANCE AUTHORIZING A STUDY AND IMPOSING A
MORATORIUM ON THE OPERATION OF CANNABIS BUSINESSES
THE CITY OF CRYSTAL ORDAINS:
ARTICLE I. Authority and Legislative Findings.
A. The Minnesota Legislature enacted, and Governor signed, 2023 Minnesota Session Laws,
Chapter 63 – H.F. No. 100 (“Act”), which is comprehensive legislation relating to cannabis
including, but not limited to, the establishment of the Office of Cannabis Management
(“OCM”), legalizing and limiting the possession and use of cannabis and certain hemp
products by adults, providing for the licensing, inspection, and regulation of cannabis
businesses and hemp businesses, taxing the sale of cannabis flower, cannabis products, and
certain hemp products, establishing grant and loan programs, amending criminal penalties,
providing for expungement of certain convictions and providing for the temporary
regulation of certain edible cannabinoid products.
B. The Act provides local units of government certain authority related to cannabis businesses,
including the authority to (1) require local registration of certain cannabis businesses
operating retail establishments, (2) adopt reasonable restrictions on the time, place, and
manner of the operation of cannabis businesses, provided that such restrictions do not
prohibit the establishment or operation of a cannabis businesses, (3) limit the number of
certain cannabis businesses based on the population of the community, and (4) 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.
C. The Act requires the OCM, which was established effective July 1, 2023, to work with
local governments to develop model ordinances for reasonable restrictions on the time,
place, and manner of the operation of cannabis businesses. The Act also requires the OCM
to establish additional rules and regulations relating to the operation of cannabis businesses.
The City will benefit from reviewing and analyzing the OCM’s model ordinances, rules
and regulations before making any decisions related to the regulation of cannabis
businesses in the City.
D. The Act (Minnesota Statutes, section 342.13(e)) expressly allows a local unit of
government that is conducting studies or has authorized a study to be conducted or has held
or scheduled a hearing for the purpose of considering adoption or amendment of reasonable
restrictions on the time, place and manner of the operation of cannabis businesses to adopt
an interim ordinance applicable to all or part of its jurisdiction for the purpose of protecting
the planning process and the health, safety, and welfare of its citizens. The interim
ordinance may regulate, restrict, or prohibit the operation of cannabis businesses within the
jurisdiction or a portion thereof until January 1, 2025.
2
CR205-30-887344.v1
E. Given the uncertainty regarding the model ordinances to be developed by the OCM and
the broad scope of the changes to Minnesota law brought about by the Act, the City desires
to adopt an interim ordinance for the purpose of protecting the planning process and the
health, safety, and welfare of its citizens.
F. The City desires to conduct a study for the purpose of considering the adoption or
amendment of reasonable restrictions on the time, place and manner of the operation of
cannabis businesses as well as the other regulations local units of government may adopt
under the Act.
G. After providing at least 10 days published notice, the City Council held a public hearing
and provided an opportunity for the public to be heard regarding this matter before acting
to adopt this Ordinance.
ARTICLE II. Definitions. For purposes of this Ordinance, the following terms shall have the
meaning given them in this section.
(a) “Act” means 2023 Minnesota Session Laws, Chapter 63 (H.F. No. 100).
(b) “Cannabis Business” has the meaning given the term in Minnesota Statutes, section
342.01, subdivision 14.
(c) “City” means the City of Crystal.
(d) “Edible Cannabinoid Product” has the meaning given the term in Minnesota Statutes,
section 151.72, subdivision 1(f).
(e) “OCM” means the Office of Cannabis Management, established as set forth in Minnesota
Statutes, section 342.02, subd. 1.
(f) “Ordinance” means this interim ordinance, which is adopted pursuant to Minnesota
Statutes, section 342.13(e).
ARTICLE III. Study Authorized. The City Council hereby authorizes and directs the City
Manager to have City staff conduct a study regarding the adoption or amendment of reasonable
restrictions on the time, place, and manner of the operation of Cannabis Businesses, as well as the
other potential local regulations allowed under the Act, and report to the City Council on the
potential regulation of Cannabis Businesses. The study must include a review of the model
ordinances the OCM is directed to draft under Minnesota Statutes, section 342.13(d), an analysis
of potential setback regulations allowed under Minnesota Statues, section 342.13(c), and such
other matters as staff may determine are relevant to the City Council’s consideration of this matter.
The report shall include the City staff’s recommendations on whether the City Council should
adopt regulations and, if so, the recommended types of regulations.
3
CR205-30-887344.v1
ARTICLE IV. Moratorium. A moratorium is hereby imposed on the establishment and operation
of a Cannabis Business within the City. During the term of this Ordinance, no business, person,
or entity may establish or operate a Cannabis Business within the jurisdictional boundaries of the
City. The City shall not accept, process, or act on any application, site plan, building permit, zoning
request, or other approval, including any requested confirmation, certification, approval, or other
request from the OCM or other governmental entity requesting the City to review an application
or proposal for a business proposing to engage in the operation of a Cannabis Business.
ARTICLE V. Violation. During the term of the moratorium, it is a violation of this Ordinance for
any business, person, or entity to establish or operate a Cannabis Business within the City.
ARTICLE VI. Exceptions. The moratorium imposed by this Ordinance does not apply to: (1) the
continued operation of a business as part of the Medical Cannabis Program administered by the
Minnesota Department of Health that was lawfully operating within the City prior to July 1, 2023;
(2) the lawful sale of Edible Cannabinoid Products in compliance with Minnesota Statutes, section
151.72 once the City’s current moratorium on such sales ends; or (3) sales of Edible Cannabinoid
Products at an exclusive liquor store in accordance with Minnesota Statutes, section 340A.412,
subdivision 14. Nothing in this Article exempts a business, person, or entity that is selling Edible
Cannabinoid Products from having to comply with all requirements and prohibitions of applicable
laws and ordinances.
ARTICLE VII. Enforcement. Violation of this Ordinance is a misdemeanor. The City may also
enforce this Ordinance by mandamus, injunction, or other appropriate civil remedy in any court of
competent jurisdiction. A violation of this Ordinance is also subject to the City’s general penalty
in the City’s Municipal Code and may result in the City reporting the violation to the OCM if
relevant to OCM licensing. The City Council hereby authorizes the City Manager, in consultation
with the City Attorney, to initiate any legal action deemed necessary to secure compliance with
this Ordinance.
ARTICLE VIII. Duration. This Ordinance shall become effective on the first day of publication
after adoption and shall remain in effect until January 1, 2025. This Ordinance may be repealed
earlier upon the effective date of an ordinance adopting or amending reasonable restrictions on the
time, place, and manner of the operation of a Cannabis Business within the City or by resolution
of the City Council terminating this Ordinance prior to the expiration date.
ARTICLE IX. Severability. Every section, provision, and part of this Ordinance is declared
severable from every other section, provision, and part thereof. If any section, provision, or part
of this Ordinance is held to be invalid by a court of competent jurisdiction, such judgment shall
not invalidate any other section, provision, or part of this Ordinance.
Adopted this __ day of _____________ 2023.
4
CR205-30-887344.v1
BY THE CITY COUNCIL
__________________________________
Jim Adams, Mayor
Attest:____________________________
Christina Serres, City Clerk
First Reading: ____________, 2023
Second Reading: __________, 2023
Council Adoption:_________, 2023
Publication:
Effective Date: