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2024.10.22 - Packet for Work Session 4141 Douglas Drive North • Crystal, Minnesota 55422-1696 Tel: (763) 531-1000 • Fax: (763) 531-1188 • www.crystalmn.gov Crystal Planning Commission Agenda Summary Tuesday, October 22, 2024 7 p.m. Conference Room A in Crystal City Hall and Zoom Video Conference Zoom call information: https://go.crystalmn.gov/Oct22 (meeting ID is 833 9652 2429 and password is 414141) or call-in toll free at 888-475-4499 1. Work Session* a. Discussed proposed cannabis-related amendments to the Unified Development Code (UDC) 2. Adjournment * Items for which supporting materials are included in the meeting packet CR205\30\979358.v2 MEMORANDUM TO: Crystal Planning Commission FROM: Rachel G Tierney, City Attorney DATE: October 2, 2024 RE: Cannabis Zoning Amendments In June, the City adopted a zoning ordinance regulating retail uses of cannabis. In January of 2025, the State of Minnesota is scheduled to begin issuing licenses for all cannabis uses, including manufacturing and cultivation. Under the Cannabis Act (Minn. Stat. Chapter 342), prior to the issuance of location-specific state licenses, the City will be asked for a certification of zoning compliance. This certification is required as a required-step in a business obtaining a state license. In order to provide such certification, the City must complete its work and determine where manufacturing and cultivation uses will be permitted. Attached to this memo, please find annotated amendments to the June zoning changes. This document builds on what was done in June, and provides suggestions and options to regulate the remaining uses. DESIGNATING ZONING DISTRICTS The City cannot prohibit cannabis uses and should amend its zoning code to incorporate them. The City can amend its zoning code to specifically allow each license type in a particular district or it can choose to simply allow cannabis businesses in zones with similar uses (e.g., retailers in commercial zones with other retail). The following table includes each license type and very high- level information on the businesses operations to help guide the City in determining appropriate zoning designations. The city can place these uses into a particular zoning district as permitted or conditional. License Type Main Function Use Type(s) Cannabis Retailer Sales to the customers Commercial Medical Cannabis Retailer Sales to registered patients Commercial Cannabis Delivery Service Deliver products directly to customers, can be stand-alone delivery between independent retail and customers, or connect with retail Commercial Lower Potency Hemp Retailer Sale of hemp products directly to customers Commercial CR205\30\979358.v2 Cannabis Cultivator Growing and tending to cannabis and hemp plants Indoor: Industrial, Commercial Outdoor: Agricultural Medical Cannabis Cultivator Growing cannabis plants Industrial/Agricultural Cannabis Manufacturer Creating cannabis products that are sold to retailers Industrial Medical Cannabis Manufacturer Creating cannabis products that are sold to medical retailers Industrial Lower-Potency Hemp Edible Manufacturer Creating lower-potency hemp products that are sold to retailers Industrial Cannabis Testing Testing cannabis and hemp products Industrial Cannabis Wholesaler Warehousing and Storage Industrial Cannabis Transporter Transport products from one license type to another, not direct to consumer Industrial, Commercial Medical Cannabis Combination Business Cultivation, Manufacturing, and Retail to both the general public and medical patients Industrial/Agricultural, Commercial Cannabis Mezzobusiness Cultivation, Manufacturing, and up to 3 Retail locations Industrial/Agricultural, Commercial Cannabis Microbusiness Cultivation, Manufacturing, and Retail Industrial/Agricultural, Commercial DRAFT 5-2-24 1 CR205\30\979461.v2 CITY OF CRYSTAL ORDINANCE #2024-____ AN ORDINANCE AMENDING THE CRYSTAL UNIFIED DEVELOPMENT CODE REGARDING CANNABIS BUSINESSES The City of Crystal ordains: ARTICLE I. Chapter V, Section 505 of the Crystal city code is hereby amended as follows and renumbering the subdivisions as may be needed: Subd. . Cannabinoid. “Cannabinoid” has the meaning given the term in Minnesota Statutes, section 342.01, subdivision 10. Subd. _. Cannabis business. “Cannabis business” has the meaning given the term in Minnesota Statutes, section 342.01, subdivision 14. Subd. . Cannabis Delivery/Transportation Business. “Cannabis Delivery/Transoration Business means a business one of the following issued by the State of Minnesota Office of Cannabis Management: a cannabis delivery service license, a cannabis business license with a delivery service endorsement, a cannabis transporter license, or a cannabis business license with a transportation endorsement from the State of Minnesota Office of Cannabis Management. [Note: Cannabis delivery is either stand-alone (e.g. Grub Hub) or connected with a cannabis business, and delivery is from a retail location direct to the customer. It may or may not include multiple vehicles. Cannabis transporters deliver only between licensed cannabis businesses, not the general public. These two uses can be under one definition if the City wants them in the same zoning district, or separately defined for separate zoning.] Subd. ___. Cannabis Lounge. “Cannabis Lounge” means a portion of the premises of a licensed cannabis micro-business with an on-site consumption endorsement by the State of Minnesota Office of Cannabis Management for on-site consumption of edible cannabis products and lower-potency hemp edibles. [Note: A Cannabis Lounge is a concept some cities are adopting to recognize and provide regulation for cannabis businesses that permit on-site consumption. This is not a distinct license type but is an add-on endorsement to a cannabis microbusiness. The City is not required to regulate this use in the zoning code and can rely on the underlying regulation of the microbusiness.] Subd. ___. Cannabis Or Hemp Industrial Business. “Cannabis Or Hemp Industrial Business” means a business with a one of the following issued by the Office of Cannabis Management: a DRAFT 5-2-24 2 CR205\30\979461.v2 cannabis manufacturer license, a cannabis wholesaler license, a cannabis testing facility license, a cannabis cultivator license, a medical cannabis manufacturer, a medical cannabis combination business license, a medical cannabis cultivator license, a lower-potency hemp edible manufacturing license, a lower-potency hemp cultivator license or any license with a manufacturing or testing endorsement. [Note: The above is an alternative to simply regulating cannabis uses as “Industrial Uses (Indoor)”. This approach aligns with the City’s earlier action adding the cannabis-specific retail uses to Table 3 and Table 4. The City can choose either approach.] Subd. _. Cannabis product. “Cannabis product” means any product containing a cannabinoid, including a Lower-Potency Hemp Edible as defined by Minn. Stat. § 342.01, Subd. 50, that a registered cannabis business is authorized by its state-issued license to sell to the public at retail. [NOTE: The above change is for clarity purposes only. The ordinance adopted in June includes LPHE in its definition, but the inclusion is not explicit and requires consulting several sections of the Cannabis Act. Because the statutes are lengthy and complicated, for ease of use and transparency, I recommend explicitly including LPHE within the adopted definition.] Subd. _. Cannabis retailer business. “Cannabis retailer business” means a cannabis business that is a cannabis retailer, the retail portion of a cannabis mezzobusiness with a retail operations endorsement, or the retail portion of a cannabis microbusiness with a retail operations endorsement, as those terms are defined in Minnesota Statutes, section 342.01 and applicable Minnesota administrative rules. [Note: Cannabis Mezzobusinesses and Mircobusinsses allow cultivation, manufacturing, and retail. These activities may or may not occur in a single location. Therefore, is necessary to clarify that the zoning district regulations of retail activities do not apply to cultivation or manufacturing.] Subd. ____.Hemp Business. “Hemp Business” has the meaning given the term in Minnesota Statutes § 342.01, subd. 24. Subd. _____. Lower-Potency Hemp Retailer Business. “Lower-Potency Hemp retailer Business” means a hemp business with a lower-potency hemp edible retailer license issued by the State of Minnesota Office of Cannabis Management. [Note: The two terms above are included in the definition of “principal cannabis business” but are not defined in the ordinance.] Subd. . Off-sale liquor store. “Off-sale liquor store” means a retail business licensed to sell liquor at off-sale and that derives more than 50% of its gross revenue from the sale of liquor. DRAFT 5-2-24 3 CR205\30\979461.v2 Subd. ___. On-sale establishment. “On-sale establishment” means a business holding a license under Crystal city code section 1200.05 for on-sale full liquor. [This term is needed to recognize that the Cannabis Act allows on-site consumption of lower-potency hemp edibles (e.g. “gummies” and beverages) within establishments that hold an on-sale liquor license.] Subd. . Principal cannabis business. “Principal cannabis business” means a cannabis retailer business or a lower-potency hemp retailer business that derives more than 50% of its gross revenue from the sale of cannabis products. Subd. . Tobacco products. “Tobacco products” means tobacco, tobacco-related devices, and electronic delivery devices as those terms are defined in Minnesota Statutes, section 609.685, subdivision 1. Subd. . Tobacco shop. “Tobacco shop” means a retail establishment licensed by the city to sell tobacco and that derives more than 50% of its gross revenue from the sale of tobacco products. ARTICLE II. Permitted Principal Uses. Chapter V, Subsection 515.17, Table 3 of the Crystal city code is hereby amended by adding additional uses as follows: Use R-1 R-2 R-3 C TC I AP Use-Specific Standards in Section: Principal Cannabis Business - - - P P P - 515.19, subdivision 4(n) Off-Sale Liquor Store - - - P P P - 1200 & 515.19, subdivision 4(o) Tobacco Shop - - - P P P - 1105 & 515.19, subdivision 4(p) Cannabis Delivery/Transportation Business ? ? ? Cannabis or Hemp Industrial Business ? ? ? ARTICLE III. Use Specific Standards for Principal Uses. Chapter V, Subsection 515.19, subdivision 4 of the Crystal city code is hereby amended as follows: (i) Retail establishments. Retail establishments are subject to the following standards: (1) Repair is allowed for a retail establishment, but a conditional use permit is required if the repair is done outdoors. The applicant shall demonstrate that such outdoor repair will not negatively impact neighboring properties; DRAFT 5-2-24 4 CR205\30\979461.v2 (2) Within the TC district, retail space is limited to 15,000 gross square feet per floor. Additional square footage may be allowed with a conditional use permit, not to exceed a building footprint of 20,000 square feet; (3) Within the Commercial district, retail establishments may have up to 50% of the gross floor area as storage or warehouse space; and (4) Within the Industrial district, retail establishments are limited to 50% of the gross floor area of the principal use. (5) Any retail establishment engaging in the sale at retail of any cannabis product, tobacco, or liquor at off-sale shall not be located within 500 feet of a school, public park, or residential treatment facility. The following apply for the purposes of this paragraph. (i) The distance between properties shall be measured from the closest points between the lot containing the business and the lot containing the identified use to which the buffer applies. (ii) The term “school” means a public or private facility that provides educational programs to ten or more people who are under the age of 21 in a classroom setting. The term includes, but is not limited to, any school operated by an independent school district or a charter school operating under Minnesota Statutes, chapter 124E. The term does not include the Robbinsdale Transition Center or similar adult education schools. (iii) The term “public park” means an open space, playground, athletic field, or other facility owned by the city, a school district, the county, or other public entity that is open to, and regularly used by, those under the age of 21. (iv) The term “residential treatment facility” means a facility providing mental health, alcohol, or drug treatment services established or operated in accordance with Minnesota Rules, chapter 2960, or Minnesota Statutes, chapters 245G or 260C. [Note: Consider whether to add buffers for non-retail uses.] . . . (n) Principal cannabis businesses. Principal cannabis businesses are subject to the following standards: (1) Shall comply with the standards imposed on retail establishments under Crystal city code, subsection 515.19, subdivision 4(i). (2) Shall not be located in any buffer zone identified in subdivision 4(i)(5) of this subsection. DRAFT 5-2-24 5 CR205\30\979461.v2 (3) Shall only be located in a zoning district in which the use is allowed, and then only upon obtaining all licenses that may be required. (4) It must be registered with the city in accordance with Minnesota Statutes, section 342.22 and the registration procedures established by the city. (5) In accordance with Minnesota Statutes, section 342.13(i), no more than two cannabis retailer businesses may be located within the city. If, however, Hennepin County has one active registration for cannabis retailer businesses for every 12,500 residents in the county, then no cannabis retailer businesses are allowed in the city and the city shall not undertake process in Minnesota Statutes, section 342.22 to register any such business. (o) Off-sale liquor stores. Off-sale liquor stores are subject to the following standards: (1) Shall comply with the standards imposed on retail establishments under subdivision 4(i) of this subsection. (2) Shall not be located in any buffer zone identified in subdivision 4(i)(5) of this subsection. (p) Tobacco shops. Tobacco shops are subject to the following standards: (1) Shall comply with the standards imposed on retail establishments under subdivision 4(i) of this subsection. (2) Shall not be located in any buffer zone identified in subdivision 4(i)(5) of this subsection. ARTICLE IV. Permitted Accessory Uses. Chapter V, Subsection 515.21, Table 4 of the Crystal city code is hereby amended by adding additional uses as follows: Accessory Use R-1 R-2 R-3 C TC I AP Zoning Certificate Required Use-Specific Standards in Subsection: Retail sale of Cannabis products, Off-sale liquor, or Tobacco products - - - P P P - No See note [4] Cannabis Lounge ? ? ? 4. The sale of cannabis products as an accessory use to a retail use is subject to standards in subsection 515.23, subdivision 2(f), the sale of liquor at off-sale as an accessory use is subject to standards in section 1200 and subsection 515.23, subdivision 2(f), and the sale of tobacco DRAFT 5-2-24 6 CR205\30\979461.v2 products as an accessory use is subject to standards in section 1105 and subsection 515.23, subdivision 2(f). The on-site consumption of cannabis products as an accessory use to an on-sale establishment is subject to standards in subdivision 515.23, subdivision 2(g). The on-site consumption of cannabis products as an accessory use to a cannabis microbusiness is subject to the standards in subdivision 515.23, subdivision 2(h) ARTICLE V. Use Specific Standards for Accessory Uses. Chapter V, Subsection 515.23, subdivision 2 of the Crystal city code is hereby amended as follows: (f) Sale of cannabis products, off-sale liquor, and tobacco products. Any retail establishment that sells cannabis products, off-sale liquor, or tobacco products at retail as an accessory use to its principal use is subject to the following standards: (1) The sale of such products shall only be accessory to, and occur within, a retail establishment. If a retail establishment derives more than 50% of its gross revenue from the sale of any one of the products, such sales cannot be considered an accessory use and the retail establishment must obtain all permits or permissions required to sell the product as its principal use. (2) The retail establishment must possess such licenses as may be required to sell such products. (3) The sale of such products is only allowed if the lot containing the retail establishment is located outside of the buffers zones identified in Crystal city code, subsection 515.19, subdivision 4(i)(5). (4) If the retail establishment is selling cannabis products, it must be registered with the city in accordance with Minnesota Statutes, section 342.22 and the procedures established by the city. (g) On-site consumption of cannabis products at establishments holding an on-sale license issued under Crystal city code section 1200.05. Notwithstanding paragraph (f) above, any on-sale establishment that sells cannabis products for on-site consumption is subject to the following standards: (1) The sale of such products shall only be accessory to, and occur within, an on-sale establishment. (2) The on-sale establishment must possess a lower-potency hemp retailer license and an on-site consumption endorsement issued by the State of Minnesota Office of Cannabis Management. (3) If the retail establishment is selling cannabis products, it must be registered with the city in accordance with Minnesota Statutes, section 342.22 and the procedures established by the city. DRAFT 5-2-24 7 CR205\30\979461.v2 [Note: These can be added to or eliminated. They reflect existing law.] (h) Cannabis Lounges. Notwithstanding paragraph (f) above, any cannabis microbusiness that sells cannabis products for on-site consumption is subject to the following standards: (4) The sale of such products shall only be accessory to a cannabis microbusiness with a retail operations endorsement issued by the State of Minnesota Office of Cannabis Management. (5) The cannabis microbusiness with a retail endorsement must possess an on-site consumption endorsement issued by the State of Minnesota Office of Cannabis Management. (6) The cannabis microbusiness must be registered with the city in accordance with Minnesota Statutes, section 342.22 and the procedures established by the city. [Note: These can be added to or eliminated. They reflect existing law.] ARTICLE VI. Incorporate. City staff is authorized and directed to update the table of contents and to make such other changes as are necessary to incorporate the amendments adopted by this Ordinance into the Crystal city code. ARTICLE VII. Effective Date. This ordinance is effective on January 1, 2025. BY THE CITY COUNCIL Jim Adams, Mayor ATTEST: ____________________________ Christina Serres, City Clerk Double underlined material is being added and stricken material is being deleted. First Reading: ____________, 2024 Second Reading: __________, 2024 DRAFT 5-2-24 8 CR205\30\979461.v2 Council Adoption:_________, 2024 Publication: Effective Date: