Ord No 2023- 04 An Interim Ordinance Requiring a License and Imposing Regulations on the Retail Sale of Edible Cannabinoid ProductsCITY OF CRYSTAL
ORDINANCE NO. 2023 - 04
AN INTERIM ORDINANCE REQUIRING A LICENSE AND IMPOSING
REGULATIONS ON THE RETAIL SALE OF EDIBLE CANNABINOID PRODUCTS
The City of Crystal ordains:
Section 1. Purpose. The purpose of this ordinance is to establish licensing and sale regulations
for the retail sale of edible cannabinoid products derived from hemp as provided in Minnesota
Statutes, section 151.72.
Section 2. Lelzislative Findinl4s. The city council hereby finds and determines as follows:
(a) In 2022, the Minnesota Legislature's amended Minnesota Statutes, section 151.72 to
expressly allow the sale of edible products that contain tetrahydrocannabinol
("THC") without any associated licensing requirements.
(b) The unexpected change in the law, the lack of licensing and other regulatory
standards, and the concerns regarding the potential impacts of the sale of edible
cannabinoid products resulted in the city council acting on August 16, 2022 to enact
a one-year moratorium on the sale of THC Products.
(e) Since that time, the city has studied the issue and anticipated the Legislature would
provide additional guidance and regulation during the 2023 session on the sale of
such products. While the Legislature did adopt a 321-page cannabis bill, it essentially
maintained the status quo regarding the sale of edible cannabinoid products under
Minnesota Statutes, section 151.72 until the newly established Office of Cannabis
Management begins licensing cannabis businesses.
(d) Because the Office of Cannabis Management is not likely to begin issuing licenses
to sell lower -potency hemp products until early 2025, and faced with continuing
uncertainties associated with the sale of edible carnabinoid products, the city council
determines it is in the best interests of the city to require a license to sell such products
and to impose related regulations until the Office of Cannabis Management assumes
the licensing of cannabis businesses.
(e) Section 3.065 of the Crystal City Charter expressly authorizes the City Council to
adopt an interim ordinance imposing temporary regulations on a specific matter to
protect the public health, safety, and welfare of the City's residents. Such an interim
ordinance can be adopted at the meeting at which it is introduced and can be made
effective immediately.
(f) The City Council is processing an ordinance to require a license and to impose
regulations on businesses proposed to sell edible cannabinoid products. However,
because the ordinance must go through two readings and wait 30 day after adoption
before it goes into effect, the ordinance will not be in effect before the previously
adopted moratorium expires. Therefore, the City Council desires to adopt temporary
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regulations on edible cannabinoid retailers while it further studies and considers the
regulations as the regular ordinance works its way through the adoption process.
Section 3. Definitions. For the purposes of this ordinance, the following terms shall have the
meanings given them in this section. If a term is not defined herein, it shall have the meaning
given it in Minnesota Statutes, section 151.72 or, if not defined therein, the definition given the
term in the Crystal city code.
Subd. 1. Advertisement. "Advertisement" has the meaning given the term in Minnesota
Statutes, section 342.01, subdivision 5.
Subd. 2. City. "City" means the City of Crystal, Minnesota.
Subd. 3. Compliance Checks. "Compliance checks" means the system the city uses to
investigate and ensure that those authorized to sell edible cannabinoid products are following and
complying with the requirements of this ordinance and state laws. Compliance checks involve the
use of compliance check minors, as authorized by this ordinance, who purchase or attempt to
purchase edible cannabinoid products. Compliance checks may also be conducted by the city or
other units of government for educational, research, and training purposes or for investigating or
enforcing federal, state, or local laws and regulations relating to edible cannabinoid products.
Subd. 4. Controlled Substance. "Controlled substance" has the meaning given the term
in Minnesota Statutes, section 152.01, subdivision 4, as amended.
Subd. 5. Crystal City Code. "Crystal city code" means the most current version of The
Crystal City Code.
Subd. 6. Delivery Sales. "Delivery sales" mean the sale of any edible cannabinoid product
to any person for personal consumption and not for resale when the sale is conducted by any means
other than an in -person, over-the-counter sales transaction in a retail establishment. Delivery sales
include, but are not limited to, the sale of any edible cannabinoid products when the sale is
conducted by telephone, other voice transmission, mail, the internet, or app-based service.
Delivery sales include delivery by licensees or third parties by any means, including curbside pick-
up.
Subd. 7. Edible Cannabinoid Product. "Edible cannabinoid product" means any product
containing nonintoxicating cannabinoids extracted from hemp that meets the requirements to be
sold for human or animal consumption under Minnesota Statutes, section 151.72. The term
includes edible cannabinoid products as defined in Minnesota Statutes, section 151.72, subdivision
1(f). The term does not include medical cannabis as defined in Minnesota Statutes, section 152.22,
subdivision 6.
Subd. 8. Eligible Business. "Eligible business" means a business located within the city
that has a current tobacco license to sell tobacco or tobacco products at retail issued by the city
under Chapter XI, Section 1105 of the Crystal city code, or that has a current on -sale or off -sale
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liquor license to sell intoxicating liquor issued by the city under Chapter XII of the Crystal city
code.
Subd. 9. Hemp. "Hemp" has the same meaning given the term in Minnesota Statutes,
section 18K.02, subdivision 3, as it may be amended.
Subd. 10. Label. "Label" has the same meaning given the term in Minnesota Statutes,
section 151.01, subdivision 18, as it may be amended.
Subd. 11. Labeling. "Labeling" has the same meaning given the term in Minnesota
Statutes, section 151.72, subdivision 1(i).
Subd. 12. Licensee. "Licensee" means the entity issued a license under this ordinance to
sell edible cannabinoid products at retail.
Subd. 13. Moveable Place of Business. "Moveable place of business" means any form of
business operated out of a kiosk, truck, van, automobile, or other type of vehicle or transportable
shelter and not a fixed address storefront or other permanent type of structure authorized for sales
transactions.
Subd. 14. Lot. "Lot" has the same meaning given the term in Section 505, subdivision 90
of the Crystal city code.
Subd. 15. Ordinance. "Ordinance" means this ordinance requiring a license and imposing
regulations on the retail sale of edible cannabinoid products.
Subd. 16. Outdoor Advertisement. "Outdoor advertisement" has the meaning given the
term in Minnesota Statutes, section 342.01, subdivision 58.
Subd. 17. Product Label. "Product label" has the same meaning given the term "label" in
Minnesota Statutes, section 151.72, subdivision 1(h).
Subd. 18. Public Park. "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.
Subd. 19. Residential Treatment Facility. "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.
Subd. 20. _School. "School" means a public or private facility that provides educational
programs to 10 or more persons that 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.
Subd. 21. THC. Means tetrahydrocannabinol.
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Subd. 22. Self -Service Merchandising. Open displays of edible cannabinoid products in
any manner where any person has access to the edible cannabinoid products without the assistance
or intervention of the licensee or the licensee's employee. Assistance or intervention means the
actual physical exchange of the edible cannabinoid product between the customer and the licensee
or employee.
Subd. 23. Vending Machine. Any mechanical, electric, or electronic, or other type of
device that dispenses edible cannabinoid products upon the insertion of money, tokens, or other
form of payment directly into the machine by the person seeking to purchase the edible
cannabinoid product.
Section 4. License.
Subd. 1. Required. No person may directly or indirectly, or by means of any device,
keep for retail sale, sell at retail, offer to sell, or otherwise dispose of any edible cannabinoid
product at retail at any place in the city without first having obtained a license from the city issued
in accordance with the provisions of this ordinance.
Subd.2. Eligibility. The city shall only issue a license to sell edible cannabinoid
products to an eligible business that qualifies to receive a license under the requirements of this
ordinance.
Subd. 3. Manufacturing Exception. No license is required under this ordinance for the
manufacturing of edible cannabinoid products or the sale by a manufacturer of its products to
resellers, provided the manufacturer does not sell edible cannabinoid products directly to the
public.
Section 5. Ineligible Places and Operations. The city shall not issue or renew a license under
this ordinance to sell edible cannabinoid products to:
(a) A business or operation that does not qualify as an eligible business under this
ordinance;
(b) A business located, or proposed to be located, on a lot that is within:
(1) 1,000 feet of a school;
(2) 500 feet of a residential treatment facility; or
(3) 500 feet of a public park;
Distance shall be measured between boundaries of the lot containing the business
and the lot containing the school, treatment facility, or public park. If a lot contains
both a school and a public park, the 1,000 foot distance shall apply.
(c) A business providing delivery sales of any edible cannabinoid products;
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(d) A moveable place of business;
(e) A business utilizing a vending machine to sell edible cannabinoid products;
(f) A business located at a premise on which taxes, assessments, or other financial claims
of the city are delinquent and unpaid. If an action has been commenced pursuant to
the provisions of Minnesota Statutes, chapter 278, questioning the amount or validity
of taxes, the city council may, on application by the licensee, waive strict compliance
with this provision; no waiver may be granted, however, for taxes, or any portion
thereof, which remain unpaid for a period exceeding one year after becoming due
unless such one-year period is extended through no fault of the licensee; or
(g) A business that is in violation of one or more provisions of the Crystal city code
related to its operations as an eligible business.
Section 6. Application Procedure. An application for a license shall be submitted and processed
in accordance with this section.
Subd. 1. License Application. An application for a new or renewed license to sell edible
cannabinoid products shall be made on a form provided by the city and filed, along with all
required fees, with the city clerk. The application shall contain the full name of the applicant, the
applicant's residential and business addresses, and telephone numbers, the name of the business
for which the license is sought, information to establish the business qualifies as an eligible
business, a site plan for the business, and any additional information the city deems necessary. If
the city clerk determines an application is incomplete, the city clerk shall provide the applicant
notice of the information necessary to make the application complete. The city shall not process
an application until it is made complete. Upon receipt of a completed application, the city clerk
shall forward the application to the Police Department to conduct a background investigation.
Subd. 2. Fees. No license shall be processed or issued under this ordinance until the
appropriate fees have been paid in fill. The fees for a license under this ordinance shall be
established by city council resolution. Fees are not prorated for licenses issued for less than a frill
year.
Subd. 3. Manager or Agent. If the applicant is a firm, association, partnership,
corporation, limited liability company, or joint venture, the application must include the name of
the natural person who will serve as the manager or agent of the licensed premises. Such manager
or agent must, by the terms of their written consent, (1) take frill responsibility for the conduct of
the licensed premises, and (2) serve as agent for service of notices and other process relating to the
license. A licensee must notify the city in writing within 14 days of any change in such manager
or agent indicating the name and address of the new manager or agent and the effective date of
such change.
Subd. 4. License Decision. The city council may grant or deny a license application.
The city council may also continue its consideration of a license if it determines it needs additional
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information before making its decision. Any of the following are grounds for denial or nonrenewal
of a license.
{�t} The business does not qualify as an eligible business or is an ineligible business or
operation under section 5 of this ordinance.
(b) The applicant is under the age of 21 years old.
(c) The applicant has been convicted within the past three years of any violation of a
federal, state, or local law, ordinance provision, or other regulation relating to edible
cannabinoid products, controlled substances, or the operation of the eligible business.
(d) The applicant has had a license to sell edible cannabinoid products, tobacco products,
or liquor suspended or revoked during the 12 months preceding the date of
application, or the applicant has or had an interest in another premises authorized to
sell edible cannabinoid products, whether in the city or in another jurisdiction, that
has had a license to sell edible cannabinoid products suspended or revoked during the
same time period, provided the applicant had an interest in the premises at the time
of the revocation or suspension, or at the time of the violation that led to the
revocation or suspension.
(e) The applicant is the spouse, parent, stepparent, grandparent, brother, or sister, by
blood or marriage, of a person ineligible for a license under this ordinance who the
city council determines is not the real party in interest or is not the beneficial owner
of the business to be operated under the license.
{F} The applicant is a business that does not have an operating manager or agent who is
eligible pursuant to the provisions of this ordinance.
(g) The applicant provides false or misleading information. Any false statement on an
application, or any willful omission of any information called for on such application
form, shall cause an automatic refusal of license, or if already issued, shall render any
license issued pursuant thereto void and of no effect upon written notice of the city.
(h) The proposed location does not meet all applicable zoning requirements or
requirements of this ordinance.
(i) The applicant is prohibited by federal or state law, local ordinance, or other
regulation, from holding such a license.
(j) The applicant failed to provide information required by the application or provided
false or misleading information.
Subd. 5. Term. All licenses issued under this ordinance shall expire on December 31 of
each calendar year, unless it is revoked, suspended, or forfeited prior to that date.
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Subd. 6. Renewal. An application to renew a license must be submitted at least 30 days
prior to the expiration of the current license. The issuance of a license issued under this ordinance
is a privilege and does not entitle the license holder to automatic renewal of the license.
Subd. 7. Non -Transferable. All licenses issued under this ordinance shall be valid only
on the premises for which the license was issued and only for the person or business to whom the
license was issued. The transfer of any license to another location, business, or person is prohibited.
Section 7. Operational Requirements.
Subd. 1. License Display. All licenses shall be posted and displayed in plain view of the
general public on the licensed premises.
Subd. 2. Responsibility. All licensees under this ordinance shall be responsible for the
actions of their employees in regard to the sale of edible cannabinoid products on the licensed
premises, and the sale of such an item by an employee shall be considered a sale by the licensee.
Subd. 3. Product Compliance. All edible cannabinoid products shall comply with the
requirements of Minnesota Statutes, section 151.72 including, but not limited to, that they do not
contain more than 0.3 percent of any tetrahydrocannabinol, more than five milligrams of any
tetrahydrocannabinol in a single serving, or more than a total of 50 milligrams of any
tetrahydrocannabinol per package.
Subd. 4. Product Display. All edible cannabinoid products shall be stored either: (a)
behind a counter or other area not freely accessible to customers; or (b) in a case or other storage
unit not left open and accessible to the general public.
Subd. 5. Age Posting. Notice of the legal sales age and age verification requirement
must be posted prominently and in plain view at all times at each location where edible cannabinoid
products are offered for sale. The required signage must be posted in a manner that is clearly visible
to anyone who is or is considering making a purchase.
Subd. 6. Ave Verification. A licensee's employees shall verify by means of government
issued photographic identification that any purchaser of an edible cannabinoid product is at least
21 years of age.
Subd. 7. Advertisement. A licensee shall not advertise edible cannabinoid products in a
manner that would violate any of the limitations imposed on the advertisement of lower -potency
hemp edibles under Minnesota Statutes, section 342.64, which is hereby incorporated by reference.
The City Council determines that using a neon, flashing, or moving image or message window
sign to advertise edible cannabinoid products is likely to appeal to individuals under 21 years of
age in violation of Minnesota Statutes, section 342.64, subdivision 1(5), and so is prohibited by
this Ordinance.
Subd. 8. Sales. Edible cannabinoid products may only be sold in a direct face-to-face
exchange between the licensee's employee and the consumer. The licensee's employees selling
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edible cannabinoid products must be at least 21 years old. It shall be a violation of this ordinance
for a licensee to give away, dispense, sell, or offer to sell any edible cannabinoid product in a
manner that violates any of the following:
(a) To a person under the age of 21 years old. It shall be an affirmative defense to the
violation of this section for a person to have reasonably relied upon proof of age;
(b) Through the use of a vending machine or similar automated dispensing device;
(c) In a manner that does not comply with the requirements of Minnesota Statutes,
section 151.72 including, but not limited to, the packaging, labeling, and other
requirements provided by that section;
(d) At any location outside of the licensed premises;
(e) By self-service, or in open displays which are accessible to the public without the
assistance or intervention of a store employee;
(fl By a mobile business, including but not limited to motorized vehicles, moveable sales
kiosks, or trailers. Licenses shall be issued to fixed location businesses only;
(g) By delivery sales;
(h) By any employee under the age of 21 years;
(i) To a visibly intoxicated person;
(j) By the means of providing samples of any edible cannabinoid product free of charge
or at a nominal cost; or
(k) To any other person, in any other manner or form prohibited by federal or state law
or regulation, or by local ordinance.
Subd. 9. Inspections. The premises licensed under this ordinance must be open to
inspection by any authorized representative of the city during regular business hours for purposes
of ensuring compliance with this ordinance.
Subd. 10. Revocation or Suspension. Any license issued under this ordinance may be
revoked or suspended by the city council for a violation of any provision of this ordinance as
provided herein.
Section 8. Other Prohibited Acts.
Subd. 1. Non -Compliant Products. No person shall sell or offer for sale a product
containing THC, including edible cannabinoid products, that does not meet all the applicable
requirements in Minnesota Statutes, section 151.72.
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Subd. 2. Presumptions. Edible cannabinoid products shall comply with the labeling
requirements in Minnesota Statutes, section 151.72, subdivision 5 and all other applicable labeling
requirements. The city may presume, for the purposes of enforcing this ordinance, an edible
cannabinoid product being offered for sale or that is sold by a licensee has been tested by an
independent lab as required in Minnesota Statutes, section 151.72, subdivision 4 and that the
information contained on the product label is accurate.
Subd. 3. Purchase for Others. It is a misdemeanor violation of this ordinance for any
person 21 years of age or older to purchase or otherwise obtain any edible cannabinoid product on
behalf of a person under the age of 21.
Section 9. Compliance Checks. The city may from time -to -time conduct unannounced
compliance checks of licensed establishments. No person used in compliance checks may attempt
to use a form of identification that misrepresents the person's age. All persons lawfully engaged
in a compliance check shall answer all questions about their age asked by the licensee or their
employee, and produce any identification, if any exists, for which they are asked. The city will
conduct a compliance check that involves the participation of a person at least 18 years of age, but
under the age of 21 to enter the licensed premises to attempt to purchase the edible cannabinoid
products. Persons used for the purpose of compliance checks shall be supervised by law
enforcement or other designated personnel. Nothing in this ordinance shall prohibit compliance
checks authorized by state or federal laws for businesses manufacturing, storing, or selling edible
cannabinoid products under any applicable federal or state law. The compliance checks authorized
by this ordinance are in addition to any other compliance checks that may be performed related to
the tobacco or liquor license held by an eligible business.
Section 10. License Actions.
Subd. 1. Basis for Action. The city may suspend, revoke, or nonrenew a license issued
under this ordinance for any of the following reasons:
(a) The applicant has been convicted within the past three years of any violation of a
federal, state, or local law, ordinance provision, or other regulation relating to the
licensed activity, or has had a license to sell edible cannabinoid products, tobacco, or
liquor revoked or suspended within the past five years;
(b) Fraud, misrepresentation, bribery, or incorrect statement contained in the application
for license, or made in carrying on the licensed activity;
(c) Actions that are unauthorized or otherwise beyond the scope of the license granted;
(d) Violation of any federal, state, or local regulation or provision;
(e) Failure to continuously comply with all conditions required as part of the license;
(f) failure to comply with the applicable zoning code;
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(g) Failure to pay an administrative penalty imposed by the city council; or
(h) The city discovers the license was mistakenly issued or renewed to a person, it shall
be revoked upon the discovery that the person was ineligible for the license under
this ordinance.
Subd. 2. Process. The city will provide a licensee at least 10 days written notice of a
hearing to be held before the city council on the potential suspension, revocation, or nonrenewal
of its license. The licensee shall be provided an opportunity to be heard at the hearing. If the city
council acts to suspend, revoke, or not renew the license, the city will provide the licensee a written
notice of the period of suspension, or of the revocation or nonrenewal. All sales of edible
cannabinoid products must cease during a suspension period or permanently upon revocation or
nonrenewal of the license.
Section 11. Violation. Unless expressly indicated otherwise, a violation of this ordinance is a
misdemeanor. The city may also impose administrative penalties on a licensee for violation of
this ordinance. Any administrative penalties may be imposed by the city council, or by
administrative citation, and shall be collected in accordance with the Crystal city code. Nothing in
this section shall prohibit the city from seeking prosecution as a misdemeanor for any alleged
violation of this ordinance.
Section 12. Severability and Savings. If any section or portion of this ordinance is found
unconstitutional or otherwise invalid or unenforceable by a court of competent jurisdiction, that
finding shall not serve as invalidation or affect the validity and enforceability of any other section
or provision of this ordinance.
Section 13. Effective Date and Term. This ordinance shall become effective immediately and shall
terminate upon the effective date of the regular ordinance adopted by the City council imposing
licensing and related requires on businesses selling edible cannabinoid products in the city.
Section 14. Incorporation. This ordinance incorporates by reference the sections or provisions of the
Crystal city code as may be needed to give effect to the provisions of this ordinance and to otherwise
carry out its intent.
Section 15. Not Coded. Because this ordinance has a limited duration, it will not be codified into
the Crystal city code.
Section 16. Study. The City Manager is hereby authorized and directed to continue the study the City
previously initiated on edible cannabinoid retailers. The purpose of the continued study is to focus on
the regulations proposed in the regular ordinance to identify and advise the City Council on whether
any amendments should be made to the proposed regulations before final adoption.
Adopted this 15�' day of August 2023.
BY THE CITY COUNCIL
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Jim A ams, Mayor
ATTEST:
Uufxo&'a)-
Christina Serres, City Clerk
Council Adoption & Effective Date: August 15, 2023
Publication: August 24, 2023
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