City Council - Workshop Meetings

City Council Workshop Meeting July 19, 2023 | Ash North and South Conference Rooms Following City Council Meeting Approximately 8:10 p.m. This City Council Workshop meeting is taking place virtually and at Woodbury City Hall in the Ash North and South Conference Room. Members of the public may attend the meeting in person and may also join the meeting using a computer, tablet or smartphone and accessing the virtual meeting link at woodburymn.gov/VirtualMeetings Watch the Live Meeting Public comments will be accepted during the meeting both in person and virtually. Virtual questions should be submitted via the online Q&A feature within the virtual meeting link. Questions regarding the meeting will be also taken between the hours of 8:00 a.m. to 4:30 p.m. at 651-714-3524 or at council@woodburymn.gov. Questions received after 4:30 p.m. will be responded to in the next three to seven business days. Please note that all agenda times are estimates. Workshop Agenda 8:10 p.m. 1. New Cannabis Law Introduction 23-164 9:20 p.m. 2. Administrator Comments and Updates1 9:25 p.m. 3. Mayor and City Council Comments and Commission Liaison Updates1 9:30 p.m. 4. Adjournment 1 Items under comments and updates are intended to be informational or of brief inquiry. More substantial discussion of matters under comments and updates should be scheduled for a future agenda. The City of Woodbury is subject to Title II of the Americans with Disabilities Act which prohibits discrimination on the basis of disability by public entities. The City is committed to full implementation of the Act to our services, programs, and activities. Information regarding the provision of the Americans with Disabilities Act is available from the City Administrator's office at (651) 714-3523. Auxiliary aids for disabled persons are available upon request at least 72 hours in advance of an event. Please call the ADA Coordinator, Clinton P. Gridley, at (651) 714-3523 (TDD (651) 714-3568)) to make arrangements.  1 City of Woodbury, Minnesota Office of City Administrator Council Workshop Letter 23-164 July 19, 2023 To: The Honorable Mayor and Members of the City Council From: Clinton P. Gridley, City Administrator Subject: New Cannabis Law Introduction Summary In July 2022, the State of Minnesota enacted legislation related to the legal sale of tetrahydrocannabinol (THC) products. Accordingly, the City adopted a cannabinoid products licensing program and has been licensing cannabinoid products retailers since September 2022. In May 2023, the State of Minnesota approved the legalization of the possession, use, manufacturing, and sale of certain cannabis products within the state. City staff are actively researching the new laws, implications for cities, and effects on the existing legal edible cannabinoid products licensed under the City’s Cannabinoid Products Ordinance. This workshop item is to take the first step of many to implement the new statute. An important part of this process is understanding the following definitions: Hemp – Hemp is a genetic variant of the cannabis plant that has a delta-9 THC concentration of no more than 0.3 percent on a dry weight basis (Minn. Stat. 342.01). The new laws discuss in detail the concept of “lower potency hemp products” and “lower potency hemp edibles” as separate categories of regulated products and businesses. This would typically be the type of lower potency THC products such as edible cannabinoid gummies and seltzers that were approved last year, although under the new law, there is a likelihood of even more new products falling into this category derived from hemp. New state law establishes a low-potency hemp business license program. Cannabinoid - any edible cannabinoid product or nonedible cannabinoid product authorized for sale in the 2022 State Statutes Section 151.72, which generally requires the TCH to be less than 0.5mg per serving and being derived from hemp. Once the new laws are fully in effect in 2025, this category of cannabinoid product will essentially be subsumed within “lower potency hemp products” and the laws passed in 2022 (including Woodbury’s prior licensing ordinance) will be sunsetted by early 2025. Cannabis – Cannabis is a plant that has a delta-9 THC concentration of more than 0.3 percent on a dry weight basis. (Minn. Stat. 342.01). The new laws cover and include all manner of full potency marijuana products, including the plants, leaves, buds, flowers and stems, and various other edible and consumable products derived from cannabis plants. New state law establishes a cannabis business license program and plethora of related regulations. Council Workshop Letter 23-164 July 19, 2023 Page 2 The edible cannabinoid (lower potency hemp) products legalized in 2022 will continue to be sold. Current cannabinoid product retailers are now required to register with the State of Minnesota by October 1, 2023 and will eventually be licensed as low-potency hemp retailers. New cannabis and hemp products will be available for legal sale in January 2025 or once the state begins its licensing program. Even prior to availability of retail sales, adults 21 and older will be able to legally use and possess certain amounts of cannabis in Minnesota effective August 1, 2023. Council can take action related to the retail sales of cannabinoid products, hemp products, and cannabis in Woodbury until 2025. There are many other cannabis and hemp policy matters that will be reviewed at the August 16 workshop and beyond. As for preliminary regulatory matters by the City, staff has identified three options for Council’s immediate deliberation at this time. Recommendation Staff requests Council to choose from the three options below and provide direction to prepare for August 9, 2023 Council action. Option 2 is the recommended approach, recognizing that further deliberation on this new state law will be forthcoming on August 16, 2024, and beyond. Options 1: Least Restrictive Required Action: Repeal the current Cannabinoid Products Ordinance at the August 9, 2023 City Council Meeting. Impact on Current Ordinance: The existing Cannabinoid Products Ordinance would be repealed. City licensing efforts would end and retailers could freely sell products legalized in 2022 under Section 151.72, while also being able to sell other new cannabis products as the Office of Cannabis Management develops new licensing procedures under the new law Chapter 342. Summary: Cities are not required to adopt any new or additional regulations under the new law, and the existing Cannabinoid Products Ordinance enacted in 2022 will be required to be repealed no later than March 2025. Many of the health and safety regulations included in the City’s ordinance are now required by state law, including: a. Edible cannabinoid products, other than beverages, must now all be displayed behind a checkout counter. All non-displayed products must be stored in a secure area. b. No sales to a person who is visibly intoxicated. c. No vending machine sales. d. No samples unless the business is licensed for on-site consumption. Until January 2025, on-site consumption is only allowed at retailers that also hold an on-sale liquor license. e. Retailers must now verify age of purchaser (21+). The City could repeal the Cannabinoid Products Ordinance and all Woodbury-specific eligibility criteria for cannabinoid products would be eliminated, including the existing restriction that no license shall be granted for any business which principal building is within 500 feet of any school, licensed day care center, park, or playground. The State of Council Workshop Letter 23-164 July 19, 2023 Page 3 Minnesota would then solely manage the cannabinoid and hemp business oversight and regulation in the City. Future cannabis business rules and restrictions could be considered over the next year and enacted before January 2025 when the state begins licensing cannabis businesses. 2: Moderately Restrictive Required Action: Adopt an interim ordinance temporarily prohibiting new cannabis businesses in the City at the August 9, 2023 City Council Meeting. Impact on Current Ordinance: This interim period would not affect the continued licensing and sales of legal edible cannabinoid products currently allowed under the City’s existing ordinance. Additional minor revisions of the Cannabinoid Products Ordinance may be considered at the August Workshop to better align with the new state law, including allowing sales at exclusive liquor stores. Summary: Council has the authority to enact an interim ordinance period for the purpose of studying reasonable restrictions on the time, place, and manner of operation of cannabis businesses in Woodbury and would effectively prohibit cannabis businesses, which includes retail, processing, manufacturing, etc. until January 2025. The new state law specifically allows this interim period and would allow the City time to perform additional research of the effects and impacts of this entirely new market, perform community engagement processes as directed by Council, and prevent new cannabis businesses from starting sales prior to the completion of the City’s processes. If Council were interested in this option for the purpose of protecting the planning process and the health, safety, and welfare of the Woodbury community, a public hearing would be held at the August 9, 2023 City Council meeting to consider whether to adopt an interim ordinance to study reasonable restrictions on the time, place, and manner of operation of cannabis businesses in Woodbury. Future cannabis business rules and restrictions could be considered over the next year and enacted before January 2025 when the state begins licensing cannabis businesses. 3: Most Restrictive Required Action: Adopt an interim ordinance temporarily prohibiting cannabis businesses and hemp businesses in the City at the August 9, 2023 City Council Meeting. Amend the Cannabinoid Products Ordinance to limit the number of licenses to four at the August 9, 2023 City Council Meeting. Impact on Current Ordinance: This interim period would not affect the sales of legal edible cannabinoid products by already licensed establishments currently allowed under the City’s existing ordinance. Summary: In addition to enacting an interim ordinance to prohibit all cannabis businesses until January 2025, Council has the authority to prohibit new hemp businesses and to stop issuing new cannabinoid products licenses for one year. These actions together would prevent all new hemp and cannabinoid product businesses from Council Workshop Letter 23-164 July 19, 2023 Page 4 starting a new retail business in Woodbury for one year, and all cannabis businesses from starting until January 2025. If Council were interested in an interim ordinance period for both cannabis businesses and hemp businesses and to stop the issuance of new cannabinoid products licenses, a public hearing would be held at the August 9, 2023 City Council meeting, again to consider whether to adopt an interim ordinance to study reasonable restrictions on the time, place, and manner of operation of cannabis businesses with the addition of hemp businesses in Woodbury. Under this option, at the August 9, 2023 City Council meeting, there would be a public hearing followed by the adoption of interim ordinances for cannabis and hemp businesses and the amendment of the Cannabinoid Products Ordinance. Future cannabis business rules and restrictions could be considered over the next year and enacted before January 2025 when the state begins licensing cannabis businesses. Governance Mode • Generative - identifying key questions, anticipating future challenges, framing of issues, and development of options. Fiscal Implications There will be new revenue for the City from the 10 percent state tax on some cannabis products under the new law, as 20 percent of the gross receipts tax revenue from cannabis products is dedicated to local governments, to be shared equally between cities and counties. The impact of this revenue is still being studied. Policy Minnesota Session Laws – 2023 Chapter 63, Article 1 – Regulation of Adult-Use Cannabis Woodbury City Code Chapter 11 – Licenses, Permits and Miscellaneous Business Regulations, Article XV Cannabinoid Products. Public Process 1. City Council Workshop on August 10, 2022 2. City Council Meeting on August 31, 2022 – Adoption of Cannabinoid Products Ordinance 3. City Council Meeting on November 9, 2022 – Authorization for Memorandums of Understanding for Cannabinoid Products License Applicants Meeting Certain Criteria 4. Regular Licensing Processes Background We continue to learn about the recent cannabis legislation and the state-level regulations that will be implemented by the newly-created State Office of Cannabis Management for the hemp, medical cannabis, and recreational cannabis industries. Communities will have a critical role in the regulation process of cannabis in perpetuity as directed by state law, but are limited in the parameters that can be placed on city-specific regulation, consumption, and enforcement. Council Workshop Letter 23-164 July 19, 2023 Page 5 Specifically, the City will eventually be required to affirm that new state-license applicants are in compliance with local zoning rules, create a new cannabis business and hemp business registration programs, and provide some compliance activities. There will be new revenue for the City from the 10 percent state tax on some cannabis products under the new law, as well as limited business registration fees. Additional items of note include: a. Woodbury’s existing Cannabinoid Products Ordinance must be repealed by March 5, 2025. b. Retailers currently selling legal products under Woodbury’s existing Cannabinoid Products Ordinance must register with the state by October 1, 2023. c. Future cannabis businesses licensed by the state will be required to meet Woodbury zoning and land use laws. d. Cities must allow at least one cannabis retail operation for every 12,500 residents. e. Municipal cannabis retail operations may be allowed. State Requirements of Cities a. Cities may not prohibit the possession, transportation, or use of cannabis flower, cannabis products authorized by the new law. b. Cities are prohibited from imposing a tax solely on the sale of taxable cannabis products. c. Cities must register operating state-licensed cannabis business. Additional city licensure is prohibited once the state begins licensing. d. Cities must perform compliance checks on local cannabis businesses. New Regulations for Edible Cannabinoid Products and Beverages Edible cannabinoid products and THC beverages continue to be allowed and the City of Woodbury’s Cannabinoid Products Ordinance is currently in effect. Many of the health and safety regulations included in the City’s Cannabinoid Products Ordinance in 2022 are now required by state law. Cannabinoid businesses will eventually be encompassed by lower-potency hemp businesses and licensed separately from cannabis businesses, all ultimately regulated by the State of Minnesota. Timeline The state has identified three key upcoming dates for both the cannabis industry and hemp consumer industry: • July 1, 2023. New 10 percent sales tax on cannabis products in effect, including low- potency hemp. • August 1, 2023. The possession, use, and home growth of cannabis becomes legal. • January 2025. Tentative date that state licensing commences, and legal cannabis sales are expected to begin. State Limitations on Cannabis Use (starting August 1, 2023) AND Cannabis Sales (to start January 2025) The State of Minnesota has adopted a number of restrictive provisions to limit the use and sales of cannabis products and address the health and safety of the community. Individuals age 21 and older will be required to purchase products from behind the counter of licensed establishments, use them primarily on private property, and existing Clean Air Act provisions will apply. Council Workshop Letter 23-164 July 19, 2023 Page 6 Future Considerations Additional information is regularly being shared by the State of Minnesota related to this new legislation and its implementation. As we continue to learn more about the state’s regulatory framework and impacts, we anticipate a deeper dive into the new law, effects, and opportunities to specifically address the health and safety of the Woodbury community at the August 16th Council Workshop. There will be a significant number of discretionary decisions that the City Council can choose to consider as allowed by the new state law. This could include limiting the total number of future cannabis business licenses issued by the Office of Cannabis Management, allowing on-site consumption, making public use of cannabis and hemp products a petty misdemeanor, and others. Additional, detailed FAQ-level cannabis law information has been compiled by the League of Minnesota Cities and is attached to this memo. Written By: Annie Coyle, Assistant to the City Administrator/Deputy Clerk Approved Through Kimberlee K. Blaeser, City Clerk Kevin Sandstrom, City Attorney Christina Benson, Assistant City Attorney Attachments: League of MN Cities: Adult-Use Cannabis - What Cities Need to Know Adult-Use Cannabis: What Cities Need to Know Published: June 12, 2023 A new law enacted at the end of the 2023 legislative session legalizes adult–use cannabis in Minnesota and establishes a regulatory framework over the cannabis industry. Since the enactment of the law, the League of Minnesota Cities has been researching and collecting information from state agencies and stakeholders to answer questions pertaining to local regulatory authority, law enforcement, taxing, and employment. Read the full bill The following frequently asked questions (FAQs) aim to provide information to cities about the new law to assist local governments in making decisions related to the law. The League will continually update this information as necessary. Get answers to FAQs regarding the new law on adult-use cannabis General information Q1. What does the new law do? Q2. How much cannabis can a person legally possess? Q3. Are cannabis products legal under federal regulations? Q4. Can a person grow their own cannabis? Q5. Does the Clean Indoor Air Act apply to cannabis products? Q6. What types of licenses will the OCM issue? Q7. Can cannabis start to be sold now? Q8. Under the new law, where can adult-use cannabis be sold? Q9. Could my city’s municipal liquor store sell adult-use cannabis? Q10. Can my city have a municipal cannabis retail store? Q11. Are cannabis products legal under federal regulations? Taxation and revenue Q12. How will these new products be taxed? Q13. Can our city impose its own cannabis tax? Q14. Do sales taxes apply? Q15. Who receives taxes collected from the sale of cannabis products? Q16. What is considered a “taxable cannabis product retailer?” Q17. How much revenue will cities receive from the local government cannabis aid fund? Q18. When will cities receive revenue from the local government cannabis aid account? Enforcement and public safety Q19. How is the new law enforced? Q20. What are penalties for someone selling edible cannabis products that do not meet the state’s requirements? Q21. Can a person still be charged with possession of cannabis products? Q22. Can a person still be charged with sale of cannabis products? Q23. Can a person be charged with a crime for cultivating cannabis? Q24. Can a person be charged with a crime for using cannabis in public? Q25. How do our officers determine if a driver is under the influence of adult-use cannabis? Q26. Is it a crime to use cannabis products while operating a motor vehicle? Q27. Is it a crime to possess cannabis products in a motor vehicle? Q28. Could cities prohibit the sale of adult-use cannabis entirely? Q29. Is our city required to adopt regulations under the new law? Q30. Are prior convictions for cannabis use expunged and what is the city’s role in that process? City regulation Q31. Can the city require sellers to have a city-issued license? Q32. When is our city required to issue retail registration to a cannabis retail business? Q33. Can a retail registration issued by our city be transferred? Q34. Is our city required to conduct compliance checks on businesses with a cannabis retail registration? Q35. Can our city charge a fee for a cannabis retail registration? Q36. Can my city limit the number of cannabis retailer licenses issued in our city? Q37. How does this impact my city’s existing license for THC products? Q38. Which state agency is charged with regulating edible cannabinoid products until the OCM begins licensing cannabis products? Q39. What changes have been made to the edible cannabinoid law adopted in 2022? Q40. Can edible cannabinoid products be sold for on-site consumption? Q41. Will I be able to prohibit cannabis events in my city? Q42. How does this impact my city’s existing THC license program? Q43. How does the new law impact my city’s existing THC moratorium? Q44. Can the city’s zoning regulation restrict where a business can operate? Q45. Can cities adopt a moratorium prohibiting the sale, manufacturing, or distribution of adult-use cannabis to study the issue? Q46: What if my city has complaints about a licensed cannabis business? Q47: Can a city deny a liquor license if they find that the business is selling cannabis or low- potency hemp products without a license? Q48. Can a city suspend or revoke a tobacco license if they find that they are selling cannabis or low-potency hemp products without a license? City employment and personnel issues Q49. Does the new law allowing adult-use cannabis change anything about how we do drug testing for CDL holders? Q50. Does the new law change anything related to employees who carry a firearm? Q51. Besides positions requiring a CDL or carrying a firearm, are there any other positions which are not affected by the new law? Q52. Can we still prohibit employees from being under the influence of cannabis while at work? Does the League have a model policy with updated language? Q53. If an employee is injured while being under the influence of cannabis at work, are they still entitled to workers’ compensation benefits? Q54. Can employees be in possession of edibles or other cannabis products while at work? Q55. Do we need to change anything in our collective bargaining agreement (CBA) regarding discipline of employees who use cannabis products? Q56. Can employees use cannabis products off-duty? Q57. How does this impact the requirements of the Drug-Free Workplace Act? Q58. Should my city continue to include cannabis as a pre-employment panel screen for my non-DOT/safety-sensitive employees? General information Q1. What does the new law do? A1. The new law legalizes the possession, use, manufacturing, and sale of certain cannabis products within the state. It establishes the Office of Cannabis Management (OCM), which is charged with, among other things, enforcing an organized system of regulation for the cannabis industry and the hemp consumer industry. The law also: Establishes labor standards for the use of cannabis and hemp products by employees and testing of employees. Establishes expungement procedures for certain individuals previously convicted of a crime related to cannabis. Possession, use, and home growth under this new law will be legal beginning Aug. 1, 2023, and legal sales are expected to begin in January of 2025. Various other effective dates are noted throughout the FAQ as they apply. Access the Office of Cannabis Management’s website Return to top of page Q2. How much cannabis can a person legally possess? A2. This law allows a person of 21 years of age or older to: Use, possess, or transport cannabis paraphernalia. Possess 2 ounces or less of cannabis flower in a public place. Possess 2 pounds or less of cannabis flower in a person’s residence. Possess or transport 8 grams or less of adult-use cannabis concentrate. Possess or transport edible products infused with a total of 800 milligrams or less of tetrahydrocannabinol. Give away cannabis flower and products in an amount that is legal for a person to possess in public. The law authorizes an individual to use adult-use cannabis flower and adult-use cannabis products: In a private residence including the individual’s curtilage or yard. On private property, unless the owner of the property prohibits the use of the products. On the premises of an establishment or event licensed to permit on-site consumption. Return to top of page Q3. Are cannabis products legal under federal regulations? A3. Marijuana remains a Schedule I drug under federal law, meaning it is illegal, with limited exceptions, to grow, process, sell or possess marijuana from a federal standpoint. Return to top of page Q4. Can a person grow their own cannabis? A4. The law authorizes a person to cultivate up to eight cannabis plants, of which four or fewer may be mature, flowering plants provided that it is in an enclosed, locked space that is not open to public view. Return to top of page Q5. Does the Clean Indoor Air Act apply to cannabis products? A5. A person may not use cannabis flower, cannabis products, or hemp-derived consumer products in a manner that involves the inhalation of smokes, aerosol, or vapor at any location where smoking is prohibited under the Clean Indoor Air Act. Return to top of page Q6. What types of licenses will the OCM issue? A6. The OCM will issue the following types of licenses: Cannabis microbusiness. Cannabis mezzobusiness. Cannabis cultivator. Cannabis manufacturer. Cannabis retailer. Cannabis wholesaler. Cannabis transporter. Cannabis testing facility. Cannabis event organizer. Cannabis delivery service. Lower-potency hemp edible manufacturer. Medical cannabis cultivator. Medical cannabis processor. Medical cannabis retailer. Return to top of page Q7. Can cannabis start to be sold now? A7. Cannabis will not be able to be sold until the Office of Cannabis Management is established and able to issue licenses. Communication from state agencies indicate an intended timeline of January 2025 for when sales will be live to the public. Before beginning sales, a cannabis retailer must obtain a local retail registration. Any business attempting to sell cannabis products before licenses are issued should be reported to the Department of Health. Return to top of page Q8. Under the new law, where can adult-use cannabis be sold? A8. Cannabis products and hemp derived consumer products may only be sold in business with a license issued by the OCM. Return to top of page Q9. Could my city’s municipal liquor store sell adult-use cannabis? A9. The law adds edible cannabinoid products as an item allowed to be sold at exclusive liquor stores, including municipal liquor stores. The ability of cities to sell cannabinoid products at a liquor store is unique to Minnesota and may create new and complex coverage and liability questions around these products. The League and the League of Minnesota Cities Insurance Trust (LMCIT) are working on guidance for cities considering selling cannabinoid products at their municipal liquor stores. This information will be updated when such guidance is drafted. Return to top of page Q10. Can my city have a municipal cannabis retail store? A10. The new law authorizes cities to operate a municipal cannabis retail store. This is a unique opportunity for Minnesota cities and more research is needed to determine the legal ramifications of such an operation. Return to top of page Q11. Are cannabis products legal under federal regulations? A11. Marijuana remains a Schedule I drug under federal law, meaning it is illegal, with limited exceptions, to grow, process, sell or possess marijuana from a federal standpoint. Return to top of page Taxation and revenue Q12. How will these new products be taxed? A12. A tax equal to 10% of gross receipts from retail sales of taxable cannabis products will be imposed on any taxable cannabis product retailer that sells cannabis products to customers. Return to top of page Q13. Can our city impose its own cannabis tax? A13. Cities are prohibited from imposing a tax solely on the sale of taxable cannabis products. Return to top of page Q14. Do sales taxes apply? A14. The state sales tax and local sales taxes apply to cannabis and hemp-derived cannabinoid products. Return to top of page Q15. Who receives taxes collected from the sale of cannabis products? A15. Revenues from the retail sales of cannabis products will be divided, with 80% going to the general fund and 20% to the local government cannabis aid account. Cities will receive 50% of the amount certified to the local government cannabis aid account. Return to top of page Q16. What is considered a “taxable cannabis product retailer?” A16. A taxable cannabis product retailer is a retailer that sells any taxable cannabis products. This includes a cannabis retailer, cannabis microbusiness, cannabis mezzobusiness, and lower- potency hemp edible retailer. Minn. Stat § 295.81, subd. 1(s). Return to top of page Q17. How much revenue will cities receive from the local government cannabis aid fund? A17. Half of the amount certified in the cannabis local government aid fund will go to cities. Cities will receive a distribution proportional to the number of cannabis businesses located in the city as compared to the number of cannabis businesses in all cities. Return to top of page Q18. When will cities receive revenue from the local government cannabis aid account? A18. The gross receipts tax goes is effective for gross receipts received after June 30, 2023. The law requires the Department of Revenue to certify the amount to be paid to each city by Sept. 1, 2024, and every year after, and the full amount must be paid on Dec. 26, 2024, and every year after. Return to top of page Enforcement and public safety Q19. How is the new law enforced? A19. All licensing issues will be enforced by the Office of Cannabis Management. Until the OCM is up and running, the currently legal hemp-derived edible products under Minn. Stat. § 151.72 will be temporarily regulated by the Department of Health, which is taking over the enforcement of edible cannabis products previously done by the Board of Pharmacy. Local law enforcement may still enforce illegal possession or use crimes where applicable. Access the Department of Health’s site on the temporary regulation of lower-potency hemp edibles Return to top of page Q20. What are penalties for someone selling edible cannabis products that do not meet the state’s requirements? A20. If a retailer is found to be selling edible cannabis products that do not meet state requirements, the Department of Health may embargo the products and potentially destroy the products with the retailer paying for all court costs and fees, storage, and other proper expenses. Return to top of page Q21. Can a person still be charged with possession of cannabis products? A21. Beginning Aug. 1, 2023, the following actions are considered cannabis possession crimes: Possession of cannabis in the first degree. (Punishable by imprisonment for not more than five years or payment of a fine of not more than $10,000, or both). More than 2 pounds but not more than 10 kilograms of cannabis flower. More than 160 grams but not more than 2 kilograms of cannabis concentrate. Edible cannabis products, lower-potency hemp edibles, or hemp-derived consumer products infused with more than 16 grams but not more than 200 grams of THC. Possession of cannabis in the second degree. (Punishable by imprisonment for not more than one year or payment of a fine of not more than $3,000, or both). More than 1 pound but not more than 2 pounds of cannabis flower in any place other than the person’s residence. More than 80 grams but not more than 160 grams of cannabis concentrate. Edible cannabis products, lower-potency hemp edibles, or hemp-derived consumer products infused with more than 8 grams but not more than 16 grams of THC. Possession of cannabis in the third degree. (Punishable by imprisonment for not more than 90 days or payment of a fine of not more than $1,000, or both). More than 4 ounces but not more than 1 pound of cannabis flower in any place other than the person’s residence. More than 16 grams but not more than 80 grams of cannabis concentrate. Edible cannabis products, lower-potency hemp edibles, or hemp-derived consumer products infused with more than 1,600 milligrams but not more than 8 grams of THC. Possession of cannabis in the fourth degree. (Punishable as a petty misdemeanor). More than 2 ounces but not more than 4 ounces of cannabis flower in any place other than the person’s residence. More than 8 grams but not more than 16 grams of cannabis concentrate. Edible cannabinoid products infused with more than 800 milligrams but not more than 1,600 milligrams of THC. Return to top of page Q22. Can a person still be charged with sale of cannabis products? A22. Beginning Aug. 1, 2023, the following actions are considered cannabis sale crimes: Sale of cannabis in the first degree. Punishable by imprisonment for not more than five years or to a payment of a fine of not more than $10,000 or both if a person unlawfully sells more than 2 ounces of cannabis flower; more than 8 grams of cannabis concentrate; or edible cannabis products, lower-potency hemp edibles, or hemp-derived consumer products infused with more than 800 milligrams of THC: To a minor and the defendant is more than 36 months older than the minor. Within 10 years of two or more convictions of sale in the second or third degree. Within 10 years of a conviction of first degree Sale of cannabis in the second degree. May be sentenced to imprisonment for not more than one year or to payment of a fine of not more than $3,000, or both if an adult: Unlawfully sells more than 2 ounces of cannabis flower; more than 8 grams of cannabis concentrate; or edible cannabis products, lower-potency hemp edibles, or hemp-derived consumer products infused with more than 800 milligrams of THC: In a school zone, a park zone, or a drug treatment facility; or Within 10 years of a conviction of sale of cannabis in the first, second, or third degree. Unlawfully sells cannabis flower, cannabis concentrate, edible cannabis products, lower- potency hemp edibles, or hemp-derived consumer products to a minor. Sale of cannabis in the third degree. An adult may be sentenced to imprisonment for not more than 90 days or to payment of a fine of not more than $1,000, or both, if the adult unlawfully sells: More than 2 ounces of cannabis flower. More than 8 grams of cannabis concentrate. Edible cannabis products, lower-potency hemp edibles, or hemp-derived consumer products infused with more than 800 milligrams of THC. Sale of cannabis in the fourth degree. An adult is guilty of a petty misdemeanor if they unlawfully sell: Not more than 2 ounces of cannabis flower. Not more than 8 grams of cannabis concentrate. Edible cannabis products, lower-potency hemp edibles, or hemp-derived consumer products infused with not more than 800 milligrams of THC. A sale for no remuneration by an individual over the age of 21 to another individual over the age of 21 is not unlawful as cannabis sale in the fourth degree. Sale of cannabis by a minor. A minor is guilty of a petty misdemeanor if the minor unlawfully sells: Not more than 2 ounces of cannabis flower. Not more than 8 grams of cannabis concentrate. Edible cannabis products, lower-potency hemp edibles, or hemp-derived consumer products infused with not more than 800 milligrams of THC. A minor is guilty of a misdemeanor if the minor unlawfully sells: More than 2 ounces of cannabis flower. More than 8 grams of cannabis concentrate.  Edible cannabis products, lower-potency hemp edibles, or hemp-derived consumer products infused with more than 800 milligrams of THC. Return to top of page Q23. Can a person be charged with a crime for cultivating cannabis? A23. Beginning Aug. 1, 2023, the following are crimes related to the cultivation of cannabis. Cultivation of cannabis in the first degree. A person is guilty of cultivation of cannabis in the first degree and may be sentenced to imprisonment for not more than five years or to payment of a fine of not more than $10,000, or both, if the person unlawfully cultivates more than 23 cannabis plants. Cultivation of cannabis in the second degree. A person is guilty of cultivation of cannabis in the second degree and may be sentenced to imprisonment for not more than one year or to payment of a fine of not more than $3,000, or both, if the person unlawfully cultivates more than 16 cannabis plants but not more than 23 cannabis plants. Return to top of page Q24. Can a person be charged with a crime for using cannabis in public? A24. Beginning Aug. 1, 2023, a city may adopt an ordinance establishing a petty misdemeanor offense for a person who unlawfully uses cannabis flower, cannabis products, lower-potency hemp edibles, or hemp-derived consumer products in a public place other than the following. A private residence including the person’s curtilage or yard. Private property not generally accessible by the public, unless the person is explicitly prohibited from consuming cannabis flower, cannabis products, lower-potency hemp edibles, or hemp-derived consumer products on the property by the owner of the property. The premises of an establishment or event licensed to permit on-site consumption. Return to top of page Q25. How do our officers determine if a driver is under the influence of adult-use cannabis? A25. Officers will need to use the same process for determining if a person is under the influence of cannabis while operating a vehicle as they would have prior to the new law being enacted. Return to top of page Q26. Is it a crime to use cannabis products while operating a motor vehicle? A26. It is a misdemeanor for a person to use cannabis flower, a cannabis product, a lower- potency hemp edible, a hemp-derived consumer product, or any other product containing an artificially derived cannabinoid in a motor vehicle when the vehicle is on a street or highway. Return to top of page Q27. Is it a crime to possess cannabis products in a motor vehicle? A27. Beginning Aug. 1, 2023, a person may be charged with a misdemeanor if they possess cannabis products in a motor vehicle on a street or highway if the products meet any of the following conditions: Do not meet the packaging requirements set in statute. Have been removed from the packaging in which they were sold. Are in packaging that has been opened, or the seal has been broken. Are in packaging in which the contents have been partially removed. It is not considered a crime if the cannabis products are in the trunk of the vehicle or in another area of the vehicle not normally occupied by the driver and passengers if the vehicle is not equipped with a trunk. A utility compartment or glove compartment is deemed to be within the area occupied by the driver and passengers. Return to top of page Q28. Could cities prohibit the sale of adult-use cannabis entirely? A28. Cities may not prohibit the possession, transportation, or use of cannabis flower, cannabis products, lower-potency hemp edibles, or hemp-derived consumer products authorized by the new law. Return to top of page Q29. Is our city required to adopt regulations under the new law? A29. Cities are not required to adopt any new regulations under the new law. However, they will be required to register retail sellers and perform compliance checks. Return to top of page Q30. Are prior convictions for cannabis use expunged and what is the city’s role in that process? A30. Certain cannabis-related convictions will be expunged by the Bureau of Criminal Apprehension. Upon receipt of a notice of expungement, cities are required to seal all records related to the expungement, including the records of the person’s arrest, indictment, trial verdict, and dismissal or discharge of the case. Certain felony convictions will be reviewed by the Cannabis Expungement Board to determine what, if any, action should be taken related to a prior conviction. Cities will be required to provide the Cannabis Expungement Board free access to records held by law enforcement agencies or prosecuting authorities. Return to top of page City regulation Q31. Can the city require sellers to have a city-issued license? A31. A city may not require additional licenses other than the cannabis licenses issued by the OCM. However, the OCM will forward applications to cities for them to certify whether the proposed cannabis business complies with local zoning ordinance and, if applicable whether the proposed business complies with the state fire and building code. The OCM may not issue a license to a cannabis business that does not meet local zoning and land use laws. In addition, upon receipt of an application for a cannabis license, the OCM will contact the city in which the business would be located and provide the city with 30 days in which to provide input on the application. This is the city’s opportunity to provide the OCM with any additional information it believes is relevant to the OCM’s decision on whether to issue a license, including but not limited to identifying concerns about the proposed location of a cannabis business, or sharing public information about the applicant. Before a cannabis business begins making retails sales, it will be required to register with the city in which it is located. Return to top of page Q32. When is our city required to issue retail registration to a cannabis retail business? A32. A city is required to issue a retail registration to a cannabis microbusiness with a retail operations endorsement, cannabis mezzobusiness with a retail operations endorsement, cannabis retailer, medical cannabis retailer, or lower-potency hemp edible retailer that: Has a valid license issued by the OCM. Has paid the registration fee. Is found to be in compliance with the requirements of the applicable state laws through a preliminary compliance check performed by the city. Is current on all property taxes and assessments at the location where the retail establishment is located. Return to top of page Q33. Can a retail registration issued by our city be transferred? A33. Retail registration may not be transferred. Return to top of page Q34. Is our city required to conduct compliance checks on businesses with a cannabis retail registration? A34. Cities will be required to conduct compliance checks on retail cannabis businesses with a retail registration by the city. The OCM will develop standardized forms and procedures for these compliance checks. Return to top of page Q35. Can our city charge a fee for a cannabis retail registration? A35. city may impose an initial retail fee of $500 or up to half the amount of the applicable initial license fee charged by the OCM, whichever is less. The city may also charge a renewal retail registration fee of $1,000 or up to half the amount of the applicable renewal license fee charged by the OCM, whichever is less. Return to top of page Q36. Can my city limit the number of cannabis retailer licenses issued in our city? A36. A city that issues cannabis retailer registrations may, by ordinance, limit the number of licensed cannabis retailers, cannabis mezzobusinesses with a retail operations endorsement, and cannabis microbusinesses with a retail operations endorsement to no fewer than one registration for every 12,500 residents. In addition, if a county has one active registration for every 12,500 residents, a city within the county is not obligated to register any additional cannabis businesses. Return to top of page Q37. How does this impact my city’s existing license for THC products? A37. It appears that cities may continue to license edible cannabinoid products until the OCM begins issuing licenses. Those businesses that sell edible cannabinoid products to consumers must register with the Minnesota Department of Health by Oct. 1, 2023. However, once the OCM begins issuing lower-potency hemp edible retailer licenses, cities are likely preempted from continuing to issue their own licenses and would begin registering retailers through the city’s cannabis retailer registration process. Return to top of page Q38. Which state agency is charged with regulating edible cannabinoid products until the OCM begins licensing cannabis products? A38. The Minnesota Department of Health is now charged with the regulations of edible cannabinoid products until the OCM begins issuing licenses. Learn more on the Minnesota Department of Health website. Return to top of page Q39. What changes have been made to the edible cannabinoid law adopted in 2022? A39. The new law allows for the continued sale of certain edible cannabinoid products with new limitations including: Manufacturers must have each batch of products tested to certify they comply with the standards adopted by the Minnesota Department of Health. Manufacturers must disclose information regarding foreign materials applied or added to the products. Labels must contain a batch number. Beverages cannot contain more than two servings per container. Edible cannabinoid products may not contain artificially derived or synthetic cannabinoids. Edible cannabinoid products, other than beverages, must be displayed behind a checkout counter. Retailers must verify age of purchaser. Return to top of page Q40. Can edible cannabinoid products be sold for on-site consumption? A40. Until the OCM begins issuing licenses, the on-site consumption of edible cannabinoid products is limited to those businesses with an on-sale liquor license issued under Minnesota Statutes, Chapter 340A. In addition, the following conditions must be met: Products must be served in original. Products may not be sold to an intoxicated customer. Products must not be permitted to be mixed with alcoholic beverages. Products removed from packaging must remain on premises. After the OCM is set up, it will issue on-site consumption endorsements for cannabis license holders. Return to top of page Q41. Will I be able to prohibit cannabis events in my city? A41. The new law authorizes temporary cannabis events lasting no more than four days. To be approved for a cannabis event license, applicants must obtain any necessary permits or licenses issued by a local unit of government. Cities may not prohibit cannabis events, but they may set standards which the event organizer must meet. Cities may also permit on-site consumption for events but are not required to. Return to top of page Q42. How does this impact my city’s existing THC license program? A42. Local THC licenses may continue until the OCM begins issuing its own licenses, which state agencies anticipate beginning in January of 2025. When the OCM licensing begins, cities will need to follow the retail registration procedures outlined in the law. Return to top of page Q43. How does the new law impact my city’s existing THC moratorium? A43. The new law does not affect a current moratorium. If a city adopted a moratorium on low- potency edibles, it remains in place and will expire as noted when it was adopted. Return to top of page Q44. Can the city’s zoning regulation restrict where a business can operate? A44. Cities are allowed to adopt reasonable restrictions on the time, place, and manner of the operations of a cannabis business provided that such restrictions do not prohibit the establishment or operation of cannabis businesses. Cities may prohibit the operations 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. The OCM will develop model ordinances for reasonable restrictions on the time, place, and manner of a cannabis business. Return to top of page Q45. Can cities adopt a moratorium prohibiting the sale, manufacturing, or distribution of adult-use cannabis to study the issue? A45. Cities may adopt an interim ordinance if: It is conducting studies. Has authorized a study to be conducted. Has held or has scheduled a hearing for the purpose of considering adoption or amendment of reasonable restriction on the time, place, and manner of the operation of a cannabis business as defined in the new law. Before adopting an interim ordinance, the city must hold a public hearing on the issue. The interim ordinance may be in place until Jan. 1, 2025. The authority for an extended moratorium does not apply to the sale or production of low-potency hemp edible products. Return to top of page Q46: What if my city has complaints about a licensed cannabis business? A46. The OCM will establish an expedited complaint process to receive, review, and respond to complaints made by cities about a cannabis business. The OCM will be required to respond to the complaint within seven days and perform any necessary inspections within 30 days. If certain cannabis businesses are deemed by the city to pose an immediate threat to the health or safety of the public, the OCM must respond within one business day. Return to top of page Q47: Can a city deny a liquor license if they find that the business is selling cannabis or low-potency hemp products without a license? A47. Yes. The new law prohibits a retail license from being issued to a person who has had a license or registration issued under ch. 342 or Minn. Stat. § 151.72, subd. 5b revoked; has been convicted of an offense under Minn. Stat. § 151.72, subd. 7; or has been convicted under any other statute for the illegal sale of marijuana, cannabis flower, cannabis products, lower- potency hemp edibles, hemp-derived consumer products, or edible cannabinoid products and the sale took place on the premises of a business that sells intoxicating liquor or 3.2% malt liquor. Return to top of page Q48. Can a city suspend or revoke a tobacco license if they find that they are selling cannabis or low-potency hemp products without a license? A48. Yes. The new law allows a tobacco license to be suspended or revoked if the licensee has a registration or licensed under ch. 342 or Minn. Stat. § 151.72, subd. 5b revoked; is convicted of an offense under Minn. Stat. § 151.72, subd. 7; or has been convicted under any other statute for the illegal sale of marijuana, cannabis flower, cannabis products, lower-potency hemp edibles, hemp-derived consumer products, or edible cannabinoid products and the sale took place on the premises of a business that sells tobacco. A city must provide notice and an opportunity for a hearing before suspension or revocation. Return to top of page City employment and personnel issues Q49. Does the new law allowing adult-use cannabis change anything about how we do drug testing for CDL holders? A49. No, cities with positions requiring an employee to hold a commercial driver’s license (CDL) will recall these positions are regulated by federal law, and those regulations are supervised by the Federal Department of Transportation (DOT). Federal law preempts state law related to cannabinoid use; in fact, the DOT states in its DOT Recreational Marijuana Notice that it does not authorize the use of Schedule I drugs, including marijuana, for any reason. As a result, cities should continue to follow their drug-testing procedures related to CDL holders and may enforce prohibitions against any use of cannabinoids for CDL holders, regardless of state law protections. Cities can find more information on existing drug testing policies in the LMC Drug and Alcohol Testing Toolkit, starting on page 22. An updated model Non-DOT Drug, Alcohol and Cannabis Policies will be available once legal consultants have reviewed. Return to top of page Q50. Does the new law change anything related to employees who carry a firearm? A50. No. Public safety employees who carry a firearm cannot lawfully use marijuana under federal law. Federal law prohibits cities from providing firearms or ammunition to an employee it knows or has reason to think is using marijuana. Although there is a legal difference between marijuana products and hemp products, it may not be possible to differentiate the products in a drug test. Officers should be mindful of any substance they ingest because they are ultimately responsible if those products lead to a positive marijuana test. Return to top of page Q51. Besides positions requiring a CDL or carrying a firearm, are there any other positions which are not affected by the new law? A51. Yes. The law excludes the following seven position classes from the law’s changes: 1. A safety-sensitive position, as defined in as defined in Minn. Stat. § 181.950, subd. 13. 2. A peace officer position, as defined in Minn. Stat. § 626.84, subd. 1. 3. A firefighter position, as defined in Minn. Stat. § 299N.01, subd. 3. 4. A position requiring face-to-face care, training, education, supervision, counseling, consultation, or medical assistance to: 1. Children. 2. Vulnerable adults, as defined in Minn. Stat. § 626.5572, subd. 21.  3. Patients who receive health care services from a provider for the treatment, examination, or emergency care of a medical, psychiatric, or mental condition. 5. A position funded by a federal grant. 6. Any other position for which state or federal law requires testing of a job applicant or employee for cannabis. 7. A position requiring a commercial driver’s license or requiring an employee to operate a motor vehicle for which state or federal law requires drug or alcohol testing of a job applicant or employee. Return to top of page Q52. Can we still prohibit employees from being under the influence of cannabis while at work? Does the League have a model policy with updated language? A52. Yes, employers can continue to prohibit employees from being under the influence of cannabis products, while at work. For employers, a key focus will be workplace safety with the consideration that cannabis is more difficult to detect and test than alcohol. Employers may continue to maintain drug-free policies at the workplace and discipline employees who use cannabis during working hours or who report to work impaired. Under the Occupational Safety and Health Administration’s (OSHA) General Duty Clause of the Occupational Safety and Health Act, employers are required to furnish a workplace free from recognized hazards that are likely to cause serious physical harm. This provision of the Act is typically used in accident cases where toxicology screens are positive. OSHA’s new electronic recordkeeping rule, clarified on Oct. 11, 2018, states “If the employer chooses to use drug testing to investigate the incident, the employer should test all employees whose conduct could have contributed to the incident, not just employees who reported injuries,” with respect to using drug testing to evaluate the root cause of a workplace incident that harmed or could have harmed employees. Thus, a non-DOT drug and cannabis-city testing policy with protocols following this guidance is important. Under the new law, employers can enact and enforce work policies prohibiting the use, possession, and impairment of cannabis while at work or operating employer vehicles, equipment, and machinery. It is difficult to test for cannabis to determine if an employee is currently under the influence due to the drug’s ability to be detectable for weeks after it is used. With the prohibitions on disciplining employees other than those listed in Q3, employers will be in a difficult position to take action against an employee who tests positive for cannabis. A best practice is for cities to train supervisors about the behavioral signs and symptoms of drug and cannabis use as well as how to document observations of potential impairment so should a situation occur in the workplace, supervisors can effectively respond and document what they observed leading to the situation. An updated model Non-DOT Drug, Alcohol and Cannabis Policies will be available once legal consultants have reviewed. Return to top of page Q53. If an employee is injured while being under the influence of cannabis at work, are they still entitled to workers’ compensation benefits? A53. While each case is very fact-specific, the general rule is that if the injury was intentionally self-inflicted or the intoxication of the employee is the proximate cause of the injury, then the employer is not liable for compensation. The burden of proof of these facts is upon the employer. Return to top of page Q54. Can employees be in possession of edibles or other cannabis products while at work? A54. Cities may enact policies prohibiting employees from bringing cannabis products, including edibles, to work. A best practice is for cities to train supervisors about the behavioral signs and symptoms of drug and cannabis use as well as documenting observations of potential impairment so should a situation occur in the workplace, supervisors can effectively respond and document what they observed leading to the situation. Return to top of page Q55. Do we need to change anything in our collective bargaining agreement (CBA) regarding discipline of employees who use cannabis products? A55. Maybe. If cities have policies within their CBAs that relate to cannabis use and discipline, cities should consult with their city attorney to determine if any changes are needed. CBAs may address cannabis and cannabis testing, but the CBAs must at least meet the minimum employee rights guaranteed by the statute. Ensure your city’s drug and cannabis-testing policies have been updated and your supervisors are trained on the behavioral signs and symptoms associated with impairment as well as documenting observations of potential impairment. If the CBA includes language that policy changes need to be negotiated, then there would need to be a meeting with the union if the city’s policy changes. Return to top of page Q56. Can employees use cannabis products off-duty? A56. It depends. See Q1, Q2, and Q3 for a list of employees who can be prohibited from using cannabis products both on and off duty due to federal or state regulations. Other employees would be able to use cannabis products while they are off duty, if they are not impaired at work. If there are any questions regarding whether an employee could be prevented from using cannabis products while off-duty, please consult your city attorney before any action is taken. In addition, the law prohibits an employer from taking adverse employment action against an employee who is a patient in the state’s medical cannabis program unless a failure to do so would violate federal or state law or regulations, or cause an employer to lose a monetary or incensing-related benefit under federal law or regulations. Return to top of page Q57. How does this impact the requirements of the Drug-Free Workplace Act? A57. It does not. The Drug-Free Workplace Act of 1988 (DFWA) requires federal grantees and contractors to implement a drug-free workplace policy and establish a drug-free awareness program as a precondition for receiving a federal grant or a contract. However, the DFWA does not require covered employers to test employees for drugs or terminate them for drug-related violations, so the new Minnesota state law does not impact the DFWA directly. Minnesota law allows employers to prohibit employees from bringing legal cannabis products to work and permits employers to prohibit employees from being under the influence while at work. It would be best practice for cities with drug-free work policies to keep those in effect. If a city wishes to do so, it can update its policy to include lawful cannabis products within its scope. An updated model Non-DOT Drug, Alcohol and Cannabis Policies will be available once legal consultants have reviewed. Return to top of page Q58. Should my city continue to include cannabis as a pre- employment panel screen for my non-DOT/safety-sensitive employees? A58. The new Minnesota law prohibits an employer from refusing to hire an applicant simply because of a positive cannabis drug test. There are exceptions for positions where such testing and denial of job offer is required under applicable federal or state law. Cities will want to refer to the Q3, which provides a list of positions excepted from cannabis testing prohibitions. Practically speaking, if a position is not excepted, cities will need to determine whether they want to continue to test for cannabis in light of the limitation of the testing and confer with their city attorney before taking an action as a result of a positive test. Return to top of page Your LMC Resource Research & Information Service staff members are ready to help you apply their broad knowledge to the issues you’re dealing with today. Access online form to submit a question, or call us: (651) 281-1200 or (800) 925-1122