City Council - Workshop Meetings

City Council Workshop Meeting Cherry Conference Room August 14, 2024 | 5:30 PM This City Council Workshop meeting is taking place virtually and at Woodbury City Hall in the Cherry 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 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. 5:00 p.m. Dinner – Cherry Conference Room The intent of the workshop session is to provide a forum for City Council and City staff to discuss more in-depth Council items, exchanging viewpoints and visions prior to the item being set for Council action at a regular meeting of the City Council. Workshop sessions are neither a public hearing nor an open microphone session. No formal votes will be taken and any direction from Council will be in consensus format. The workshop session is not recorded, and no official minutes of the workshop session shall be prepared. Workshop Agenda 1. Workshop Discussion Items - 5:30 p.m. 1A. Cannabis Update 24-200 2. Administrator Comments and Updates* - 7:00 p.m. 3. Mayor and City Council Comments and Commission Liaison Updates* - 7:05 p.m. 4. Adjournment - 7:15 p.m.  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 714- 3568) to make arrangements.  1A City of Woodbury, Minnesota Office of City Administrator Council Workshop Letter 24-200 August 14, 2024 To: The Honorable Mayor and Members of the City Council From: Clinton P. Gridley, City Administrator Subject: Cannabis Update 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 retailers of cannabinoid products since September 2022. At the end of the 2023 legislative session, the State legalized adult-use cannabis in Minnesota. The law identified cannabis cannot be sold until the Office of Cannabis Management (OCM) was established and able to issue licenses. That timeline is expected to be January 2025. Municipalities were given the ability to put in place interim ordinances (moratoriums) and the City of Woodbury adopted an interim ordinances to allow time for the city to adopt appropriate zoning and other ordinances. A model ordinance regarding cannabis was developed by OCM and released in June. Following receipt of additional input from Council, staff will prepare ordinance amendments over the next few months for future review by Council. Recommendation Staff is recommending the following specific actions related to drafting ordinances on future regulation of cannabis and hemp within Woodbury. Cannabis Businesses: 1. Create a registration of cannabis retailers, cannabis mezzobusinesses and cannabis microbusinesses. 2. Limit the number of licensed cannabis retailers, cannabis mezzobusinesses and cannabis microbusinesses to no more than seven (7) licenses which meets the no fewer than one registration for every 12,500 residents state law requirement. 3. Require cannabis businesses (cannabis retailers, cannabis mezzobusinesses, cannabis microbusinesses, etc.) to be located at least 500 feet away from principal school building, principal day care building, principal residential treatment facility building, and attractions in parks (like playgrounds and baseball fields). Council Workshop Letter 24-200 August 14, 2024 Page 2 4. Regulate hours of operation, signage, and other best practices in Zoning Ordinance performance standards. Hemp Businesses: 1. Create a registration of lower-potency hemp edible retailers. 2. Restrict lower-potency hemp edible sales in Zoning Ordinances to o off-sale liquor stores, o on-sale liquor establishments, and o businesses with existing cannabinoid licenses issued by the City under previous ordinances. 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 state tax on some cannabis products. Under the new law, cannabis products will have a 10 percent state tax; 20 percent of the ten percent gross receipts tax revenue from cannabis products is dedicated to local governments, to be shared equally between cities and counties. Policy Numerous Minnesota Statutes including Minnesota Session Laws – 2023 Chapter 63, Article 1 – Regulation of Adult-Use Cannabis and 2024 Chapter 121, Article 2 – Cannabis Policy. Woodbury City Code Chapter 11 – Licenses, Permits and Miscellaneous Business Regulations, Article XV Cannabinoid Products. Public Process  August 10, 2022 - City Council Workshop  August 31, 2022 - City Council Meeting on Adoption of Cannabinoid Products Ordinance  November 9, 2022 - City Council Meeting Authorization for Memorandums of Understanding for Cannabinoid Products License Applicants Meeting Certain Criteria  July 19, 2023 - City Council Workshop  August 9, 2023 - City Council Public Hearing  July 24, 2024- City Council Public Hearing Background The City has the ability to decide in which zoning districts cannabis and hemp businesses will be allowed to operate. Many cities are likely to view both uses similar to liquor stores from a zoning perspective. Woodbury’s Zoning Ordinance identifies liquor stores under the broad definition of retail, and staff recommends Council take a more restrictive approach with cannabis and hemp businesses by defining the uses within the Zoning Ordinance and Council Workshop Letter 24-200 August 14, 2024 Page 3 establishing allowed zoning districts and appropriate performance standards via future Zoning Ordinance revisions. Furthermore, the direction above would establish a minimum 500-foot buffer for cannabis uses from school buildings consistent with current alcohol licensing requirements and a 500-foot buffer from day care buildings, residential treatment facilities, and attractions in parks (like playgrounds and baseball fields). If Council wishes to be less restrictive, they could treat cannabis uses like hemp uses and current alcohol licensing requirements which only buffer from school buildings. During the workshop presentation, additional information will be presented regarding temporary event standards, compliance checks, community engagement and an updated timeline of next steps. For additional technical information related to cannabis and hemp please see the attached memo from Eckberg Lammers. Written By: Christina Benson, Assistant City Attorney Eric Searles, Assistant Community Development Director/City Planner Approved Through Kimberlee K. Blaeser, City Clerk Attachments: August 2, 2024, Eckberg Lammers Memo  ECKBERG LAMMERS MEMO To: City of Woodbury City Council From: Christina Benson, Assistant City Attorney Date: August 2, 2024 Re: Cannabis and Hemp Business Regulation The Minnesota Legislature added Minnesota Statute Chapter 342 Cannabis in 2023 and amended it in 2024. Of the 110 pages of new law, only about 3 pages provide options for local government regulation and most of the 3 pages restrict the options for local government regulation (see attached). On July 31, 2024, the Office of Cannabis Management published the first draft of proposed rules for Minnesota’s cannabis industry. The purpose of this memo is to provide the Woodbury City Council additional regulatory background related to cannabis businesses and hemp businesses in the City of Woodbury. Minnesota Statutes define cannabis business and hemp businesses. Cannabis Business means any of the following licensed under this chapter: (1) cannabis microbusiness; (2) cannabis mezzobusiness; (3) cannabis cultivator; (4) cannabis manufacturer; (5) cannabis retailer; (6) cannabis wholesaler; (7) cannabis transporter; (8) cannabis testing facility; (9) cannabis event organizer; (10) cannabis delivery service; and (11) medical cannabis combination business. Hemp Business means either of the following licensed under this chapter: (1) lower-potency hemp edible manufacturer; or (2) lower-potency hemp edible retailer. Hemp business does not include a person or entity licensed under chapter 18K to grow industrial hemp for commercial or research purposes or to process industrial hemp for commercial purposes. While regulations for the cannabis retailer, manufacturer, wholesaler, transporter, testing facility, and delivery service operations are tailored to the new cannabis and hemp industries, the uses are similar to existing retail, manufacturing, wholesale, transport, test, and delivery operations. Cannabis microbusiness, mezzobusiness, cultivator, and event organizer uses are not. These uses and operations are provided in Minnesota Statute Chapter 342 and will be provided in the new rules: Business Type Activities Size/Outdoor Regulations Microbusiness  grow cannabis plants and harvest  A cannabis microbusiness that  make concentrate cultivates cannabis at an indoor  manufacture artificially derived cannabinoids; facility may cultivate up to  manufacture adult-use cannabis products, 5,000 square feet of plant lower-potency hemp edibles, and hemp-derived canopy. consumer products for public consumption;  A cannabis microbusiness that  package and label adult-use cannabis flower, cultivates cannabis at an adult-use cannabis products, lower-potency outdoor location may cultivate  hemp edibles, and hemp-derived consumer up to one-half acre of mature, products for sale to customers; flowering plants unless the  sell immature cannabis plants and seedlings, office increases that limit. The adult-use cannabis flower, adult-use cannabis office may increase the limit to products, lower-potency hemp edibles, hemp- no more than one acre. derived consumer products, and other products  A cannabis microbusiness with authorized by law to other cannabis businesses the appropriate endorsement and to customers; may operate one retail  operate an establishment that permits on-site location. consumption of edible cannabis products and lower-potency hemp edibles; and  perform other actions approved by the office. Mezzobusiness  grow cannabis plants and harvest  A cannabis mezzobusiness that  make concentrate cultivates cannabis at an indoor  manufacture artificially derived cannabinoids; facility may cultivate up to  manufacture adult-use cannabis products, 15,000 square feet of plant lower-potency hemp edibles, and hemp-derived canopy. The office may adjust consumer products for public consumption; plant canopy limits upward.  process medical cannabinoid products;  A cannabis mezzobusiness that  package and label adult-use cannabis flower, cultivates cannabis at an adult-use cannabis products, lower-potency outdoor location may cultivate hemp edibles, and hemp-derived consumer up to one acre of mature, products for sale to customers; flowering plants unless the  sell immature cannabis plants and seedlings, office increases that limit. The adult-use cannabis flower, adult-use cannabis office may increase the limit to products, lower-potency hemp edibles, hemp- no more than three acres. derived consumer products, and other products  A cannabis mezzobusiness with authorized by law to other cannabis businesses the appropriate endorsement and to customers; and may operate up to three retail  perform other actions approved by the office. locations. Cultivator  grow cannabis plants and harvest cannabis  A cannabis cultivator that flower from a mature plant, cultivates cannabis at an indoor  package and label immature cannabis plants facility may cultivate up to and seedlings and cannabis flower for sale 30,000 square feet of plant  transport cannabis flower to a cannabis canopy. The office may adjust manufacturer located on the same premises; plant canopy limits upward. and  A cannabis cultivator that  perform other actions approved by the office. cultivates cannabis at an outdoor location may cultivate up to two acres of mature, flowering plants unless the office increases that limit. The office may increase the limit to no more than four acres. Event  organize a temporary cannabis event lasting no  Items sold in a secured area Organizer more than four days; and  Limited access consumption  perform other actions approved by the office. area with commercial grade fencing 2 A microbusiness appears alike to a microbrewery; a mezzobusiness alike to a microbrewery; and a cultivator a commercial nursery. The proposed rules provide regulations on various internal controls and security requirements for all cannabis businesses, including cannabis retailers. Among the various security protocols, two have exterior implications. A cannabis business must provide a security alarm system with an audible alarm capable of being heard within a 100-foot radius from entrances and exists of the premises and lighting allowing observers to see activity within a radius of at least 20 feet around all entrances and exits. These are not security requirements for hemp businesses. Cities are limited in their ability to regulate cannabis businesses and hemp businesses. CITIES STATE Registration Waste Disposal Zoning Record Keeping Distance from: Licensing - Schools - Eligibility - Day cares - Renewal - Residential treatment facilities - Revocation/Suspension - Playgrounds/baseball fields in Operations parks Testing Hours of Operation Security Permitted/Conditional Uses in Districts Performance Standards At a later date, city staff will provide recommendations on Cannabis microbusiness; Cannabis mezzobusiness; Cannabis cultivator; Cannabis manufacturer; Cannabis wholesaler; Cannabis transporter; Cannabis testing facility; Cannabis event organizer; Cannabis delivery service; Medical cannabis combination business; and Hemp manufacturer zoning regulations. Cities have the authority to adopt a registration ordinance requiring a cannabis microbusiness, cannabis mezzobusiness, cannabis retailer, medical cannabis combination business, or lower-potency hemp edible retailer with a license from OCM to initially and annually register with the city. To obtain a registration from the city, the ordinance may require: payment of a fee (half of the license fee established by 342.11 up to $500 initially and $1000 annually), compliance with the requirements of Minn. Stat. Ch. 342, and current on all property taxes and assessments. If a city adopts a registration ordinance, the city may limit the number of licensed cannabis retailers, cannabis mezzobusinesses and cannabis microbusinesses to no fewer than one registration for every 12,500 residents. This is based on the Minnesota State Demographer numbers. Woodbury may limit the number of licensed cannabis retailers, cannabis mezzobusinesses and cannabis microbusinesses to 7 or more licenses. City staff recommends adopting a registration ordinance. Prior to year end, city staff will provide recommendations on Cannabis microbusiness; Cannabis mezzobusiness; Cannabis cultivator; Cannabis manufacturer; Cannabis wholesaler; Cannabis transporter; Cannabis testing facility; Cannabis event organizer; Cannabis delivery service; Medical cannabis combination business; and Hemp manufacturer zoning regulations. 3