05-08-2024 Workshop Packet - Laserfiche WebLink

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STAFF REPORT TO:Mayor Fischer and Members of the City Council FROM:Heidi Heller, City Clerk/HR Manager DATE:May 8, 2024 RE:Preliminary Discussion About Potential Regulations and Licensing/Registration for THC and Cannabinoid Products ACTION TO BE CONSIDERED Discussion only. BACKGROUND In 2018, hemp and products of hemp were legalized in Minnesota. This was the beginning of many stores selling cannabidiol, or CBD, products. CBD is derived directly from the hemp plant, a cousin of marijuana, or manufactured in a laboratory. CBD does not contain THC and does not cause a high by itself. On July 1, 2022, Minnesota legalized edibles and beverages containing small amounts of hemp- derived THC. Delta-9-tetrahydrocannabinol (THC) is the main psychoactive molecule in the cannabis plant. In August 2023, Minnesota legalized cannabis, with the anticipated date of January 2025 for retail sales and manufacturing to begin. When hemp was legalized, since there is no “high” from hemp or CBD, there was little concern from cities and no real reason to put any restrictions or licensing rules in place. Now that THC is legal and is a product that gives a “high”, many cities consider THC to be in the same category as tobacco and liquor, and are requiring licensing and regulations for stores that sell THC products. The State of Minnesota requires that businesses that sell hemp-derived cannabinoid products directly to consumers must register with the Minnesota Department of Health. There are currently four businesses in Little Canada registered, but there could be others that have not registered. Little Canada currently has a moratorium in effect until January 1, 2025 that does not allow any business to open or locate here in preparation to be a cannabis business. Council will need to decide before the end of this year how they want to deal with cannabis businesses. Staff is requesting that Council begin the discussion on potential licensing/registration and requirements for THC and cannabis businesses in order to give staff direction on potential city code amendment language. Staff has received several calls from businesses wanting to locate a new THC business here, or looking to lease or buy a building in preparation for the cannabis sales to begin. The Minnesota Legislature is still in session and there are several anticipated changes to the cannabis laws this year, so cities have to wait for those to be decided on and for the new MN Office of Cannabis Management to establish their processes and rules before drafting ordinances for cannabis. I n a n e f f o r t t o a v o i d t h e p a t c h w o r k c i t y r e g u l a t i o n s t h a t a r o s e u n d e r t h e 2 0 2 2 l o w - d o s e h e m p - d e r i v e d T H C e d i b l e p r o d u c t s l a w , t h e c a n n a b i s l a w s p e c i f i e s w h a t l o c a l g o v e r n m e n t s m a y r e g u l a t e . A l o c a l g o v e r n m e n t m a y a d o p t r e a s o n a b l e r e s t r i c t i o n s o n t h e t i m e , p l a c e a n d m a n n e r o f t h e o p e r a t i o n o f a c a n n a b i s b u s i n e s s p r o v i d e d t h a t t h o s e r e s t r i c t i o n s d o n o t p r o h i b i t t h e e s t a b l i s h m e n t o r