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MEMORANDUM To:Saint Anthony Village City Council From:Mike Larson, Liquor Operations Manager Date:November 26, 2024 City Council Work Session Request:Saint Anthony Village Municipal Dispensary Presentation BACKGROUND Cannabis in Minnesota is legal for recreational use as of August 1, 2023. On May 30, 2023, Governor Tim Walz signed House File 100 into law, legalizing the use, possession, and cultivation of cannabis within the state. Minnesota law permits adults who are 21 years of age or older to purchase and possess up to 2 lbs. of marijuana flower (2 ounces in a public space), 8 grams of concentrate, and 800 mg of infused edibles in a private residence. Growing at home is permitted, as long as the plants cannot be seen from outside. Individuals may cultivate up to 8 plants, with only 4 flowering at once. Adults who are 21 years of age or older may also gift each other any amount up to the legal limit. Licenses for commercial sales will likely not be issued until 2025, with the exception of tribal nations, in order for the Office of Cannabis Management (OCM) to establish regulatory frameworks. The law established criteria for social equity applicants to be preapproved for cannabis business licenses sometime in 2024. Social equity applicants include people or family members of individuals who were previously convicted of marijuana offenses, military veterans, residents of high-poverty areas and "emerging farmers" who have provided the majority of labor and management for a small farm for at least three years. 2024 LEGISLATIVE CHANGES Legislation signed into law in 2024 that modified the 2023 legislation established quantity limits on types of licenses, and a lottery system to distribute cannabis business licenses in 2025. Applicants meeting minimum requirements that include location selection and business plans will be entered into the lottery and recipients chosen at random. Another change in 2024 allows for licenses to be issued to cities to open municipal cannabis stores independent of the lottery process. These licenses will not count against the OCM's license caps or any limits on retail licenses that local governments may impose. OPPORTUNITY FOR A MUNICPAL OPERATION The legislation signed into law over the past two sessions presents an opportunity for cities to establish a retail municipal operation similar to the municipal liquor operation the City has operated since 1948, if the Council should determine that it is in the best interests of the City to do so. To make that determination, staff has been monitoring the legislative developments and coordinating with industry resources to learn about the law and the cannabis industry. Attached to this memo is a proposal from Voyageur Cannabis Services that provides the City a detailed report for operating a Municipal Dispensary. Staff will continue to provide additional research to inform a Council decision. 9