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2024-10-15 City Council Work Session PacketCITY OF MENDOTA HEIGHTS CITY COUNCIL WORK SESSION MEETING AGENDA October 15, 2024 at 5:00 PM Mendota Heights City Hall, 1101 Victoria Curve, Mendota Heights 1.Call to Order 2.Discussion a.Victoria Road Noise Barrier b.City Council Priorities and FY2025 Preliminary Budget c.Cannabis Ordinance Preliminary Discussion 3.Adjourn Alternative formats or auxiliary aids are available to individuals with disabilities upon request. Please contact City Hall at 651-452-1850 or by emailing cityhall@mendotaheightsmn.gov Page 1 of 73 This page is intentionally left blank 2.a City Council Work Session Memo MEETING DATE: October 15, 2024 TO: Mayor, City Council and City Administrator FROM: Ryan Ruzek, Public Works Director SUBJECT: Victoria Road Noise Barrier ACTION REQUEST: The Council is asked to discuss a petition received from residents to apply to the Minnesota Department of Transportation (MnDOT) to construct a standalone noise barrier along Victoria Road. BACKGROUND: MnDOT Metro has a standalone noise barrier program which is a solicitation-based process requiring cities to submit applications to be considered for noise wall funding. The MnDOT program has recently increased the funding for this program from $2M per year to $3M. Applications received in 2025 would be for the fiscal year of 2030. The Program requires a local match of 10% for the construction costs and an additional 8% of the local match for contract costs. The city is also responsible for maintenance on the resident side of the barrier. Additional procedures and rules are shown in the attached program manual. Residents submitted a petition asking the city to apply for a noise wall. The location selected spans partially over two MnDOT study areas that rank 97 and 101. The MnDOT preliminary study results show these segments meet the cost/benefit analysis. Staff would need to confirm funding sources but are hopeful the Municipal State Aid funding could be a potential source. If that is not an option, the city would need to fund the project through an alternate source. The city could also consider specially assessing the benefiting properties for the costs as the improvements would not benefit the city as a whole. If the city chooses to apply for the program, MnDOT will perform additional analysis of the area which may allow for a shorter wall is certain areas. Preliminary estimates based on the MnDOT application are as follows: Concrete barrier – 3,500 ft long x 20 ft height x $100 = $7,000,000 x 10% local match equals Page 2 of 73 $700,000 + $56,000 = $756,000 Wood barrier - 3,500 ft long x 20 ft height x $60 = $4,200,000 x 10% local match equals $420,000 + $33,600 = $453,600 Additional directions and information about this program are also available on the MnDOT website: http://www.dot.state.mn.us/environment/noise/metro.html Timeline for solicitation: • September 1, 2024 – Applications accepted • December 31, 2024 – Applications due • Jan to April 2025 – MnDOT conducts noise analysis for applications received and ranks applications based on existing noise levels, length of the barrier, number of benefited homes, and cost-effectiveness of a noise barrier • Spring 2025 – MnDOT announces selected project(s) • 2025 to 2026 – Project(s) are scoped and programmed into MnDOT’s STIP and City’s CIP (as needed) • 2026 to 2029 – MnDOT designs project(s) and coordinates with selected city • FY 2030 – Begin project construction The updated version of the noise study report is available at: https://edocs- public.dot.state.mn.us/edocs_public/DMResultSet/download?docId=25639592 Information about ongoing and upcoming selected Standalone Noise Barrier projects is available at: https://www.dot.state.mn.us/metro/projects/standalonenoisebarrier/upcoming.html ATTACHMENTS: 1. Sound Barrier Petition 2. Sound Barrier Map 3. MnDOT Metro Standalone Noise Barrier App Directions 4. 2024 Metro Application for Noise Mitigation Page 3 of 73 Page 4 of 73 Page 5 of 73 Page 6 of 73 Page 7 of 73 Page 8 of 73 2069 1960 2031 1060 995 1044 1080 897 1040 1877 1007 1013 989 1019 10261032 1845 1036 1001 1853 897 1861 1869 1084 1000 1861 999 1853 1839 1869 1845 992 1944 18301841 1045 988 1092 1940 1025 1936 1824 2091 1084 2085 1087 1016 1824 998 1853 1002 1090 1837 2078 2049 2041 1861 1848 1091 1871 1075 1924 1831 1065 1055 1088 1923 1882 1854 1831 1985 1823 2086 2089 1096 2076 1001 2064 1829 2056 1827 2048 2059 2069 2058 2098 2066 1085 2077 1074 1095 1085 1079 1085 1827 1082 1040 1857 1080 1867 1086 2036 1854 1899 1915 1883 1881 2050 1839 1842 1840 1838 1889 1830 1847 1092 1872 1832 1085 1083 1089 1860 1832 1927 1058 1856 1848 1075 1939 1081 1840 1859 1880 1824 1858 1093 10461052 1855 1864 1848 1846 1856 1845 1818 1004 1839 2061 1834 1862 2049 1870 1875 1087 2094 1066 1825 1842 1831 1090 1920 1837 2078 2086 1836 1817 2095 19411933 1823 1822 2088 1977 1981 1916 2095 2071 1948 1821 1813 2068 2094 1822 1915 2044 2047 2053 2081 2075 2060 2061 2054 2067 1816 2069 1821 1812 2098 2069 1818 1835 20992098 1833 1833 1859 1806 1833 1833 18331833 1833 1833 1810 892 1877 1870 1808 999 1837 1857 1847 1845 1819 1805 1841 1843 1805 1000 2101 1818 1805 1805 1870 1869 1805 1951 1869 1805 1853 1851 1855 1849 1869 1869 1869 1017 1870 1815 1870 1869 1869 1870 1805 1805 1869 1869 1869 1869 1869 1869 1979 9861890 1101 1960 1870 1901 1895 1861 1877 1836 1805 1805 1875 1120 2102 1804 1821 18051815 890 1842 1830 1848 HIGHWAY 62LEXINGTON AVEVICTORIA RD SINTERSTATE 35EWALSH LNAVANTI DR DAKOTA DR HIGHWAY 62 WB RAMPTWIN CIRCLE DRTIMMY STSUMMIT LNWILLIAM CTPATRICIA STTHERESA STVA IL DR FARO LNEAGLE RIDGE DR IN T E R S T AT E 3 5 E SB R AMP CARMEN LN MARY ADELE AVE HIGHWAY 62 EB RAMP ROLLING GREEN CURV OXFORD CT BWANA CT C R O W N P O IN T D R WEST CIRCLE CT WINDWOOD CT TOM THUMB BLVD INTERSTATE 35EHIGHWAY 62 Nearmap US Inc Victoria RoadSound Barrier Petition Date: 9/18/2024 City ofMendotaHeights0510 SCALE IN FEET GIS Map Disclaimer:This data is for informational purposes only and should not be substituted for a true title search, property appraisal, plat,survey, or for zoning verification. The City of Mendota Heights assumes no legal responsibility for the information containedin this data. The City of Mendota Heights, or any other entity from which data was obtained, assumes no liability for any errorsor omissions herein. If discrepancies are found, please contact the City of Mendota Heights. Contact "Gopher State One Call" at 651-454-0002 for utility locations, 48 hours prior to any excavation. Page 9 of 73 MnDOT Metro District Standalone Noise Barrier Program September 2024 Page 10 of 73 1 Program Background The Minnesota Department of Transportation (MnDOT) has been constructing noise walls and barriers during roadway construction projects since the mid-1970s. In 1974, the Minnesota State Legislature directed the Minnesota Pollution Control Agency (MPCA) to adopt state noise standards (M.S. 116.07, Subdivision 2). Federal noise standards specific to highway traffic noise are codified in 23 CFR 772. In 1995, the Minnesota State Legislature directed MnDOT (MN Statute 161.125 Sound abatement along highways) to develop a statewide priority list to direct state resources to mitigate traffic noise for locations not adjacent to new roadway construction, when mitigation may be required by federal law. MnDOT has developed the Standalone Noise Barrier Program in order to address the legislative directive and provide funding for construction of noise barriers along state highways in areas where no noise abatement measures exist and no major construction projects are currently programmed. The Metro District currently provides $3 million in annual discretionary funding for this program. Selected standalone noise barrier projects require a 10% cost share from the city where the noise barrier is being proposed. In order to determine areas that may be eligible for the Standalone Noise Barrier Program, MnDOT Metro maintains a list of areas within the Metro District where federal residential noise standards are exceeded. These areas are ranked based on existing noise levels, number of homes adjacent to the highway, and cost effectiveness of a noise barrier. The ranking list is updated approximately every five years. The most recent ranking list can be found here: 2022 Metro District Highway Noise Abatement Study In 2018, MnDOT Metro started using a solicitation-based process to select standalone noise barrier projects. Interested cities must fill out an application form and provide information about the area where a noise barrier is being requested. MnDOT then conducts a noise study and ranks the applications received based on existing noise levels, length of barrier, number of benefited homes, and cost effectiveness of a noise barrier. The top ranking noise barrier project(s) is then programmed into the MnDOT 4- year STIP. Applications are received annually from September 1 to December 31 and projects are selected before June of the following calendar year. Projects would typically be constructed 4-5 years out from the time of selection. The 2024/2025 Solicitation process will be selecting a project(s) to be constructed in fiscal year 2030. This document outlines the MnDOT Metro District process for local governmental authorities to apply to receive funding for standalone noise barriers in the Metro area. Page 11 of 73 2 Noise Abatement Criteria and Standards Any noise barriers constructed under this program must meet the criteria for feasibility, reasonableness, and cost effectiveness identified in our policy which can be found here: MnDOT’s 2017 Noise Requirements The Federal Highway Administration (FHWA) noise abatement criteria (NAC) differ by the type of land use, apply to all hours of the day and night, and identify where noise abatement should be considered. The FHWA NAC is based on the hourly Leq. The Leq is the sound level in dBA, equivalent to the total sound energy over a stated period of time. The Leq (h) designates the hourly value of the Leq. In effect, the Leq is analogous to a time averaged sound level over a given period of time. A residence is considered impacted by traffic noise when noise levels approach or exceed the Federal NAC. In Minnesota, approaching is defined as being within 1 dBA of the Federal NAC (e.g., 66 dBA for residential land uses). For a noise barrier to be feasible and reasonable it must meet the following criteria: •Feasibility: A noise barrier is considered feasible if at least one receptor behind the noise barrier will experience a 5 dBA reduction in noise levels. Other engineering and site factors are also considered, such as safety, drainage, utilities, and maintenance needs. •Noise Design Goal: At least one receptor behind the noise barrier must experience at least a 7 dBA reduction of noise. •Cost Effectiveness: The cost of the noise barrier cannot exceed $78,500 per benefitted receptor. A benefitted receptor is a property that will experience at least a 5 dBA reduction in noise levels. MnDOT uses a noise barrier cost of $36 per square foot for estimating noise barrier costs. For example, if a barrier costs $700,000 and would reduce noise levels by at least 5 decibels for 10 homes, the total calculated cost per benefitted receptor would be $70,000, which would meet the cost effectiveness criteria. Feasible Noise Mitigation Measures Earthen berms and noise walls, or a combination of the two, are eligible to use as mitigation through this program. Earth berms can be very cost effective but are less common because sufficient land is not commonly available. Noise walls are normally the most cost effective and constructible form of noise mitigation. However, even noise walls are not effective in all cases because of limitations on controlled highway access, topography, and right of way. Page 12 of 73 3 Instructions for Completing Application for MnDOT Metro Standalone Noise Barrier 1. Name of governmental authority making application and agreeing to 10% cost share: Name of the township, city, county, etc. applying for a noise mitigation project and accountable for 10% of total cost of the project. For estimating noise barrier costs, use $100/ft2 for concrete barriers and $60/ ft2 for wood barriers*. If noise barrier material is unknown at this time, use higher cost. Example: length of barrier x 20 foot height x $100 *Note: these costs should only be used for purposes of estimating the city’s 10% cost share; $36/ft2 should be used to determine if the noise barrier meets MnDOT’s cost effectiveness criteria of $78,500 per benefited receptor. 2. Highway/interstate adjacent to area for which application is being made: Identification number for the limited access freeway thought to be the source of the noise. Per Statute 161.125, standalone noise barrier mitigation is available only for limited access freeways or expressways. Note: gaps from driveways, etc., reduce the effectiveness of the noise barriers. 3. Current ranking: Provide current site ranking from 2022 Metro District Highway Noise Abatement Study If site is not on current ranking list, contact Natalie Ries, MnDOT Metro District Noise Supervisor, to determine if site is eligible for program funding. Natalie.Ries@state.mn.us or 651-234-7681. 4. Limits of area of application on a map (required) or aerial photo (preferred): Side of Freeway: The side of the freeway along which the noise mitigation is desired. If there are eligible residents on both sides of the freeway, enter “Both.” Beginning Point: A landmark or feature, such as a cross road, distinguishing the beginning point of the area to be mitigated by the potential noise barrier. Mile or reference point is preferred. Ending Point: See Beginning Point information above. Estimated length of proposed noise barrier (in feet): The estimated length of the proposed noise barrier in feet. Page 13 of 73 4 5.Were the majority of the residential units built prior to 1997? This is a confirmation of the number and location of the dwelling units which were constructed prior to 1997 as documented in County records. In order for areas to be eligible for this program, MnDOT requires dwelling units to be constructed prior to 1997 as MN Statue 161.125 was passed in 1997. Dwelling units constructed after 1997 are not eligible to be counted as benefited receptors as part of the cost effectiveness calculation. 6.Number of residential units adjacent to the roadway: This is the number of dwelling units immediately adjacent to the roadway; no intervening structures. 7.Existing noise levels: Existing noise levels must approach or exceed 67.0 dBA Leq. Approaching is defined as being within 1 dBA of the Federal Noise Abatement Criteria (e.g., 66 dBA Leq for residential land uses). Contact Natalie Ries for current noise measurement data or use MnDOT’s Flat Earth Noise Level Estimator Excel spreadsheet available at MnDOT's Noise Analysis Homepage 8.Type of noise barrier: Indicate type of noise barrier material that is being requested by city. If unknown at this time, select TBD. 9.Additional comments: Provide any additional information about the noise barrier site, including notable site characteristics or timing considerations for upcoming LGU projects. 10. Signature and Title of local official and Date: Signature and title of the official validating that the included information is accurate and the City Council funding resolution/project support are approved. Include copies of official approval documents. Example city resolution is provided. Page 14 of 73 5 MnDOT Metro Standalone Barrier Project Procedures and Rules 1. Applications will be accepted annually from September 1st through December 31st. 2. Applications not selected will need to resubmit to be considered again for future years. 3. The proposed area must not be within the limits of a future Type I project identified in the 10-year work plan (MnDOT CHIP) or other projects where MnDOT funding will be used. 4. The proposed area must not be within the limits a past Type I project for which a noise analysis was completed within the last 20 years and noise mitigation for this area was determined not be feasible or reasonable. 5. Existing noise levels must approach (66.0 dBA) or exceed 67.0 dBA Leq. 6. For screening, the applicant can compute the cost effectiveness by taking the assumed barrier cost (length x 20 feet in height x $36/ sq. ft.) and then dividing that number by the number of homes and/or apartments adjacent to the barrier. MnDOT uses a maximum cost effectiveness value of $78,500 /benefited receptor. 7. MnDOT will verify the area to decide the number of eligible dwelling units (i.e., benefited receptors) and the approximate the cost of noise abatement. As needed, MnDOT will complete noise modeling to create a ranked eligibility list of applications received using both the cost effectiveness of the barrier and the loudness of the noise. MnDOT will release ranking results of all noise studies to the applicants. 8. MnDOT will propose noise barrier project(s) for the highest ranked location(s) from the eligibility list of applications received. MnDOT may use its discretion to balance fiscal year funding limitations as needed. 9. Final project costs will be developed through MnDOT’s project scoping and cost estimating process. If costs greatly exceed the application estimates, MnDOT will coordinate with cities to determine if project is still desired. 10. Projects would typically be constructed 4-5 years out from the time of selection. Page 15 of 73 6 11.All noise mitigation will be designed by MnDOT following MnDOT design specifications. 12.MnDOT will maintain the structural soundness of the noise mitigation structure and will be accountable for the aesthetic quality of the structure on the freeway facing side only. The local governmental authority is required to maintain the resident side of the barrier. 13. If the project is selected, local authorities must agree to contribute 10% of the total cost of the construction (as noted in the agreement). In addition, local authorities will also be responsible for the construction contract costs, which is typically 8% of the local authority’s share of the construction costs. (Example: local authority’s total project cost is $100,000, then $100,000 X 8% = $8,000 additional project contract costs.) 14.Failure to comply with all of the above procedures and rules will make the noise barrier project ineligible for MnDOT funding. Page 16 of 73 7 Example Application Page 17 of 73 8 Page 18 of 73 9 Example Map Page 19 of 73 10 Example City Resolution Page 20 of 73 2024 Application for MnDOT Metro Standalone Noise Barrier 1. Name of governmental authority submitting application and agreeing to local cost share: 2. Highway/Interstate adjacent to area for which the application is being made: 3. Current ranking on 2022 Metro District Highway Noise Abatement Study :___________ 4. Limits of area of application: a map is required; aerial photo is preferred: Side of Highway: (N, S, E, W, Both) Beginning Point: (Cross roads, etc.) Ending Point: Estimated length of proposed noise barrier (in feet): 5. Were the majority of the residential units constructed prior to 1997? Yes / No Note: Only residential areas constructed prior to 1997 are eligible. 6. Number of residential units (homes and/or apartments) adjacent to the roadway: 7. Existing noise level: Note: Contact Natalie Ries at MnDOT Metro or use MnDOT’s Flat Earth Noise Level Estimator Excel Spreadsheet available at MnDOT's Noise Analysis Homepage 8. What type of noise barrier is being requested? Concrete Wood TBD 9. Additional comments: ________________________________________________________________________________ ________________________________________________________________________________ Page 21 of 73 10. I certify that the application information provided is correct. City appoval/resolution is attached. Print name and title of local official Date Signature and title of local official Date Page 22 of 73 This page is intentionally left blank 2.b City Council Work Session Memo MEETING DATE: October 15, 2024 TO: Mayor and City Council FROM: Cheryl Jacobson, City Administrator SUBJECT: City Council Priorities and FY2025 Preliminary Budget ACTION REQUEST: The city council should discuss their priorities as they relate to the fiscal year 2025 preliminary budget. BACKGROUND: At its September 17 meeting, the city council approved the fiscal year 2025 preliminary budget. The proposed preliminary levy for 2025 is $13,682,993, which reflects an increase of 6.16% over 2024. The preliminary General Fund budget for 2025 is $13,226,981, an increase of 7.25% over 2024. After discussing and approving the preliminary budget, the city council asked to review its priorities and the General Fund fund balance to determine if any budget adjustments should be made prior to the adoption of the FY2025 final budget at the December 3 city council meeting. ATTACHMENTS: 1.Priorities and Goals Summary 2024 Page 23 of 73 City of Mendota Heights 2023-2024 City Council Priorities and Goals PRIORITY 1: ECONOMIC VITALITY AND COMMUNITY VIBRANCY Goal 1.1 Support a vibrant business environment Goal 1.2 Foster a welcoming and inclusive community by promoting diversity, equity andinclusion Goal 1.3 Invest in infrastructure that supports residential and business technology connections PRIORITY 2: ENVIRONMENTAL SUSTAINABILITY AND STEWARDSHIP Goal 2.1 Integrate sustainability practices into municipal operations and infrastructure investments Goal 2.2 Enhance public knowledge and use of natural resources and sustainability best practices Goal 2.3 Lead investments in and expansion of natural resources Goal 2.4 Protect historic and natural spaces PRIORITY 3: PREMIERE PUBLIC SERVICES AND INFRASTRUCTURE Goal 3.1 Build and maintain high-quality public facilities and infrastructure Goal 3.2 Attract and retain a talented workforce and strive to be a workplace of choice Goal 3.3 Promote responsible fiscal management practices Goal 3.4 Provide excellent public services that support a safe, engaged, and connectedcommunity PRIORITY 4: INCLUSIVE AND RESPONSIVE GOVERNMENT Goal 4.1 Expand public knowledge and awareness of city processes, policies, opportunitiesfor engagement Goal 4.2 Generate opportunities for community gathering and connection Goal 4.3 Define strategic vision for community goals and expectations Page 24 of 73 2.c City Council Work Session Memo MEETING DATE: October 15, 2024 TO: Mayor, City Council and City Administrator FROM: Sarah Madden, Community Development Manager SUBJECT: Cannabis Ordinance Preliminary Discussion ACTION REQUEST: The City Council will receive preliminary information on the creation of the City of Mendota Height's Cannabis Ordinance regulations. No formal action is required. BACKGROUND: In 2023, the Minnesota Legislature passed a bill legalizing adult use of cannabis and cannabis businesses. Part of this bill also created The Office of Cannabis Management (OCM), which was created to regulate and oversee the cannabis industry in Minnesota. State statute limited the regulations a city can place on the use, sale and production of cannabis and cannabis products.In mid-June, the OCM released “A Guide for Local Governments on Adult-Use Cannabis”, which includes a model ordinance. This document is attached for the Council to reference throughout the process. In developing the City's new cannabis ordinance, local governments may not prohibit the possession, transportation, or use of cannabis, or the establishment or operation of a cannabis business licensed under state law, nor may they require additional licensing of cannabis businesses. However, they may adopt reasonable restrictions on the time, place, and manner of cannabis business operations, register retail cannabis businesses, and enforce certain zoning regulations within their jurisdiction, including buffers around potentially incompatible uses. Staff is currently working on the draft cannabis ordinance in order to have a completed ordinance adopted and published by January 1, 2025. Community Development, Administration, the City Clerk's office and the Police Department are involved in this process to coordinate the creation of the City's Cannabis regulations. The OCM is the licensing and general enforcement body for cannabis-based businesses. Local governments are permitted to register cannabis businesses and enforce some zoning regulations. Local governments are also responsible for compliance checks for age-verified sales and can inspect for compliance with city-specific regulations. ATTACHMENTS: 1.Minnesota OCM Local Government Guide Page 25 of 73 A Guide for Local Governments on Adult-Use Cannabis Version 1.4 Updated August 2024Page 26 of 73 Table of Contents Introduction ............................................................... 3 About OCM ............................................................... 4 Cannabis License Types ............................................. 5 Adult-Use Cannabis Law ........................................... 7 Cannabis Licensing Process........................................ 8 General Authorities .................................................. 10 Zoning and Land Use ................................................ 12 Local Approval Process ............................................. 15 Inspections and Compliance Checks ........................ 18 Municipal Cannabis Stores ...................................... 19 Creating Your Local Ordinance ............................... 20 Additional Resources ................................................ 21 Page 27 of 73 Introduction This guide serves as a general overview of Minnesota’s new adult-use cannabis law, and how local governments can expect to be involved. The guide also provides important information about Minnesota’s new Office of Cannabis Management (OCM), and the office’s structure, roles, and responsibilities. While medical cannabis continues to play an important role in the state’s cannabis environment, this guide is primarily focused on the adult-use cannabis law and marketplace. The following pages outline the variety of cannabis business licenses that will be issued, provide a broad summary of important aspects of the adult-use cannabis law, and cover a wide range of expectations and authorities that relate to local governments. This guide also provides best practices and important requirements for developing a local cannabis ordinance. Chapter 342 of Minnesota law was established by the State Legislature in 2023 and was updated in 2024. Mentions of “adult-use cannabis law” or “the law” throughout this guide refer to Chapter 342 and the changes made to it. As of this guide’s date of publication, state regulations governing the adult-use cannabis market have not yet been published—this document will be updated when such regulations become effective. This guide is not a substitute for legal advice, nor does it seek to provide legal advice. Local governments and municipal officials seeking legal advice should consult an attorney. Page 3 Page 28 of 73 About OCM Minnesota’s Office of Cannabis Management is the state regulatory office created to oversee the implementation and regulation of the adult-use cannabis market, the medical cannabis market, and the consumer hemp industry. Housed within OCM are the Division of Medical Cannabis (effective July 1, 2024), which operates the medical cannabis program, and the Division of Social Equity, which promotes development, stability, and safety in communities that have experienced a disproportionate, negative impact from cannabis prohibition and usage. OCM, through Chapter 342, is tasked with establishing rules and policy and exercising its regulatory authority over the Minnesota cannabis industry. In its duties, OCM is mandated to: Promote public health and welfare. Protect public safety. Eliminate the illicit market for cannabis flower and cannabis products. Meet the market demand for cannabis flower and cannabis products. Promote a craft industry for cannabis flower and cannabis products. Prioritize growth and recovery in communities that have experienced a disproportionate, negative impact from cannabis prohibition. OCM governs the application and licensing process for cannabis and hemp businesses, specific requirements for each type of license and their respective business activities, and conducts enforcement and inspection activities across the Minnesota cannabis and hemp industries. Page 4 Page 29 of 73 License Types Minnesota law allows for 13 different types of business licenses, each fulfilling a unique role in the cannabis and hemp supply chain. In addition to license types below, OCM will also issue endorsements to license holders to engage in specific activities, including producing, manufacturing, and sale of medical cannabis for patients. Microbusiness Microbusinesses may cultivate cannabis and manufacture cannabis products and hemp products, and package such products for sale to customers or another licensed cannabis business. Microbusiness may also operate a single retail location. Mezzobusiness Mezzobusinesses may cultivate cannabis and manufacture cannabis products and hemp products, and package such products for sale to customers or another licensed cannabis business. Mezzobusiness may also operate up to three retail locations. Cultivator Cultivators may cultivate cannabis and package such cannabis for sale to another licensed cannabis business. Manufacturer Manufacturers may manufacture cannabis products and hemp products, and package such products for sale to a licensed cannabis retailer. Retailer Retailers may sell immature cannabis plants and seedlings, cannabis, cannabis products, hemp products, and other products authorized by law to customers and patients. Wholesaler Wholesalers may purchase and/or sell immature cannabis plants and seedlings, cannabis, cannabis products, and hemp products from another licensed cannabis business. Wholesalers may also import hemp-derived consumer products and lower-potency hemp edibles. Page 5 Page 30 of 73 License Types (continued) Transporter Transporters may transport immature cannabis plants and seedlings, cannabis, cannabis products, and hemp products to licensed cannabis businesses. Testing Facility Testing facilities may obtain and test immature cannabis plants and seedlings, cannabis, cannabis products, and hemp products from licensed cannabis businesses. Event Organizer Event organizers may organize a temporary cannabis event lasting no more than four days. Delivery Service Delivery services may purchase cannabis, cannabis products, and hemp products from retailers or cannabis business with retail endorsements for transport and delivery to customers. Medical Cannabis Combination Business Medical cannabis combination businesses may cultivate cannabis and manufacture cannabis and hemp products, and package such products for sale to customers, patients, or another licensed cannabis business. Medical cannabis combination businesses may operate up to one retail location in each congressional district. Lower-Potency Hemp Edible Manufacturer Lower-potency hemp edible manufacturers may manufacture and package lower-potency hemp edibles for consumer sale, and sell hemp concentrate and lower-potency hemp edibles to other cannabis and hemp businesses. Lower-Potency Hemp Edible Retailer Lower-potency hemp edible retailers may sell lower-potency hemp edibles to customers. Each license is subject to further restrictions on allowable activities. Maximum cultivation area and manufacturing allowances vary by license type. Allowable product purchase, transfer, and sale between licensees are subject to restrictions in the law. Page 6 Page 31 of 73 The Adult-Use Cannabis Law Minnesota’s new adult-use cannabis law permits the personal use, possession, and transportation of cannabis by those 21 years of age and older, and allows licensed businesses to conduct cultivation, manufacturing, transport, delivery, and sale of cannabis and cannabis products. For Individuals Possession limits: Flower - 2 oz. in public, 2 lbs. in private residence Concentrate - 8 g Edibles (including lower-potency hemp) - 800 mg THC Consumption only allowed on private property or at licensed businesses with on-site consumption endorsements. Consumption not allowed in public. Gifting cannabis to another individual over 21 years old is allowed, subject to possession limits. Home cultivation is limited to four mature and four immature plants (eight total) in a single residence. Plants must be in an enclosed and locked space. Home extraction using volatile substances (e.g., butane, ethanol) is not allowed. Unlicensed sales are not allowed. For Businesses Advertising: May not include or appeal to those under 21 years old. Must include proper warning statements. May not include misleading claims or false statements. Billboards are not allowed. The flow of all products through the supply chain must be tracked by the state-authorized tracking system. All products sold to consumers and patients must be tested for contaminants. Home delivery is allowed by licensed businesses. Page 7 Page 32 of 73 The Cannabis Licensing Process An applicant will take the following steps to proceed from application to active licensure. As described, processes vary depending on social equity status and/or whether the type of license being sought is capped or uncapped in the general licensing process. License Preapproval: Early Mover Process for Social Equity Applicants The license preapproval process is a one-time application process available for verified social equity applicants. State law requires OCM to open the application window on July 24, 2024, and close the window on August 12, 2024. The preapproval process is available for the following license types, and all are capped in this process: microbusiness, mezzobusiness, cultivator, retailer, wholesaler, transporter, testing facility, and delivery service. Applicant’s social equity applicant (SEA) status verified. Complete application and submit application fees. Application vetted for minimum requirements by OCM. Application (if qualified) entered into lottery drawing. If selected in lottery, OCM completes background check of selected applicant and issues license preapproval. Applicant with license preapproval* submits business location and amends application accordingly. OCM forwards completed application to local government. Local government completes certification of zoning compliance. OCM conducts site inspection. When regulations are adopted, license becomes active, operations may commence. *For social equity applicants with license preapproval for microbusiness, mezzobusiness, or a cultivator license, they may begin growing cannabis plants prior to the adoption of rules if OCM receives approval from local governments in a form and manner determined by the office. This is only applicable to cultivation and does not authorize retail sales or other endorsed activities of the licenses prior to the adoption of rules. Preapproval steps: Page 8 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. Page 33 of 73 The Cannabis Licensing Process (cont.) The general licensing process will align with the adoption of rules and OCM will share more information about the timing of general licensing process. The general licensing process includes social equity applicants and non-social equity applicants. General Licensing: Cultivator, Manufacturer, Retailer, Mezzobusiness Complete application and submit application fees. Application vetted for minimum requirements by OCM. Application (if qualified) entered into lottery drawing. If selected in lottery, OCM completes background check of selected applicant and issues preliminary approval. Applicant with preliminary approval submits business location and amends application accordingly. OCM forwards completed application to local government. Local government completes certification of zoning compliance. OCM conducts site inspection. License becomes active, operations may commence.* General Licensing: Microbusiness, Wholesaler, Transporter, Testing Facility, Event Organizer Complete application and submit application fees.1. Application vetted for minimum requirements by OCM.2. For qualified applicants, OCM completes background check of vetted applicant and issues preliminary approval. 3. Selected applicant submits business location and amends application accordingly.4. OCM forwards completed application to local government.5. Local government completes certification of zoning compliance.6. OCM conducts site inspection.7. License becomes active, operations may commence.*8. 1. 2. 3. 4. 5. 6. 7. 8. 9. *For businesses seeking a retail endorsement (microbusiness, mezzobusiness, and retailer), a valid local retail registration is required prior to the business commencing any retail sales. See Page 16 for information on the local retail registration process. Page 9 Page 34 of 73 General Authorities Local governments in Minnesota have various means of oversight over the cannabis market, as provided by the adult-use cannabis law. Local governments may not issue outright bans on cannabis business, or limit operations in a manner beyond what is provided by state law. Cannabis Retail Restrictions (342.13) Local governments may limit the number of retailers and microbusiness/mezzobusinesses with retail endorsements allowed within their locality, as long as there is at least one retail location per 12,500 residents. Local units of government are not obligated to seek out a business to register as cannabis business if they have not been approached by any potential applicants, but cannot prohibit the establishment of a business if this population requirement is not met. Local units of government may also issue more than the minimum number of registrations. Per statutory direction, a municipal cannabis store (Page 19) cannot be included in the minimum number of registrations required. For population counts, the state demographer estimates will likely be utilized. Tribal Governments (342.13) OCM is prohibited from and will not issue state licenses to businesses in Indian Country without consent from a tribal nation. Tribal nations hold the authority to license tribal cannabis businesses on tribal lands – this process is separate than OCM’s licensing process and authority. Subject to compacting, Tribal nations may operate cannabis businesses off tribal lands. There will be more information available once the compacting processes are complete. Taxes (295.81; 295.82) Retail sales of taxable cannabis products are subject to the state and local sales and use tax and a 10% gross receipts tax. Cannabis gross receipts tax proceeds are allocated as follows: 20% to the local government cannabis aid account and 80% to the state general fund. Local taxes imposed solely on sale of cannabis products are prohibited. Cannabis retailers will be subject to the same real property tax classification as all other retail businesses. Real property used for raising, cultivating, processing, or storing cannabis plants, cannabis flower, or cannabis products for sale will be classified as commercial and industrial property. Page 10 Page 35 of 73 General Authorities (cont.) Retail Timing Restrictions (342.13) Local governments may prohibit retail sales of cannabis between the hours of 8 a.m. and 10 a.m. Monday-Saturday, and 9 p.m. and 2 a.m. the following day. Operating Multiple Locations with One License Certain cannabis licenses allow for multiple retail locations to be operated under a single license, with the following limitations: Retailers: up to five retail locations. Mezzobusinesses: up to three retail locations. Microbusinesses: up to one retail location. Medical cannabis combination businesses: one retail location per congressional district. Additionally, medical cannabis combination businesses may cultivate at more than one location within other limitations on cultivation. For all other license types, one license permits the operation of one location. Each retail location requires local certification and/or registration. Page 11 Page 36 of 73 Zoning and Land Use Buffer Guidelines (342.13) State law does not restrict how a local government conducts its zoning designations for cannabis businesses, except that they may prohibit the operation 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 playgrounds and athletic fields. Zoning Guidelines While each locality conducts its zoning differently, a few themes have emerged across the country. For example, cannabis manufacturing facilities are often placed in industrial zones, while cannabis retailers are typically found in commercial/retail zones. Cannabis retail facilities align with general retail establishments and are prohibited from allowing consumption or use onsite, and are also required to have plans to prevent the visibility of cannabis and hemp-derived products to individuals outside the retail location. Industrial hemp is an agricultural product, and should be zoned as such. Cannabis businesses should be zoned under existing zoning ordinances in accordance with the license type or endorsed activities held by the cannabis business. Note that certain types of licenses may be able to perform multiple activities which may have different zoning analogues. In the same way municipalities may zone a microbrewery that predominately sells directly to onsite consumers differently than a microbrewery that sells packaged beer to retailers and restaurants, so too might a municipality wish to zone two microbusinesses based on the actual activities that each business is undertaking. Table 1, included on Pages 13 and 14, explains the types of activities that cannabis businesses might undertake, as well as, some recommended existing zoning categories. Page 12 Page 37 of 73 Endorsed Activity License Type Eligible to Do Endorsed Activity Description of Activity Comparable Districts Municipal Considerations Cultivation Cultivator Mezzobusiness Microbusiness Medical Cannabis Combination "Cultivation" means any activity involving the planting, growing, harvesting, drying, curing, grading, or trimming of cannabis plants, cannabis flower, hemp plants, or hemp plant parts. Indoor: Industrial, Commercial, Production Outdoor: Agricultural Odor Potential need for transportation from facility Waste, water, and energy usage Security Cannabis Manufacturing, Processing, Extraction Manufacturer Mezzobusiness Microbusiness Medical Cannabis Combination This group of endorsed activities turn raw, dried cannabis and cannabis parts into other types of cannabis products, e.g. edibles or topicals. Industrial, Commercial, Production Odor Potential need for transportation from facility Waste, water, and energy usage Security Hemp Manufacturing Lower-Potency Hemp Edible (LPHE) Manufacturing These business convert hemp into LPHE edible prodcuts. Industrial, Commercial, Production Odor Waste, water, and energy Wholesale Wholesale Cultivator Manufacturer Mezzobusiness Microbusiness Medical Cannabis Combination This activity and license type allows a business to purchase from a business growing or manufacturing cannabis or cannabis products and sell to a cannabis business engaged in retail. Industrial, Commercial, Production Need for transportation from facility Security Page 13 Zoning and Land Use (cont.) Table 1: Cannabis and Hemp Business Activities Page 38 of 73 Page 14 Endorsed Activity License Type Eligible to Do Endorsed Activity Description of Activity Comparable Districts Municipal Considerations Cannabis Retail Retailer Mezzobusiness Microbusiness Medical Cannabis Combination This endorsed activity and license types allow a business to sell cannabis and cannabis products directly to consumers. Retail, Neighborhood Shopping Districts, Light Industrial, Existing districts where off-sale liquor or tobacco sales are allowed. Micros may offer onsite consumption, similar to breweries. Micros and Mezzos may include multiple activities: cultivation, manufacture, and/or retail. Transportation Cannabis Transporter This license type allows a company to transport products from one license type to another. Fleet based business that will own multiple vehicles, but not necessarily hold a substantial amount of cannabis or cannabis products. Delivery Cannabis Delivery This license type allows for transportation to the end consumer. Fleet based business that will own multiple vehicles, but not necessarily hold a substantial amount of cannabis or cannabis products. Events Event Organizer This license entitles license holder to organizer a temporary event lasting no more than four days. Anywhere that the city permits events to occur, subject to other restrictions related to cannabis use. On site consumption. Retail sales by a licensed or endorsed retail business possible. Zoning and Land Use (cont.) Table 1: Cannabis and Hemp Business Activities (continued) Page 39 of 73 Local Approval Process Local governments play a critical role in the licensing process, serving as a near-final approval check on cannabis businesses nearing the awarding of a state license for operations. Once an applicant has been vetted by OCM and is selected for proceeding in the verification process, they are then required to receive the local government’s certification of zoning compliance and/or local retail registration before operations may commence. Local Certification of Zoning Compliance (342.13; 342.14) Following OCM’s vetting process, local governments must certify that the applicant with preliminary approval has achieved compliance with local zoning ordinances prior to the licensee receiving final approval from OCM to commence operations. During the application and licensing process for cannabis businesses, OCM will notify a local government when an applicant intends to operate within their jurisdiction and request a certification as to whether a proposed cannabis business complies with local zoning ordinances, and if applicable, whether the proposed business complies with state fire code and building code. According to Minnesota’s cannabis law, a local unit of government has 30 days to respond to this request for certification of compliance. If a local government does not respond to OCM’s request for certification of compliance within the 30 days, the cannabis law allows OCM to issue a license. OCM may not issue the final approval for a license if the local government has indicated they are not in compliance. OCM will work with local governments to access the licensing software system to complete this zoning certification process. Page 15 Page 40 of 73 Local Approval Process (cont.) Local Retail Registration Process (342.22) Once the licensing process begins, local government registration applies to cannabis retailers or other cannabis/hemp businesses seeking a retail endorsement. Local governments must issue a retail registration after verifying that: The business has a valid license or license preapproval issued by OCM. The business has paid a registration fee or renewal fee to the local government; Initial registration fees collected by a local government may be $500 or half the amount of the applicable initial license fee, whichever is less, and renewal registration fees may be $1,000 or half the amount of the applicable renewal license fee, whichever is less. The business is found to be in compliance with Chapter 342 and local ordinances. If applicable, the business is current on all property taxes and assessments for the proposed retail location. Local registrations may also be issued by counties if the respective local government transfers such authorities to the county. Determining a Process for Limiting Retail Registrations If a local government wishes to place a limitation on the number of retailers and microbusiness/mezzobusinesses with retail endorsements allowed within their locality (as long as there is at least one retail location per 12,500 residents, see Page 10), state law does not define the process for a local government’s selection if there are more applicants than registrations available. A few options for this process include the use of a lottery, a first-come/first-serve model, a rolling basis, and others. Local governments should work with an attorney to determine their specific process for selection if they wish to limit the number of licensed cannabis retailers per 342.13. Local governments are not required to limit the number of licensed cannabis retailers. Page 16 Page 41 of 73 Local Approval Process (cont.) Local governments are permitted specific authorities for registration refusal and registration suspension, in addition to—and not in conflict with—OCM authorities. Registration and Renewal Refusals Local governments may refuse the registration and/or certification of a license renewal if the license is associated with an individual or business who no longer holds a valid license, has failed to pay the local registration or renewal fee, or has been found in noncompliance in connection with a preliminary or renewal compliance check. Local Registration Suspension (342.22) Local governments may suspend the local retail registration of a cannabis business or hemp business if the business is determined to not be operating in compliance with a local ordinance authorized by 342.13 or if the operation of the business poses an immediate threat to the health and safety of the public. The local government must immediately notify OCM of the suspension if it occurs. OCM will review the suspension and may reinstate the registration or take enforcement action. Expedited Complaint Process (342.13) Per state law, OCM will establish an expedited complaint process during the rulemaking process to receive, review, read, and respond to complaints made by a local unit of government about a cannabis business. Upon promulgation of rules, OCM will publish the complaint process. At a minimum, the expedited complaint process shall require the office to provide an initial response to the complaint within seven days and perform any necessary inspections within 30 days. Within this process, if a local government notifies OCM that a cannabis business poses an immediate threat to the health or safety of the public, the office must respond within one business day. Page 17 Page 42 of 73 Inspections & Compliance Checks Local governments are permitted specific business inspection and compliance check authorities, in addition to—and not in conflict with—OCM authorities. Inspections and Compliance Checks (342.22) Local governments must conduct compliance checks for cannabis and hemp businesses holding retail registration at least once per calendar year. These compliance checks must verify compliance with age verification procedures and compliance with any applicable local ordinance established pursuant to 342.13. OCM maintains inspection authorities for all cannabis licenses to verify compliance with operation requirements, product limits, and other applicable requirements of Chapter 342. Page 18 Page 43 of 73 Municipal Cannabis Stores State law requires OCM issue a license to a city or county seeking to operate a single municipal cannabis store if the city or county: As authorized in Chapter 342.32, local governments are permitted to apply for a cannabis retail license to establish and operate a municipal cannabis store. Submits required application information to OCM, Meets minimum requirements for licensure, and Pays applicable application and license fee. A municipal cannabis store will not be included in the total count of retail licenses issued by the state under Chapter 342. A municipal cannabis store cannot be counted as retail registration for purposes of determining whether a municipality’s cap on retail registrations imposed by ordinance. Page 19 Page 44 of 73 Creating Your Local Ordinance Local governments may not prohibit the possession, transportation, or use of cannabis, or the establishment or operation of a cannabis business licensed under state law. Local governments may adopt reasonable restrictions on the time, place, and manner of cannabis business operations (see Page 11). Local governments may adopt interim ordinances to protect public safety and welfare, as any studies and/or further considerations on local cannabis activities are being conducted, until January 1, 2025. A public hearing must be held prior to adoption of an interim ordinance. If your local government wishes to operate a municipal cannabis store, the establishment and operation of such a facility must be considered in a local ordinance. As authorized in 342.13, a local government may adopt a local ordinance regarding cannabis businesses. Establishing local governments’ ordinances on cannabis businesses in a timely manner is critical for the ability for local cities or towns to establish local control as described in the law, and is necessary for the success of the statewide industry and the ability of local governments to protect public health and safety. The cannabis market’s potential to create jobs, generate revenue, and contribute to economic development at the local and state level is supported through local ordinance work. The issuance of local certifications and registrations to prospective cannabis businesses is also dependent on local ordinances. Model Ordinance For additional guidance regarding the creation of a cannabis related ordinance, please reference the addendum in this packet. Page 20 Page 45 of 73 Additional Resources OCM Toolkit for Local Partners Please visit OCM webpage (mn.gov/ocm/local-governments/) for additional information, including a toolkit of resources developed specifically for local government partners. The webpage will be updated as additional information becomes available and as state regulations are adopted. These resources are also included in the addendum of this packet. Toolkit resources include: Appendix A: Model Ordinance Appendix B: Retail Registration Form and Checklist Appendix C: Hemp Flower and Hemp-Derived Cannabinoid Product Checklist Appendix D: Enforcement Notice from the Office of Cannabis Management Appendix E: Notice to Unlawful Cannabis Sellers Local Organizations There are several organizations who also have developed resources to support local governments regarding the cannabis industry. Please feel free to contact the following for additional resources: League of Minnesota Cities Association of Minnesota Counties Minnesota Public Health Law Center Page 21 Page 46 of 73 Appendix A: Model Ordinance Page 47 of 73 Cannabis Model Ordinance The following model ordinance is meant to be used as a resource for cities, counties, and townships within Minnesota. The italicized text in red is meant to provide commentary and notes to jurisdictions considering using this ordinance and should be removed from any ordinance formally adopted by said jurisdiction. Certain items are not required to be included in the adopted ordinance: ‘OR’ and (optional) are placed throughout for areas where a jurisdiction may want to consider one or more choices on language. Section 1 Administration Section 2 Registration of Cannabis Business Section 3 Requirements for a Cannabis Business (Time, Place, Manner) Section 4 Temporary Cannabis Events Section 5 Lower Potency Hemp Edibles Section 6 Local Government as a Retailer Section 7 Use of Cannabis in Public AN ORDINANCE OF THE (CITY/COUNTY OF ______) TO REGULATE CANNABIS BUSINESSES The (city council/town board/county board) of (city/town/county) hereby ordains: Section 1. Administration 1.1 Findings and Purpose (insert local authority) makes the following legislative findings: The purpose of this ordinance is to implement the provisions of Minnesota Statutes, chapter 342, which authorizes (insert local authority) to protect the public health, safety, welfare of (insert local here) residents by regulating cannabis businesses within the legal boundaries of (insert local here). (insert local authority) finds and concludes that the proposed provisions are appropriate and lawful land use regulations for (insert local here), that the proposed amendments will promote the community's interest in reasonable stability in zoning for now and in the future, and that the proposed provisions are in the public interest and for the public good. 1.2 Authority & Jurisdiction A county can adopt an ordinance that applies to unincorporated areas and cities that have delegated authority to impose local zoning controls. (insert local authority) has the authority to adopt this ordinance pursuant to: a) Minn. Stat. 342.13(c), regarding the authority of a local unit of government to adopt reasonable restrictions of the time, place, and manner of the operation of Page 48 of 73 a cannabis business provided that such restrictions do not prohibit the establishment or operation of cannabis businesses. b)Minn. Stat. 342.22, regarding the local registration and enforcement requirements of state-licensed cannabis retail businesses and lower-potency hemp edible retail businesses. c)Minn. Stat. 152.0263, Subd. 5, regarding the use of cannabis in public places. d) Minn. Stat. 462.357, regarding the authority of a local authority to adopt zoning ordinances. Ordinance shall be applicable to the legal boundaries of (insert local here). (Optional) (insert city here) has delegated cannabis retail registration authority to (insert county here). However, (insert city here) may adopt ordinances under Sections (2.6, 3 and 4) if (insert county here) has not adopted conflicting provisions. 1.3 Severability If any section, clause, provision, or portion of this ordinance is adjudged unconstitutional or invalid by a court of competent jurisdiction, the remainder of this ordinance shall not be affected thereby. 1.4 Enforcement The elected body of a jurisdiction can choose to designate an official to administer and enforce this ordinance. The (insert name of local government or designated official) is responsible for the administration and enforcement of this ordinance. Any violation of the provisions of this ordinance or failure to comply with any of its requirements constitutes a misdemeanor and is punishable as defined by law. Violations of this ordinance can occur regardless of whether or not a permit is required for a regulated activity listed in this ordinance. 1.5 Definitions 1.Unless otherwise noted in this section, words and phrases contained in Minn. Stat. 342.01 and the rules promulgated pursuant to any of these acts, shall have the same meanings in this ordinance. 2.Cannabis Cultivation: A cannabis business licensed to grow cannabis plants within the approved amount of space from seed or immature plant to mature plant. harvest cannabis flower from mature plant, package and label immature plants and seedlings and cannabis flower for sale to other cannabis businesses, transport cannabis flower to a cannabis manufacturer located on the same premises, and perform other actions approved by the office. 3.Cannabis Retail Businesses: A retail location and the retail location(s) of a mezzobusinesses with a retail operations endorsement, microbusinesses with a retail operations endorsement, medical combination businesses operating a retail location, (and/excluding) lower-potency hemp edible retailers. Page 49 of 73 4. Cannabis Retailer: Any person, partnership, firm, corporation, or association, foreign or domestic, selling cannabis product to a consumer and not for the purpose of resale in any form. 5. Daycare: A location licensed with the Minnesota Department of Human Services to provide the care of a child in a residence outside the child's own home for gain or otherwise, on a regular basis, for any part of a 24-hour day. 6. Lower-potency Hemp Edible: As defined under Minn. Stat. 342.01 subd. 50. 7. Office of Cannabis Management: Minnesota Office of Cannabis Management, referred to as “OCM” in this ordinance. 8. Place of Public Accommodation: A business, accommodation, refreshment, entertainment, recreation, or transportation facility of any kind, whether licensed or not, whose goods, services, facilities, privileges, advantages or accommodations are extended, offered, sold, or otherwise made available to the public. 9. Preliminary License Approval: OCM pre-approval for a cannabis business license for applicants who qualify under Minn. Stat. 342.17. 10. Public Place: A public park or trail, public street or sidewalk; any enclosed, indoor area used by the general public, including, but not limited to, restaurants; bars; any other food or liquor establishment; hospitals; nursing homes; auditoriums; arenas; gyms; meeting rooms; common areas of rental apartment buildings, and other places of public accommodation. 11. Residential Treatment Facility: As defined under Minn. Stat. 245.462 subd. 23. 12. Retail Registration: An approved registration issued by the (insert local here) to a state- licensed cannabis retail business. 13. School: A public school as defined under Minn. Stat. 120A.05 or a nonpublic school that must meet the reporting requirements under Minn. Stat. 120A.24. 14. State License: An approved license issued by the State of Minnesota’s Office of Cannabis Management to a cannabis retail business. Section 2. Registration of Cannabis Businesses A city or town can delegate authority for registration to the County. A city or town can still adopt specific requirement regarding zoning, buffers, and use in public places, provided said requirements are not in conflict with an ordinance adopted under the delegated authority granted to the County. 2.1 Consent to registering of Cannabis Businesses No individual or entity may operate a state-licensed cannabis retail business within (insert local here ) without first registering with (insert local here). Any state-licensed cannabis retail business that sells to a customer or patient without valid retail registration shall incur a civil penalty of (up to $2,000) for each violation. Notwithstanding the foregoing provisions, the state shall not issue a license to any cannabis business to operate in Indian country, as defined in United States Code, title 18, section 1151, of a Minnesota Tribal government without the consent of the Tribal government. Page 50 of 73 2.2 Compliance Checks Prior to Retail Registration A jurisdiction can choose to conduct a preliminary compliance check prior to issuance of retail registration. Prior to issuance of a cannabis retail business registration, (insert local here) (shall/shall not) conduct a preliminary compliance check to ensure compliance with local ordinances. Pursuant to Minn. Stat. 342, within 30 days of receiving a copy of a state license application from OCM, (insert local here) shall certify on a form provided by OCM whether a proposed cannabis retail business complies with local zoning ordinances and, if applicable, whether the proposed business complies with the state fire code and building code. 2.3 Registration & Application Procedure 2.3.1 Fees. (insert local here) shall not charge an application fee. A registration fee, as established in (insert local here )’s fee schedule, shall be charged to applicants depending on the type of retail business license applied for. An initial retail registration fee shall not exceed $500 or half the amount of an initial state license fee under Minn. Stat. 342.11, whichever is less. The initial registration fee shall include the initial retail registration fee and the first annual renewal fee. Any renewal retail registration fee imposed by (insert local here) shall be charged at the time of the second renewal and each subsequent renewal thereafter. A renewal retail registration fee shall not exceed $1,000 or half the amount of a renewal state license fee under Minn. Stat. 342.11, whichever is less. A medical combination business operating an adult-use retail location may only be charged a single registration fee, not to exceed the lesser of a single retail registration fee, defined under this section, of the adult-use retail business. 2.3.2 Application Submittal. The (insert local here) shall issue a retail registration to a state-licensed cannabis retail business that adheres to the requirements of Minn. Stat. 342.22. (A)An applicant for a retail registration shall fill out an application form, as provided by the (insert local here). Said form shall include, but is not limited to: i.Full name of the property owner and applicant; ii.Address, email address, and telephone number of the applicant; iii.The address and parcel ID for the property which the retail registration is sought; iv.Certification that the applicant complies with the requirements of local ordinances established pursuant to Minn. Stat. 342.13. v.(Insert additional standards here) (B)The applicant shall include with the form: Page 51 of 73 i.the registration fee as required in [Section 2.3.1]; ii.a copy of a valid state license or written notice of OCM license preapproval; iii.(Insert additional standards here) (C)Once an application is considered complete, the (insert local government designee) shall inform the applicant as such, process the application fees, and forward the application to the (insert staff/department, or elected body that will approve or deny the request) for approval or denial. (D)The application fee shall be non-refundable once processed. 2.3.3 Application Approval (A)(Optional) A state-licensed cannabis retail business application shall not be approved if the cannabis retail business would exceed the maximum number of registered cannabis retail businesses permitted under Section 2.6. (B)A state-licensed cannabis retail business application shall not be approved or renewed if the applicant is unable to meet the requirements of this ordinance. (C)A state-licensed cannabis retail business application that meets the requirements of this ordinance shall be approved. 2.3.4 Annual Compliance Checks. The (insert local here) shall complete at minimum one compliance check per calendar year of every cannabis business to assess if the business meets age verification requirements, as required under [Minn. Stat. 342.22 Subd. 4(b) and Minn. Stat. 342.24] and this/these [chapter/section/ordinances]. The (insert local here ) shall conduct at minimum one unannounced age verification compliance check at least once per calendar year. Age verification compliance checks shall involve persons at least 17 years of age but under the age of 21 who, with the prior written consent of a parent or guardian if the person is under the age of 18, attempt to purchase adult-use cannabis flower, adult-use cannabis products, lower-potency hemp edibles, or hemp-derived consumer products under the direct supervision of a law enforcement officer or an employee of the local unit of government. Any failures under this section must be reported to the Office of Cannabis Management. 2.3.5 Location Change A jurisdiction may decide to treat location changes as a new registration, or alternatively treat a location change as allowable subject to compliance with the rest of the registration process. A state-licensed cannabis retail business shall be required to submit a new application for registration under Section 2.3.2 if it seeks to move to a new location still within the legal boundaries of (insert local here). Page 52 of 73 or If a state-licensed cannabis retail business seeks to move to a new location still within the legal boundaries of (insert local here), it shall notify (insert local here) of the proposed location change, and submit necessary information to meet all the criteria in this paragraph. 2.4 Renewal of Registration The (insert local here) shall renew an annual registration of a state-licensed cannabis retail business at the same time OCM renews the cannabis retail business’ license. A state-licensed cannabis retail business shall apply to renew registration on a form established by (insert local here). A cannabis retail registration issued under this ordinance shall not be transferred. 2.4.1 Renewal Fees. The (insert local here) may charge a renewal fee for the registration starting at the second renewal, as established in (insert local here)’s fee schedule. 2.4.2 Renewal Application. The application for renewal of a retail registration shall include, but is not limited to: • Items required under Section 2.3.2 of this Ordinance. • Insert additional items here 2.5 Suspension of Registration 2.5.1 When Suspension is Warranted. The (insert local here) may suspend a cannabis retail business’s registration if it violates the ordinance of (insert local here) or poses an immediate threat to the health or safety of the public. The (insert local here) shall immediately notify the cannabis retail business in writing the grounds for the suspension. 2.5.2 Notification to OCM. The (insert local here) shall immediately notify the OCM in writing the grounds for the suspension. OCM will provide (insert local here) and cannabis business retailer a response to the complaint within seven calendar days and perform any necessary inspections within 30 calendar days. 2.5.3 Length of Suspension. A jurisdiction can wait for a determination from the OCM before reinstating a registration. The suspension of a cannabis retail business registration may be for up to 30 calendar days, unless OCM suspends the license for a longer period. The business may not make sales to customers if their registration is suspended. Page 53 of 73 The (insert local here ) may reinstate a registration if it determines that the violations have been resolved. The (insert local here) shall reinstate a registration if OCM determines that the violation(s) have been resolved. 2.5.4 Civil Penalties. Subject to Minn. Stat. 342.22, subd. 5(e) the (insert local here) may impose a civil penalty, as specified in the (insert local here)’s Fee Schedule, for registration violations, not to exceed $2,000. 2.6 Limiting of Registrations A jurisdiction may choose to set a limit on the number of retail registrations within its boundaries. The jurisdiction may not however, limit the number of registrations to fewer than one per 12,500 residents. (Optional) The (insert local here) shall limit the number of cannabis retail businesses to no fewer than one registration for every 12,500 residents within (insert local legal boundaries here). (Optional) If (insert county here) has one active cannabis retail businesses registration for every 12,500 residents, the (insert local here) shall not be required to register additional state-licensed cannabis retail businesses. (Optional) The (insert local here) shall limit the number of cannabis retail businesses to (insert number <= minimum required). Section 3. Requirements for Cannabis Businesses State Statutes note that jurisdictions may “adopt reasonable restrictions on the time, place, and manner of the operation of a cannabis business.” A jurisdiction considering other siting requirements (such as a buffer between cannabis businesses, or a buffer from churches) should consider whether there is a basis to adopt such restrictions. 3.1 Minimum Buffer Requirements A jurisdiction can adopt buffer requirements that prohibit the operation of a cannabis business within a certain distance of schools, daycares, residential treatment facilities, or from an attraction within a public park that is regularly used by minors, including a playground or athletic field. Buffer requirements are optional. A jurisdiction cannot adopt larger buffer requirements than the requirements here in Section 3.1. A jurisdiction should use a measuring system consistent with the rest of its ordinances, e.g. from lot line or center point of lot. (Optional) The (insert local here) shall prohibit the operation of a cannabis business within [0-1,000] feet of a school. Page 54 of 73 (Optional) The (insert local here) shall prohibit the operation of a cannabis business within [0-500] feet of a day care. (Optional) The (insert local here) shall prohibit the operation of a cannabis business within [0-500] feet of a residential treatment facility. (Optional) The (insert local here) shall prohibit the operation of a cannabis business within [0-500] feet of an attraction within a public park that is regularly used by minors, including a playground or athletic field. (Optional) The (insert local here) shall prohibit the operation of a cannabis retail business within [X] feet of another cannabis retail business. Pursuant to Minn. Stat. 462.357 subd. 1e, nothing in Section 3.1 shall prohibit an active cannabis business or a cannabis business seeking registration from continuing operation at the same site if a (school/daycare/residential treatment facility/attraction within a public park that is regularly used by minors) moves within the minimum buffer zone. 3.2 Zoning and Land Use For jurisdictions with zoning, said jurisdiction can limit what zone(s) Cannabis businesses can operate in. As with other uses in a Zoning Ordinance, a jurisdiction can also determine if such use requires a Conditional or Interim Use permit. A jurisdiction cannot outright prohibit a cannabis business. A jurisdiction should amend their Zoning Ordinance and list what zone(s) Cannabis businesses are permitted in, and whether they are permitted, conditional, or interim uses. While each locality conducts its zoning differently, a few themes have emerged across the country. For example, cannabis manufacturing facilities are often placed in industrial zones, while cannabis retailers are typically found in commercial/retail zones. Cannabis retail facilities align with general retail establishments and are prohibited from allowing consumption or use onsite and are also required to have plans to prevent the visibility of cannabis and hemp-derived products to individuals outside the retail location. Cannabis businesses should be zoned under existing zoning ordinances in accordance with the license type or endorsed activities held by the cannabis business. 3.2.1. Cultivation. Cannabis businesses licensed or endorsed for cultivation are permitted as a (type of use) in the following zoning districts: •(Insert zoning districts use is permitted in here) •(Insert zoning districts use is permitted in here) 3.2.1. Cannabis Manufacturer. Cannabis businesses licensed or endorsed for cannabis manufacturer are permitted as a (type of use) in the following zoning districts: •(Insert zoning districts use is permitted in here) •(Insert zoning districts use is permitted in here) Page 55 of 73 3.2.1. Hemp Manufacturer. Businesses licensed or endorsed for low-potency hemp edible manufacturers permitted as a (type of use) in the following zoning districts: • (Insert zoning districts use is permitted in here) • (Insert zoning districts use is permitted in here) 3.2.1. Wholesale. Cannabis businesses licensed or endorsed for wholesale are permitted as a (type of use) in the following zoning districts: • (Insert zoning districts use is permitted in here) • (Insert zoning districts use is permitted in here) 3.2.1. Cannabis Retail. Cannabis businesses licensed or endorsed for cannabis retail are permitted as a (type of use) in the following zoning districts: • (Insert zoning districts use is permitted in here) • (Insert zoning districts use is permitted in here) 3.2.1. Cannabis Transportation. Cannabis businesses licensed or endorsed for transportation are permitted as a (type of use) in the following zoning districts: • (Insert zoning districts use is permitted in here) • (Insert zoning districts use is permitted in here) 3.2.1. Cannabis Delivery. Cannabis businesses licensed or endorsed for delivery are permitted as a (type of use) in the following zoning districts: • (Insert zoning districts use is permitted in here) • (Insert zoning districts use is permitted in here) 3.3 Hours of Operation State law limits the retail sale of cannabis flower, cannabis products, lower-potency hemp edibles, or hemp-derived consumer products to the hours of: • Monday-Saturday: 8 a.m.-2 a.m. the following day • Sunday: 10 a.m.-2 a.m. A local jurisdiction may adopt an ordinance prohibiting sales for any period between the hours of 8 a.m.-10 a.m. and between 9 p.m.-2 a.m. the following day, seven days a week. (Optional) Cannabis businesses are limited to retail sale of cannabis, cannabis flower, cannabis products, lower-potency hemp edibles, or hemp-derived consumer products between the hours of (insert time here) and (insert time here). Page 56 of 73 3.4 (Optional) Advertising Cannabis businesses are permitted to erect up to two fixed signs on the exterior of the building or property of the business, unless otherwise limited by (insert local here)’s sign ordinances. Section 4. Temporary Cannabis Events Any individual or business seeking to obtain a cannabis event license must provide OCM information about the time, location, layout, number of business participants, and hours of operation. A cannabis event organizer must receive local approval, including obtaining any necessary permits or licenses issued by a local unit of government before holding a cannabis event. 4.1 License or Permit Required for Temporary Cannabis Events 4.1.1 License Required. A cannabis event organizer license entitles the license holder to organize a temporary cannabis event lasting no more than four days. A jurisdiction should determine what type of approval is consistent with their existing ordinances for events. A license or permit is required to be issued and approved by (insert local here) prior to holding a Temporary Cannabis Event. 4.1.2 Registration & Application Procedure A registration fee, as established in (insert local here)’s fee schedule, shall be charged to applicants for Temporary Cannabis Events. 4.1.3 Application Submittal & Review. The (insert local here) shall require an application for Temporary Cannabis Events. (A) An applicant for a retail registration shall fill out an application form, as provided by the (insert local here). Said form shall include, but is not limited to: i. Full name of the property owner and applicant; ii. Address, email address, and telephone number of the applicant; iii. (Insert additional standards here) (B) The applicant shall include with the form: i. the application fee as required in (Section 4.1.2); ii. a copy of the OCM cannabis event license application, submitted pursuant to 342.39 subd. 2. The application shall be submitted to the (insert local authority), or other designee for review. If the designee determines that a submitted application is incomplete, they shall return the application to the applicant with the notice of deficiencies. (C) Once an application is considered complete, the designee shall inform the applicant as such, process the application fees, and forward the application to the (insert staff/department, or elected body that will approve or deny the request) for approval or denial. Page 57 of 73 (D) The application fee shall be non-refundable once processed. (E) The application for a license for a Temporary Cannabis Event shall meet the following standards: A jurisdiction may establish standards for Temporary cannabis events which the event organizer must meet, including restricting or prohibiting any on-site consumption. If there are public health, safety, or welfare concerns associated with a proposed cannabis event, a jurisdiction would presumably be authorized to deny approval of that event. • Insert standards here (G) A request for a Temporary Cannabis Event that meets the requirements of this Section shall be approved. (H) A request for a Temporary Cannabis Event that does not meet the requirements of this Section shall be denied. The (insert city/town/county) shall notify the applicant of the standards not met and basis for denial. (Optional) Temporary cannabis events shall only be held at (insert local place). (Optional) Temporary cannabis events shall only be held between the hours of (insert start time) and (insert stop time). Section 5. (Optional) Lower-Potency Hemp Edibles A jurisdiction can establish different standards or requirements regarding Low-Potency Edibles. A jurisdiction can consider including the following section and subsections in their cannabis ordinance. 5.1 Sale of Low-Potency Hemp Edibles The sale of Low-Potency Edibles is permitted, subject to the conditions within this Section. 5.2 Zoning Districts If sales are permitted, a jurisdiction can limit what zone(s) the sales of Low-Potency Edibles can take place in. A jurisdiction can also determine if such activity requires a Conditional or Interim Use permit. Low-Potency Edibles businesses are permitted as a (type of use) in the following zoning districts: • (Insert zoning districts use is permitted in here) • (Insert zoning districts use is permitted in here) 5.3 (Optional) Additional Standards 5.3.1 Sales within Municipal Liquor Store. A jurisdiction that already operates a Municipal Liquor Store may sell Low-Potency Edibles within the same store. Page 58 of 73 The sale of Low-Potency Edibles is permitted in a Municipal Liquor Store. 5.3.2 Age Requirements. A jurisdiction is able to restrict the sale of Low-Potency Edibles to locations such as bars. The sale of Low-Potency Edibles is permitted only in places that admit persons 21 years of age or older. 5.3.3 Beverages. The sale of Low-Potency Hemp Beverages is permitted in places that meet requirements of this Section. 5.3.4 Storage of Product. A jurisdiction is able to set requirements on storage and sales of Low-Potency Edibles. Low-Potency Edibles shall be sold behind a counter, and stored in a locked case. Section 6. (Optional) Local Government as a Cannabis Retailer (insert local here) may establish, own, and operate one municipal cannabis retail business subject to the restrictions in this chapter. The municipal cannabis retail store shall not be included in any limitation of the number of registered cannabis retail businesses under Section 2.6. (insert local here) shall be subject to all same rental license requirements and procedures applicable to all other applicants. Section 7. Use in Public Places No person shall use cannabis flower, cannabis products, lower-potency hemp edibles, or hemp-derived consumer products in a public place or a place of public accommodation unless the premises is an establishment or an event licensed to permit on-site consumption of adult-use. Page 59 of 73 Appendix B: Retail Registration Form and Checklist Page 60 of 73 Retail Registration Form and Checklist Local Unit of Government: Business Name: Business Address: Minnesota Cannabis Business License Number: Registration Period Initial Renewal Cannabis Microbusiness ($0.00) Cannabis Microbusiness ($1000.00) Cannabis Mezzobusiness ($500.00) Cannabis Mezzobusiness ($1000.00) Cannabis Retailer ($500.00) Cannabis Retailer ($1000.00) Is Applicant Current on All Property Tax and Assessments at Retail Location: No Yes Preliminary Local Ordinance Compliance: Pass Fail Notes: The above named applicant having paid the appropriate fees, being current on all applicable tax obligations, and having passed a preliminary compliance review, is authorized to engage in retail cannabis sales in the above named jurisdiction. Approved By: Title: Date: Page 61 of 73 Appendix C: Hemp Flower and Hemp- Derived Cannabinoid Product Checklist Page 62 of 73 Hemp Flower and Hemp-Derived Cannabinoid Product Checklist 1 Office of Cannabis Management Department of Health Hemp Flower and Hemp-Derived Cannabinoid Product Checklist Minnesota Statute 18K.02, Definitions Minnesota Statute 152.01, Subdivision 9 Minnesota Statute 151.72, Sale of Certain Cannabinoid Products Minnesota Statute 152.0264, Cannabis Sale Crimes Minnesota Statute 342.09, Personal Adult Use of Cannabis Question Yes No Comments Additional Information Business License and Registration Compliance Is the business registered with the Minnesota Department of Health? All businesses selling hemp-derived cannabinoid products must be registered. See Hemp-Derived Cannabinoid Products (www.health.state.mn.us/people/cannabis/edibles/index.html) If the business offers on-site consumption, do they have a liquor license? Local authorities issue on-site consumption licenses. These are required for all businesses permitting on-site consumption of THC. Product Compliance – All Products Does the business ensure that all sales are made to persons 21 years old or older? Only persons 21 years of age or older may purchase hemp- derived cannabinoid products, with the exception of topicals. These products may be sold to anyone. Does the business have all edible cannabinoid products, except beverages, behind the counter or in a locked cabinet? Businesses must ensure all edible cannabinoid products are secure and inaccessible to customers. Page 63 of 73 Hemp Flower and Hemp-Derived Cannabinoid Product Checklist 2 Question Yes No Comments Additional Information Only delta-8 and delta-9 are allowed for human consumption. Does the business sell edibles or beverages with any other intoxicating cannabinoids? MDH has identified products containing many different intoxicating cannabinoids, such as HHC, THC-O, THC-P, PHC, delta-10, delta-11, delta-8p, delta-9p, etc. The product must contain only delta-8 and/or delta-9. Does the business sell any edible products that are similar to a product marketed to or consumed by children? Edible products that appear similar to candy or snacks marketed toward or consumed by children are not allowed. Does the label on the edible or beverage state “Keep out of reach of children”? All products must include the warning label “Keep out of reach of children.” Is the manufacturer’s name, address, website, and contact phone number included on the label or provided through a QR code? If not, the product is not in compliance. Does the QR code on the product bring the user to a Certificate of Analysis on the website, which includes the name of the independent testing laboratory, cannabinoid profile, and product batch number? All products must be tested by batch in an independent, accredited laboratory. The results must include the cannabinoid profile. Does the label on the product indicate the cannabinoids by serving and in total? The label must indicate the potency by individual serving as well as in total. Page 64 of 73 Hemp Flower and Hemp-Derived Cannabinoid Product Checklist 3 Question Yes No Comments Additional Information Does the label on the product make any claim the product offers any kind of health benefit? Health claims are not permitted on hemp or cannabis products unless approved by the FDA. At this time, there is not an approved statement. Does the label on the product state that the product does not claim to diagnose, treat, cure or prevent any disease? The manufacturer cannot claim the product will provide any health benefit unless the product has been formally approved by the FDA. Does the business sell CBD (or other forms of cannabidiol) in the form of a softgel, tablet, or tincture? Non-intoxicating cannabinoids may only be sold in the form of an edible, beverage, or topical. Therefore, softgels and tablets cannot be sold. Tinctures must be labeled as either an edible or beverage and comply with the edible or beverage requirements. Product Compliance – Edibles Does the edible product contain more than 5 mg delta-8 and/or delta-9 per serving? Edibles may not exceed 5 mg delta-8 and/or delta-9 per serving. Does the edible product package/container contain more than 50 mg total THC (delta-8 and/or delta-9)? Edibles may not exceed 50 mg total delta-8 or delta-9 per package. The edible cannot contain any other form of THC or intoxicating cannabinoid. Are all the edible product’s servings clearly marked, wrapped, or scored on the product? Edible product servings must be clearly distinguished on the product. Bulk products that require the consumer to measure are not allowed. Page 65 of 73 Hemp Flower and Hemp-Derived Cannabinoid Product Checklist 4 Question Yes No Comments Additional Information Does the business sell any edible products in the shape of bears, worms, fruits, rings, ribbons? Edibles in shapes that appeal to children are not allowed. Is the edible product in a child- proof, tamper-evident, opaque container? All edibles must be in a container that is child-resistant and tamper evident. If the container is clear, the business must place the edible into an opaque bag at the point of sale. Clear bags are not allowed. Product Compliance - Beverages Does the beverage product contain more than 5 mg delta-8 or delta-9 per serving? Beverages may not exceed 5 mg delta-8 and/or delta-9 per serving. Does the beverage product contain more than 2 servings? Beverages cannot exceed two servings, regardless of the THC potency. Is the beverage product in an opaque container? If the beverage is in a clear container, the business must place the beverage in an opaque bag at the point of sale. Product Compliance – Smokables (non-flower) Does the business sell vapes, pre- rolls, dabs, or other smokable products which contain more than 0.3% THC? A product’s certificate of analysis will show the concentration of THC the product contains. The certificate typically is found through the QR code on the product package. In MDH’s experience, most vapes contain 50% - 90%+ THC. Pre-rolls may consist of raw hemp flower. These products are not regulated by 151.72. However, if a pre-roll is labeled as “infused” or “coated” have additional cannabinoids applied to the material, of which the product typically exceeds the 0.3% THC limit. Page 66 of 73 Hemp Flower and Hemp-Derived Cannabinoid Product Checklist 5 Question Yes No Comments Additional Information Does the business sell vapes, pre- rolls, dabs, or other smokeable products that contain other intoxicating cannabinoids, such as HHC? MN Statutes do not allow any cannabinoid, other than delta-8 or delta-9, to be sold if the cannabinoid is intended to alter the structure or function of the body. HHC is a cannabinoid known to have potency greater than THC. Does the business sell vapes, pre- rolls, dabs, or other smokable products which contain CBD? Non-intoxicating cannabinoids cannot be smoked, vaped, or inhaled. Product Compliance – Flower Does the business sell raw hemp flower? Raw hemp flower must contain 0.3% or less of delta-9 on a dry weight basis. Products exceeding 0.3% delta-9 dry weight are marijuana, and are illegal for sale. THC-A is the non psychoactive precursor to delta-9. Once heated THC-A converts to delta-9. In that process some amount of THC-A is lost. To determine whether, once heated, the hemp flower will exceed the allowable 0.3% of delta-9, one can use a decarboxylation formula which takes into account the conversion of THC-A into delta-9. That formula is as follows: Total THC = (0.877 X THC-A) + d-9 THC) Raw flower must include a certificate of analysis to show testing below 0.3% delta-9. • A lack of a certificate of analysis would constitute an illegal sale. Page 67 of 73 Hemp Flower and Hemp-Derived Cannabinoid Product Checklist 6 Question Yes No Comments Additional Information • A certificate of analysis showing that under the decarboxylation formula that delta-9 would exceed the 0.3% threshold would also indicate the flower is cannabis and not hemp and therefore being sold illegally. Product Compliance – On-Site Consumption If the business offers on-site consumption, do they serve the edible or beverage in its original packaging? The business may not pour out or remove an edible from its original packaging. If the business offers on-site consumption, do they mix a cannabis-infused beverage with alcohol? The business may not mix cannabis-infused products with alcohol. If the business offers on-site consumption, do they permit customers to remove from the premises products which have been removed from their original packaging? Products which have been removed from their original packaging cannot be removed from the premises by the customer. NOTE: If a person suspects that a hemp-derived cannabinoid product is being sold in violation of Minnesota law, they can use the complaint form at Submitting Hemp-Derived Cannabinoid Product Complaints (www.health.state.mn.us/people/cannabis/edibles/complaints.html). Page 68 of 73 Appendix D: Enforcement Notice from the Office of Cannabis Management Page 69 of 73 Enforcement Notice 1 Enforcement Notice from the Office of Cannabis Management Dear Registered Hemp Derived Cannabinoid Business: The Office of Cannabis Management (OCM), established in 2023, is charged with developing and implementing the operational and regulatory systems to oversee the cannabis industry in Minnesota as provided in Minnesota Statutes Chapter 342. When Minnesota legalized the sale of adult-use of cannabis flower, cannabis products, and lower-potency hemp edibles/ hemp-derived consumer products, the Minnesota Legislature included statutory provisions, Minnesota Statutes, chapter 152.0264, making the sale of cannabis illegal until a business is licensed by OCM. The Office of Cannabis Management has not yet issued licenses for the cultivation, manufacture, wholesale, transportation or retail sale of cannabis, therefore any retail sales of cannabis products, including cannabis flower, are illegal. The Office of Cannabis Management has received complaints of retailers selling cannabis flower under the label of hemp flower. Under an agreement between The Minnesota Department of Health (MDH) and OCM, inspectors from MDH will begin to examine any flower products being sold during their regular inspections to determine whether they are indeed hemp flower or cannabis flower. In distinguishing between hemp and cannabis flower, OCM, consistent with federal rules and regulations related to hemp under 7 CFR 990.1, will consider the total concentration of THC post- decarboxylation, which is the process by which THC-A is converted into Delta-9 to produce an intoxicating effect. The examination of raw flower products will include reviewing the certificate of analysis for compliance in several areas, including: Compliance with the requirement that raw flower listed for sale includes a Certificate of Analysis (COA). Products for sale without a COA will constitute an illegal sale. A COA that affirms concentrations of 0.3% or less of Delta-9 on a dry weight basis. Products exceeding 0.3% Delta-9 dry weight are considered marijuana and are therefore illegal to sell. A COA that confirms that the total levels of Delta-9 and THC-A after the decarboxylation process do not exceed 0.3%. A COA that indicates the raw flower will exceed 0.3 percent Delta-9 post-decarboxylation, or a subsequent test conducted by an independent laboratory utilized by OCM that confirms Delta-9 in excess of 0.3 percent will be considered illegal. Minnesota Statutes, Chapter 342 governs Minnesota’s cannabis market, and empowers OCM to ensure regulatory compliance. Minnesota Statutes, chapter 342.09, subdivision 4 prohibits the retail sale of cannabis flower and cannabis products “without a license issued under this chapter that authorizes the sale.” Page 70 of 73 Enforcement Notice 2 To date, the Office of Cannabis Management has not issued any cannabis licenses, applications for licenses are expected to be available in the first half of 2025. As such, selling cannabis is a clear violation of law. Be aware that under Minnesota Statutes, 342.09, subdivision 6, OCM may assess fines in excess of a $1 million for violations of this law. Likewise, under Minnesota Statutes, chapter 342.19, OCM is empowered to embargo any product that it has “probable cause to believe . . . is being distributed in violation of this chapter or rules adopted under this chapter[.]” Furthermore, violations of law may be considered in future licensing decisions made by OCM. As inspectors enter the field, we encourage you to review the products you are currently selling to ensure they fall within the thresholds outlined above. If you have any questions related to the products you are selling, please send an email to cannabis.info@state.mn.us. Thank you for your attention to this matter. Charlene Briner Interim Director Office of Cannabis Management Page 71 of 73 Appendix E: Notice to Unlawful Cannabis Sellers Page 72 of 73 Notice to Unlawful Cannabis Sellers This notice is to inform you that your current course of action may run afoul of Minnesota law, and continuing this course of action may result in civil actions and potential criminal prosecution. To avoid such outcomes, you should immediately cease and desist any plans to engage in the unlicensed sale of cannabis and cannabis products. Minnesota Statutes, Chapter 342 (www.revisor.mn.gov/statutes/cite/342) governs Minnesota’s cannabis market, and empowers OCM to ensure regulatory compliance. Minnesota Statutes, chapter 342.09, subdivision 4 (www.revisor.mn.gov/statutes/cite/342.09#stat.342.09.4) prohibits the retail sale of cannabis flower and cannabis products “without a license issued under this chapter that authorizes the sale.” To date the Office of Cannabis Management has not issued any retail, or other, cannabis licenses. As such, your plan to sell cannabis in a retail setting at this date would be in flagrant violation of the law. Be aware that under Minnesota Statutes, 342.09, subdivision 6 (www.revisor.mn.gov/statutes/cite/342.09#stat.342.09.6), OCM may assess fines in excess of a $1,000,000 for violations of this law. Likewise, under Minnesota Statutes, chapter 342.19 (www.revisor.mn.gov/statutes/cite/342.19), OCM is empowered to embargo any product that it has “probable cause to believe . . . is being distributed in violation of this chapter or rules adopted under this chapter[.]” It is believed that products attempted to be sold at your retail location might be distributed in violation of the law, and would therefore be subject to embargo by OCM. Under Minnesota Statutes, chapter 342.19, subd. 2 (www.revisor.mn.gov/statutes/cite/342.19#stat.342.19.2), once embargoed OCM “shall release the cannabis plant, cannabis flower, cannabis product, artificially derived cannabinoid, lower-potency hemp edible, or hemp-derived consumer product when this chapter and rules adopted under this chapter have been complied with or the item is found not to be in violation of this chapter or rules adopted under this chapter.” While Minnesota has legalized the sale of adult-use of cannabis flower, cannabis products, lower-potency hemp edibles, or hemp-derived consumer products, the legislature did add new statutory provisions, Minnesota Statutes, chapter 152.0264 (www.revisor.mn.gov/statutes/cite/152.0264), making illegal the unlawful sale of cannabis. As there are not yet any licenses issued by OCM for the cultivation, manufacture, wholesale, transportation, or retail of cannabis, any sales of cannabis products in excess of the limits in 152.0264 is illegal. If you are only planning to sell cannabinoid products that are derived from hemp, you should ensure that the sale of those products is consistent with Minnesota Statutes, chapter 151.72 (www.revisor.mn.gov/statutes/cite/151.72), including but not limited to the requirement that your business be registered with the Commissioner of Health, and that all products are in compliance with the relevant statutes. Finally, in addition to the state laws outlined above, please be aware that any retail location must be in compliance with local government ordinances and zoning requirements. OCM takes seriously its charge to enforce Minnesota Statutes, Chapter 342, and its responsibility to ensure a safe and legal cannabis market. In order to avoid the above-described actions, all attempts to open a cannabis retail dispensary in Minnesota without the appropriate license should be ceased. Page 73 of 73