9.2 SR 01-06-2025The Elk River Vision
A welcoming community with revolutionary and spirited resourcefulness, exceptional service, and community
engagement that encourages and inspires prosperity
Request for Action
To
City Council
Item Number
9.2
Meeting Date
January 6, 2025
Prepared By
Tina Allard, City Clerk
Item Description
Ordinance 25-01: Cannabis and Hemp Retail
Business Registration
Resolution 25-02: Summary Publication
Reviewed by
Cal Portner
Tina Allard
Action Requested
Adopt, by motion, Ordinance 25-01 implementing cannabis and hemp retail business registration.
Adopt, by motion, Resolution 25-02 for summary publication of the ordinance.
Background/Discussion
The City Council reviewed the draft ordinance in the November 18, 2024, Regular Meeting Work Session.
Changes discussed at that meeting are updated in the attached draft ordinance. With the new state laws
legalizing cannabis and state licensing implementation in 2025, the city is required to issue retail registrations
for retailers and is limited in its scope of authority on what can be regulated. The following highlights are
noted:
Limit on Number of Retailers
The City Council decided to start slow and implement the minimum state law requirements of having at least
one retailer per 12,500 residents. The city will be required to have three retailers, not counting a municipal
operation.
Hours of Operation
The City Council concurred on implementing hours that are similar to off-sale liquor operations. Hours
outlined in the ordinance are 8:00 a.m. to 10:00 p.m., Monday - Saturday, and 11:00 a.m. to 6:00 p.m., on
Sundays.
Municipal Cannabis Operation
Language is added to the ordinance allowing the city to apply to be a cannabis retailer if so desired.
Buffer Requirements
The City Council concurred to follow similar buffering requirements that are outlined in our tobacco
ordinances. In this ordinance, a cannabis retailer would not be allowed within 500 feet of a school.
Temporary Cannabis Events
The City Council concurred on issuing permits for cannabis events, similar to how current temporary liquor
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events are permitted. An application and fee would be collected. The events would be required to meet the
500-foot buffer from schools and event hours would be limited between 10:00 a.m. and 10:00 p.m.
Other Items to Note:
▪ There will be two distinct processes for city approval: zoning verification and retail registration. During
each process, city staff will have 30 days to respond to the state on whether a business meets our
zoning and retail registration ordinances.
▪ The state requires the city to complete a minimum of one compliance check per year.
▪ The state will create an expedited complaint process during their rulemaking to respond to local
government complaints.
Financial Impact
Retails sales of cannabis products are subject to the state and local sales and use tax and a 10% gross receipts
tax. Cannabis gross tax receipts are allocated as follows:
▪ 20% to the local government cannabis aid account.
▪ 80% to the state general fund.
Mission/Policy/Goal
Meet changing needs - agile.
Attachments
1. Draft Ordinance
2. RES 25-02 Resolution Summary Publication ORD 25-01
3. Office of Cannabis Management Timeline
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Ordinance 25-01
An Ordinance Amending Chapter 26 Adding Article VI., Cannabis and Hemp Retail
Business Registration, of the City of Elk River, Minnesota, City Code
The City Council of the City of Elk River hereby ordains as follows:
SECTION 1. The City Code of Elk River, Minnesota, Chapter 26 is hereby amended to add Article VI as
follows:
ARTICLE VI. – CANNABIS AND HEMP RETAIL BUSINESS REGISTRATION
DIVISION 1. Generally
Sec. 26-210. Findings and Purpose.
The city makes the following legislative findings:
The purpose of this ordinance is to implement the provisions of Minnesota Statutes, chapter 342,
which authorizes the city to protect the public health, safety, welfare of residents by regulating cannabis
businesses and lower-potency hemp businesses.
Sec. 26-211. Authority & Jurisdiction.
The city 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 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.
Sec. 26-212. 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.
Sec. 26-213. Enforcement.
The city administrator or designee 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 a registration is required for a regulated activity listed in this
ordinance.
Sec. 26-214. Definitions.
Unless otherwise noted in this section, words and phrases contained in Minn. Stat. 342.01 and the rules
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promulgated pursuant to any of these acts, shall have the same meanings in this ordinance.
Cannabis Cultivation means 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.
Cannabis Retail Businesses means a retail location of a mezzobusinesses, microbusinesses, medical
combination businesses, or lower-potency hemp edible retailers.
Lower-potency Hemp Edible Retail Business means a lower-potency hemp edible retailer location.
Lower-potency Hemp Edible Retailer means any person, partnership, firm, corporation, or association,
foreign or domestic, selling lower-potency hemp edible product to a consumer and not for the purpose
of resale in any form.
Cannabis Retailer means 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.
Lower-potency Hemp Edible means as defined under Minn. Stat. 342.01 subd. 50.
Office of Cannabis Management means the Minnesota Office of Cannabis Management, referred to as
“OCM” in this ordinance.
Place of Public Accommodation means 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.
Preliminary License Approval means an OCM pre-approval for a cannabis business license for applicants
who qualify under Minn. Stat. 342.17.
Retail Registration means an approved registration issued by the city to a state- licensed cannabis retail
business.
School means 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.
State License means an approved license issued by the State of Minnesota’s Office of Cannabis
Management to a cannabis retail business.
Temporary Cannabis Event means a special event, held on public or private property, hosted by an
individual or an organization holding a Temporary Cannabis Event Organizer license issued under
Minn. Stat. 342.39
Temporary Cannabis Event Organizer means an individual or organization licensed by the State of
Minnesota to hold a Temporary Cannabis Event, as described in Minn. Stat. 342.39 and 342.40.
DIVISION 2. Registration.
Sec. 26-215. Registration of Cannabis Businesses.
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No individual or entity may operate a state-licensed cannabis retail business without first registering with
the city.
Sec. 26-216. Zoning Verification.
Pursuant to Minn. Stat. 342, within 30 days of receiving a copy of a state license application from
OCM, the city 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.
Sec. 26-217. Fees.
A registration fee shall be charged to applicants depending on the type of retail business license applied
for and is outlined in the city fee schedule. All fees are non-refundable.
Sec. 26-218. Application Procedure.
a) An applicant for a retail registration shall fill out an application form, as provided by the city.
Said form shall include, but is not limited to:
1) Full name of the property owner and applicant;
2) Address, email address, and telephone number of the applicant;
3) The address and parcel ID for the property which the retail registration is sought;
4)Certification that the applicant complies with the requirements of local ordinances
established pursuant to Minn. Stat. 342.13.
5) If property taxes, assessments, and utilities are current at the premises.
b) The applicant shall include with the form:
1) the registration fee;
2) a copy of a valid state license or written notice of OCM license preapproval.
c) Completed applications will be submitted to the city administrator or designee for approval or
denial.
Sec. 26-219. Application Approval.
a) An application shall not be approved if the cannabis retail business would exceed the maximum
number of registered cannabis retail businesses permitted under Section 22-225.
b) An application shall not be approved or renewed if the applicant is unable to meet the
requirements of this ordinance.
c) An application that meets the requirements of a) and b) above and the following requirements
shall be approved.
1) The applicant must have a valid license issued by the OCM that allows retails sales;
2) The location for the cannabis retail business must comply with applicable zoning
ordinances; and
3) All property taxes, assessments, and utilities for the location of the retail establishment
must be current.
d) Applications will be reviewed in the order they are received.
Sec. 26-220. Annual Compliance Checks.
The city 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 ordinance.
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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.
Any failures under this section must be reported to the Office of Cannabis Management.
Sec. 26-221. Location Change.
A state-licensed cannabis retail business is required to submit a new application for registration if it
seeks to move to a new location still within the city.
Sec. 26-222. Renewal of Registration.
Every registered cannabis retail business must apply for renewal annually, at the time its state license is
renewed. Renewals are processed according to the procedure in Section 26-218.
Sec. 26-223. Suspension of Registration
a) When Suspension is Warranted.
The city administrator or designee may suspend a cannabis retail business registration if it
violates ordinance or poses an immediate threat to the health or safety of the public. The city
shall immediately notify the cannabis retail business in writing the grounds for the suspension.
b)Notification to OCM.
The city administrator or designee shall immediately notify the OCM in writing the grounds for
the suspension. OCM will provide the city and cannabis business retailer a response to the
complaint within seven calendar days and perform any necessary inspections within 30 calendar
days.
c) Length of Suspension.
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.
The city may reinstate a registration if it determines that the violations have been resolved.
The city shall reinstate a registration if OCM determines that the violation(s) have been resolved.
DIVISION 3. Penalties
Sec. 26-224. Penalties.
Civil Penalty. Subject to Minn. Stat. 342.22, subd. 5(e) the city may impose a civil penalty, as specified in
the city’s Fee Schedule, for violations, not to exceed $2,000.
Criminal Penalty. 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.
The city is not precluded from other enforcement action, such as injunctive relief.
Sec. 26-225. Limiting of Registrations
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The city shall limit the number of cannabis retail businesses to no fewer than one registration for every
12,500 residents within the City of Elk River, excluding municipal cannabis retail store(s).
There is no limit on the number of low potency hemp retailers allowed in the city.
There is no limit on the number of medical cannabis combination businesses allowed in the city.
DIVISION 4. Requirements
Sec. 26-226. Requirements for Cannabis Businesses
a) Minimum Buffer Requirements
1) The city shall prohibit the operation of a cannabis business within 500 feet of a school as
measured from the property line to property line at the nearest point or from property line to
the nearest point of the leased premises if the retail business is located in a multi-tenant
facility.
2) 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 /attraction within a public park that is regularly used by minors)
moves within the minimum buffer zone.
b) Hours of Operation
1) Cannabis businesses are limited to retail sale of cannabis, cannabis flower, cannabis
products, lower-potency hemp edibles, or hemp-derived consumer products to between the
hours of 8:00 a.m. and 10:00 p.m. Monday - Saturday, and 11:00 a.m. – 6:00 p.m. on
Sunday.
DIVISION 5. Temporary Cannabis Events
Sec. 26- 227. License Required.
A temporary cannabis event permit issued by the city is required prior to holding a temporary cannabis
event.
Sec. 26-228. Application
a) An applicant shall fill out an application form, as provided by the city. The application shall
include, but is not limited to:
1) Full name of the property owner and the applicant;
2) Address, email address and telephone number of the applicant;
3) Letter from property owner authorizing the event on their property;
4) Site plan of event space, including location and number of access points;
5) Proposed capacity of event space;
6) Dates of proposed event;
7) Duration of event, including beginning and ending times;
8) Other information as required by the city based on the type or size of the event.
b) The applicant shall include with the application form:
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1) The application fee outlined in the city fee schedule. The application fee is non-refundable;
2) A copy of the OCM cannabis event license application, submitted pursuant to 342.39
subd.;
3) The application shall be submitted to the city administrator, or 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) The application for a license for a temporary cannabis event shall meet the following standards:
1) A temporary cannabis event shall provide a minimum buffer zone of 500 feet from a
school.
2) Event hours shall only occur between the hours of 10:00 a.m. and 10:00 p.m.
d) A request for a temporary cannabis event permit that does not meet the requirements of this
chapter shall be denied. The city shall notify the applicant of the standards not met and basis
for denial.
DIVISION 6. Municipal Operations
Sec. 26-229. Low Potency Edibles
The sale of low-potency edibles is permitted in a Municipal Liquor Store.
Sec. 26-230. Local Government as a Cannabis Retailer
The city may establish, own, and operate a municipal cannabis store subject to the restrictions in state
law.
The city shall be subject to all same license requirements and procedures applicable to all other
applicants.
SECTION 2. That this ordinance shall take effect upon adoption.
Passed and adopted by the City Council of the City of Elk River this 6th day of January, 2025.
______________________________
John J. Dietz, Mayor
ATTEST:
_______________________________
Tina Allard, City Clerk
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Councilmember _______________ introduced the following resolution and moved its
adoption:
Resolution 25-02
A Resolution of the City of Elk River Approving Notice of Summary
Publication of Ordinance #25-01 An Ordinance Regulating Cannabis and
Hemp Retail Business Registration of the City of Elk River, Minnesota, City
Code
WHEREAS,on January 6, 2025, the Elk River City Council adopted Ordinance 25-01
amending Chapter 26 to add Article VI., of the Elk River Code of Ordinances; and
WHEREAS,the texts of the amendment is cumbersome, and the expense of publication
of the complete ordinance is not justified; and
WHEREAS,Minnesota Statutes, Section 412.191, subd. 4, allows publication by title and
summary in the case of lengthy ordinances; and
WHEREAS,the summary of Ordinance 25-01 is as follows
The city code has been amended to regulate cannabis and hemp businesses in Elk River. A
new Article VI., in Chapter 26 is created to establish what the city is regulating, how local
review and registration of retail businesses will be handled and enforced; general
requirements in terms of how many retail businesses are allowed, hours of operation, and
temporary cannabis event permitting; and
WHEREAS, a copy of the full text of the ordinance is available for inspection by any
person at the office of the Elk River City Clerk, 13065 Orono Parkway, during regular
business hours.
NOW, THEREFORE, BE IT RESOLVED by the City Council, by at least four-fifths
vote, authorizes the publication of the title and summary of Ordinance 25-01.
The motion for adoption of the foregoing resolution was introduced by Councilmember
________ and duly seconded by Councilmember ______________, and upon vote being
taken thereon, the following voted in favor thereof:
and the following against:
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, whereupon said resolution was declared duly passed and
adopted.
The following members were present:
and the following absent:
Passed and adopted this 6th day of January 2025.
John J. Dietz, Mayor
ATTEST:
Tina Allard, City Clerk
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