Senate Cannabis Bill Adds Local Zoning Authority

The amendment requires that cannabis businesses receive a land use compatibility statement from local governments and allow local limits on cannabis retailers.

The adult-use cannabis bill, SF 73 (Rep. Lindsey Port, DFL-Burnsville), continues to move throughout the legislative process. The bill was revised in the Senate State and Local Government and Veterans Committee with a significant amendment to provide local registrations for certain cannabis businesses and local zoning authority.

The bill was heard in the Senate Judiciary and Public Safety Committee on March 17, where the League submitted a letter as testimony (pdf). The bill was re-referred to the Senate Rules and Administration Committee.

Its companion, HF 100, (Rep. Zack Stephenson, DFL-Coon Rapids), passed out of the House Transportation Finance and Policy Committee on March 14 and was re-referred back to the House Commerce Finance and Policy Committee.

While HF 100 was amended in a previous committee to add the local registration process, there are significant differences between the House and Senate versions of the bill. The bills are anticipated to move through the remaining committee stops and then to a conference committee.

Hearing of the bill

The hearing of the SF 73 pertained to a delete-everything amendment for Article I of the bill, making several changes to various cannabis business licenses authorized by the bill. The amendment creates a new license for a cannabis mezzobusiness to allow for vertical integration for certain-sized businesses. The amendment also adjusts the fee schedule to create an application fee, initial license fee, and renewal license fee for each type of license created.

An additional amendment offered by Sen. Heather Gustafson (DFL-Vadnais Heights) provides local governments local zoning authority and allows local governments to put limits in place for the number of cannabis retailers in their jurisdiction. Another amendment to allow local governments to opt-out of the retail sales of adult-use cannabis was offered but not accepted.

The League provided testimony on the bill at the committee hearing and submitted a letter in partnership with Metro Cities and the Municipal Legislative Commission.

View a video of the Senate State and Local Government and Veterans Committee hearing

View the letter of testimony submitted by the League of Minnesota Cities, Metro Cities, and LMC (pdf)

Local registrations for cannabis businesses

The amendment added a local registration process for local governments for certain cannabis businesses, similar to the amendment adopted to the bill’s companion, HF 100, (Rep. Zack Stephenson, DFL-Coon Rapids), in previous committees.

The amendment requires that a cannabis microbusiness with retail operations endorsement, cannabis mezzobusiness with a retailer operations endorsement, cannabis retailer, medical cannabis retailer, or lower-potency hemp edible retailer register with the local government in which the retail establishment is located. The provision:

• Requires that a local unit of government shall issue a registration if the applicant meets various requirements, including being current on all property taxes and assessments at the retail location.
• Requires that a local unit of government conduct compliance checks of every cannabis business with a retail registration and authorizes the local unit of government to suspend or revoke a license if the local unit of government determines that a registered cannabis business is not operating in compliance.

A local unit of government would be able to impose a registration fee of up to half the amount of the applicant’s state license fee. Under the fee schedule in the amendment, local governments could charge the following fees:

• For a cannabis microbusiness: $0 for an initial registration and $1,000 for renewal registrations.
• For a cannabis mezzobusiness: $2,500 for an initial registration and $5,000 for renewal registrations.
• For a cannabis retailer: $1,250 for an initial registration and $2,500 for renewal registrations.
• For a medical cannabis retailer: $0 for both initial and renewal registrations.
• For a lower-potency hemp retailer: $125 for both initial and renewal registrations.

Read the full amendment, local registrations on page 54 (pdf)

Local zoning authority and limits on retailers

The amendment adopted for local zoning and local limits on cannabis retailers creates a requirement that a cannabis business obtain a land use compatibility statement from the city, town, or county that authorizes the land use.

This land use compatibility statement must demonstrate that the requested license is for a land use that is allowable within the given zoning designation where the land is located. The Office of Cannabis Management cannot issue a license if the land use compatibility statement indicates that the proposed land use is prohibited in the applicable zone or if the applicant has failed to meet the land use requirements of the jurisdiction.

Under this provision, a local government that receives a request for a land use compatibility statement must act on that request within 21 days of receipt.

Local limits on cannabis retailers

The amendment also authorizes that a local government unit that issues cannabis retailer registrations may, by ordinance, limit the number of licensed cannabis retailers as follows:

• In cities of the first class and counties, one license for every 10,000 population.
• In cities of the second class, at least four licenses plus one for every 5,000 over 45,000 population.
• In cities of the third class, at least two licenses.
• In cities of 5,000 to 10,000 population, at least one license.
• In cities under 5,000 population, at least one license.

This provision does not prohibit a local government from allowing licensed cannabis retailers in excess of these minimums.

Read the zoning and retailer limit amendment (pdf)

League work on the bill

League staff has consistently provided testimony on SF 73 and HF 100 as they continue to move throughout the committee process. The League has worked to communicate the need for both local control and local revenue sharing to recoup the additional costs that local governments and law enforcement will face from this new industry.

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