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AGENDA ITEM - 3B '!Tt -1`iFQEN_ HILLS MEMORANDUM DATE: September 23, 2024 TO: Honorable Mayor and City Councilmembers Jessica Jagoe, Interim City Administrator FROM: Julie Hanson, Assistant to the City Administrator/City Clerk SUBJECT: Adult Use Cannabis Moratorium Update Budgeted Amount: Actual Amount: N/A Council Should Consider N/A Funding Source: N/A Providing preliminary direction regarding regulation of adult use cannabis businesses in the city. Background In 2023, Chapter 342 of Minnesota law was established which legalized adult use cannabis. That also resulted in the creation of the Office of Cannabis Management (OCM), the State agency that regulates cannabis use and businesses in Minnesota. It was anticipated that retail businesses were expected to begin in the first quarter of 2025. In order to afford the City ample time to monitor the guidance and changes that have been occurring regularly since 2023, and continue to occur, the City Council adopted interim Ordinance 2023-010 on August 28, 2023 which prohibited the operation of cannabis businesses in the city (see Attachment A). This moratorium is in effect until January 1, 2025 or until such time the City adopts official controls, whichever occurs first. Per State law, cities are required to issue a retail registration to a cannabis retailer and/or any cannabis business seeking a retail endorsement (including cannabis microbusinesses, cannabis mezzobusinesses, medical cannabis combination businesses, as well as lower -potency hemp retailer businesses). All cannabis businesses are required to comply with local zoning ordinances. Upon receipt of an application for a license, the OCM will reach out to local governments to certify zoning compliance during their application process. Following the issuance of a license by the OCM, the business would then apply for a registration with the city. Page 1 of 2