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REQUEST FOR COUNCIL ACTION Date: 7/8/2024 Item No.: 7.a. Department Approval City Manager Approval Item Description: Consider an Interim Ordinance authorizing a study and imposing a moratorium on the operation of cannabis businesses. 1 2 Background 3 In 2023, the Minnesota Legislature enacted H.F. No. 100 (the "Act") related to the 4 legalization of cannabis. The Act establishes the Office of Cannabis Management ("OCM") 5 and allows local units of government certain authority to regulate cannabis businesses, 6 within certain limitations. The Act requires the OCM to establish additional rules and 7 regulations and to create a model ordinance informing local units of government on any 8 decisions related to the regulation of cannabis businesses within individual cities. The Act 9 also allows cities to conduct their own study on the operation of cannabis businesses, the 10 results of which would inform local regulations to be put in place on or before the effective 11 date of January 1, 2025 of the statewide legalization. To ensure appropriate regulations are 12 in place prior to a request to establish a cannabis business within the City, an interim 13 ordinance must be adopted, imposing a moratorium on the operation of cannabis 14 businesses. The City Attorney has drafted the interim ordinance, which is provided as 15 Attachment 1. 16 17 Many cities have already adopted interim ordinances, establishing moratoriums. A 18 moratorium was not initially sought by City staff given the understanding that licenses 19 would not be made available from the OCM until January 1, 2025, the date by which 20 cannabis could be sold legally, giving the City enough time to enact regulations following 21 release of a model ordinance from OCM. However, during the 2024 legislative session, the 22 Minnesota Legislature enacted H.F. No. 4757, which allows the OCM to begin accepting 23 applications from certain applicants for cultivation licenses on July 24, 2024, with the intent 24 of being able to provide a product to sell on January 1, 2025. Given the delay of the model 25 ordinance from OCM, and it not being possible to complete an ordinance adoption process 26 before July 24, 2024, City staff is requesting the Council enact a moratorium now to provide 27 the City with adequate time to effectively amend our ordinances to not only be prepared for 28 the January 1, 2025, effective date for the legalized sale of cannabis, but to also protect the 29 City in the event the OCM receives a request for an early issuance cultivation license in the 30 City. 31 32 Policy Objectives 33 Zoning regulations are enacted to govern the use of all land and structures in the City, 34 unless such regulation is specifically preempted by State of Federal statutes or regulations. 35 More specifically, the intent and purpose of such regulations are: To protect and promote Page 1 of 2 Qbhf!4!pg!88