Local municipalities pass “puzzling” provisional laws banning marijuana sales until state regulatory guidelines are approved.
With a new state law legalizing recreational adult-use cannabis set to go into effect on August 1, some Minnesota cities are implementing a somewhat defiant and curious approach to the statute passed by the state legislature this past May and signed into law by Governor Tim Walz (DFL).
According to numerous local and national media outlets, close to a dozen cities in Minnesota have enacted measures temporarily forbidding recreational marijuana dispensaries from opening in their jurisdictions. One of those municipalities is Rochester, whose City Council is considering adopting a retail sales ban.
If the Council does adopt the prohibition ordinance, it will last until January 2025. The reasoning behind the ban is to allegedly provide city officials time to determine the type of local control, if any, cities like Rochester want to exert over cannabis sales, according to City Clerk Kelly Geistler.
"We're really just trying to preserve the space to get our ordinance in order so that we can be in lockstep with the state when they kick off their function, which they don't have a prescribed date. But they have indicated that that's likely to be January 2025," Geistler said.
"We're really just trying to preserve the space to get our ordinance in order so that we can be in lockstep with the state when they kick off their function, which they don't have a prescribed date. But they have indicated that that's likely to be January 2025."
- Rochester City Clerk Kelly Geistler
The law, which goes into effect on August 1, will allow for the following:
- Minnesotans 21 and older can legally possess up to two ounces of cannabis in public and up to two pounds in their residences. Likewise, they can cultivate up to eight plants at home, four of which can be mature.
- Licenses for retail dispensaries to begin regulated sales will be issued in the next 12-18 months.
- Beginning March 1, 2025, current medical marijuana companies can receive new combination licenses allowing them to participate in the adult-use market.
- Individuals with certain cannabis misdemeanor offenses on their records will have them automatically expunged beginning in August. The Bureau of Criminal Apprehension will be in charge of identifying those people eligible for relief from the courts.
- Along with establishing a system of licensed marijuana businesses, counties and municipalities will be allowed to own and operate government dispensaries.
- A 10% gross receipts tax on cannabis sales will be applied in addition to the standard 6.875% state sales tax.
- 80% of that taxed revenue will go to the state's general fund, with the remaining 20% going to local governments.
- Local municipalities cannot prohibit cannabis businesses from operating in their areas. However, they will be empowered to set "reasonable" regulations concerning the time of operation and location.
- A new Office of Cannabis Management (OCM) is to be established. Its primary responsibilities will include issuing cannabis business licenses and regulating the market.
- The OCM will have a Division for Social Equity designated to promote social equity by ensuring diversity in licensing by scoring equity applicants higher.
What makes the actions of these select few cities so curious is that the bans have no real power behind them. In adopting the new law, Minnesota lawmakers took great care in heeding the lessons from other states' mistakes, most notably concerning the ability of local municipalities to ban retail dispensaries within their jurisdictions.
The effect of those local control laws in other states led to so-called cannabis deserts, which resulted in consumers having little or no access to legal marijuana. To prevent that type of scenario in Minnesota, lawmakers included a provision in the new law barring cities and other local municipalities from prohibiting cannabis companies from operating in their areas.
Cities can establish "reasonable" regulations such as hours of operation. In addition, the legalization measure also grants local governments some control over marijuana businesses that choose to locate within their jurisdictions, including limiting the number of dispensaries that can operate within a town's city limits to one retailer per every 12,500 residents (with a minimum of one retail outlet).
Advocates for the new law, like Jason Tarasek, an attorney at the cannabis law practice Vicente LLP, applaud the inclusion of this provision. By learning from the failed practices in other states, he believes Minnesota's cannabis industry will be able to benefit quickly and safely from a more soundly constructed statute.
"By precluding local governments from opting out, yet giving municipalities (the) power to regulate the time, place and manner of the operations of cannabis businesses, Minnesota is much more likely to put the illicit market out of business in every corner of the state," he added.
"By precluding local governments from opting out, yet giving municipalities (the) power to regulate the time, place and manner of the operations of cannabis businesses, Minnesota is much more likely to put the illicit market out of business in every corner of the state."
- Jason Tarasek, an attorney at the cannabis law practice Vicente LLP
For many city leaders, the real issue seems to center around losing control concerning the legal sale of marijuana within their local fiefdoms. Until the Office of Cannabis Management (OCM) establishes official guidelines and begins accepting applications for adult-use cannabis retailers around a target date of May 2024, local officials have no real authority to do anything regarding potential retail businesses in their areas of influence and enforcement.
In the meantime, it seems that a handful of Minnesota cities want to pass phantom bans on cannabis businesses that currently do not exist under a law that prohibits explicitly banning those companies once they do come into existence sometime in the not-too-distant future. The adage, "Don't worry about things that haven't happened yet." comes to mind when pondering this latest set of head-scratching moves by a few obviously frustrated small-town politicians seeking attention and votes.
