[00:00:00] Nate Stanley: Yeah, so sales, um, there's two different ways that these businesses can be registered. They're either at the city level or they're at the county level. If the city takes registration, it will have more control over the process. You take an application in, you get a fee, you can restrict to a certain number of locations, you have to do enforcement, so there are staff resources involved. So that's the con. The pro is you have more control. If the county registers businesses, they take the applications in, they do the background checks, they do the enforcement, but the city very likely won't have nearly as much control in terms of the number of licenses granted in the community. So there's definitely a give and take with these. Staff's recommendation thus far has been, or thought has been, to have the county do the licensing simply because it would create a kind of a strain on staff resources to be able to register these businesses and do the background checks and things of that nature. So that's kind of where staff recommendation is right now, but of course, that's definitely something that can be discussed by the city council in terms of the direction you'd like to go. So if you are a city that registers retail operations, you can limit them, but you cannot limit them beyond one retail location per 12,500 residents. So in Lake Elmo, that means if you register, you have to allow at least two businesses. So we could have restrictions by ordinance on the number of them, their location, hours of operation, things like that, but let the county do the licensing. [00:01:30] Jeff Holtz: So yeah, you can restrict the location, hours of operation, like all the—most of the things you said here. And the only thing you couldn't restrict is the number of locations? [00:01:40] Nate Stanley: At this time, you know, we're working with the City Attorney to better understand that because it's a little confusing. But at this time, what I would tell you is the only thing we can't control is the number of registered retail locations if we give it to the county. If we register in-house, then we have the ability to control. [00:01:55] Jeff Holtz: But even if it went to the county, they—so they could have more than two licenses in Lake Elmo? [00:02:00] Nate Stanley: Yeah. So if the county—and if we're talking like maybe like I'll call it like a worst-case scenario, if you want to just bear with me on that, you know, for lack of a better term, let's say the city decides to have the county register businesses. The city would be looking—would still ensure that all businesses are compliant with its standards, which means that they're only in locations that you say they can be and with the standards that you say they have to have, but you could not limit the number. Functionally, how many businesses do you get when you only have a certain number of properties? I don't know that you get a ton, but I mean, that that's definitely part of the conversation. [00:02:35] Matt Hirn: Was there also something in that number of businesses that related to based on population? Let's say, uh, let's use Woodbury as an example. Let's say they had more than—they allowed more than the number per 12,500 and that used a certain value within the county. Are some cities able to say, well, they have enough to cover our population too, so we don't need to allow any? [00:02:55] Nate Stanley: Right, yeah. No, that's a great question. And I'm actually following up on that very question with the City Attorney. My understanding up until now has been if we register in-house, then we have to do at least two businesses. Okay. If we allow the county to register, they might have some type of system and determination of how many they want to register county-wide that would include Lake Elmo's population and whatever other cities that are, you know, deferring to the county and registration. I also think that if Woodbury in this case registers its own businesses—and I think they are—their population of 80,000 gets removed from that total pool of people in the county. So I think we need to understand that a little bit better, and we're certainly working on that now. I think tonight, if you would be able to discuss and maybe provide some preliminary feedback on the direction and what questions you have about registration or not, really that would be helpful to staff so we can get these things addressed. [00:03:50] Nick Dragisich: So if we are the agents for registration, we can charge a fee to cover our cost up to the amount that's allowed by statute? [00:04:00] Nate Stanley: Up to—okay, I don't know what it is off the top—yep. [00:04:05] Nick Dragisich: And when we're talking a business, so one for 12,500, is that one of any type of the business? Cannabis businesses? Just a retail business? [00:04:15] Nate Stanley: Just a retail business. So it could be a retailer, cannabis retailer. It could be a meso-business with the retail end. Retail sales are those. [00:04:25] Nick Dragisich: But what about the other types of businesses? [00:04:28] Nate Stanley: You cannot limit them. You can only limit them through your zoning. [00:04:32] Jeff Holtz: All right. So what is the amount in statute for the—you can charge for the regulation function? Do you know what it is? [00:04:40] Nate Stanley: We're looking at something on the order of magnitude of like a few hundred dollars. So the fees are not exorbitant, and I think the statute—there was intent behind that. I think it's probably similar to the cost that you incur by staff and resources. [00:04:55] Jeff Holtz: Yep. I still—so if you incurred more costs, you couldn't collect above the limit? [00:05:00] Nate Stanley: You know, I think there might be ability for cities to, if they've shown how much it takes to administer this—yeah, there may be a process to charge more than the state statute, but there are thresholds or limits basically put in the statute. And again, we're talking about a relatively low sum for a business. [00:05:20] Nick Kragness: Just a question about how the cannabis businesses relate to liquor businesses. Yeah, I was trying to find something in the documentation because I thought at some—at one point in the process you weren't allowed to have liquor and cannabis products. But is that the case now? Or if our liquor store in town here wants to now sell cannabis, wants to be a retailer, is that allowed? Or a restaurant or bar that wants to be a—I don't know what was the name, like the micro-brewery—where you can use it on site. Are those allowable, and do we need to consider or factor that into our ordinance at all? [00:06:05] Nate Stanley: Those are a lot of good questions. I guess I would start with: can we combine a liquor and a THC business? I am not aware of anything in the statute with cannabis that would limit that, but I don't know if Julie or anyone else is knowledgeable about any other restrictions for liquor licenses. [00:06:25] Julie Johnson: I'm not aware of anything. It might roll into the security that's required. [00:06:30] Nate Stanley: Yeah, and so that's a good point. So statute is going to establish basically minimum standards as well for the internal operation. And so I wonder if in an instance where in like the same building, like a liquor store and a cannabis—I wonder if they don't get cordoned off somehow and that's how it's allowed. But in the draft ordinance, we don't have any restrictions on that, although I think we might be able to do something like that if the City Council were to do that. [00:06:55] Nick Kragness: Yeah, I guess I'm not—I'm not saying one way or the other that we should have a restriction on that, but I mean, I think it's just a factor in this, a question that may come up. And I don't know that any existing businesses are interested in pursuing that, but if they were—I mean, some of those are like our Village area where we have restaurants and liquor store—and again, does that need to be factored into our ordinance at all? And are we okay if it's not? If we don't allow it there? [00:07:25] Nate Stanley: I guess one question I didn't address was the like food and micro-business model. I don't think that's limited in statute. I think you can do that as long as you have a license for both businesses, and I think you do need a license through the state for a restaurant. Okay. [00:07:40] Nate Stanley: All right. All right, I'm going to keep things moving here unless there's more questions. Feel free to jump in if there are. So we were talking a little bit about these performance standards. I think I ended on this registration slide. So just to make sure we've talked through this one more: cities with a municipal store—the statute allows for a municipal sale model. I'm not sure that Lake Elmo has any interest in that, but that is something that is allowed in statute. The city cannot limit the registration of low-potency hemp retail uses. That is important. It's not a cannabis retailer; it's a separate business. [00:08:15] Nick Dragisich: Can you put that in the same category relationship to distance restrictions and things of that nature? [00:08:22] Nate Stanley: I don't think that they are subject to the buffer standards. [00:08:25] Nick Dragisich: Okay. Yep. And those businesses have already been in operation in a lot of areas that don't have that buffer, so... [00:08:32] Nate Stanley: Right. In other communities, it's definitely going to be an issue. All right. Just to make sure that we've talked through these registration items again. So OCM is that exclusive licensing entity; they issue the licenses, but the city can register if it chooses. So really, the—we've kind of talked about the pros and cons here. The main question is: should the city undertake registration or look to the county? So the recommendations from staff are: number one, to add definitions specific to these cannabis businesses and hemp businesses and their operations, and those things are included in the draft ordinance. Also, we would like to determine where those uses should be permitted and how—really looking at CUPs as the primary way that these businesses get approved. That gives us the ability to look at them closely. And lastly, we need to determine those performance standards, and the draft zoning ordinance in front of you does those things and, of course, can be modified to kind of suit how the city would like to regulate. Specific to the ordinance, it would need to be modified to outline a registration process if that was the direction the city wanted to go, or we would create a separate ordinance with that process in it. We will need to establish fees related to registration if we choose to do that and also be careful about making sure we cross-reference the standards in the zoning. [00:09:55] Nate Stanley: So before we go into these discussion questions, I'm going to zoom to the timeline that we're on before we dive in. Obviously, tonight is our discussion. At the joint meeting on the 25th of November, we will have a public hearing at the Planning Commission. So we'll be discussing this amendment to the city code not too long from now, and then bringing it to the City Council on December 3rd, hopefully for a review and decision. But if we need more time, we certainly do have an extra meeting, so we can do that before the first of the year. So that'll leave you with the discussion questions and then we can just kind of do whatever the council likes. I have them listed on the screen. Really, first and foremost: do we want to register cannabis businesses or look to Washington County? Are there concerns about specific cannabis businesses, and if there are, what might those be? [00:10:45] Matt Hirn: Yep, for me, the hard one on number one is, I know it would be an extra task for City staff to do that, but based on having no experience in that, we don't know what that time would be for City staff. And I'm just not a big fan of saying, "Here you go, Washington County, you be the gatekeeper." That—and maybe it's unnecessary concern, but it's certainly something that sticks in my head. And I'm not looking to put more things on staff's plate, but I guess not knowing what it takes, it kind of makes it hard to make that call. [00:11:15] Nick Dragisich: I'm kind of with you, Matt. I think limiting our ability to limit the number of businesses within the city overrides any cost concerns. Not that I'm not sensitive to cost concerns, but looking at the statute, you can charge a fee up to $500 or half of the amount in another section that the state charges, so it's what—less? So, you know, it's not a big fee, but we don't know what the process involved would be. But I think we're better off to bite the bullet on a thousand in cost as opposed to not having control over how many businesses we have in our city. [00:11:50] Nick Dragisich: And my question, I guess, when we say cannabis businesses, these are all the different types of cannabis businesses, right? [00:11:55] Nate Stanley: So yeah, just to be very clear: we are only able to control the retail uses. And my point is once you hit the two, there's not—there's no additional staff load because you don't—you can't allow any more businesses. They are automatically rejected retail. [00:12:12] Matt Hirn: Yeah. But let's—so would the county, in addition to the retail businesses, also do the micro and the—? [00:12:18] Nate Stanley: No, we'd still be responsible for those as regular businesses. Yeah. So they're going to go through a registration—the license process for—let's just use processing because that one's not a retail component. If a processing business wanted to open up shop here in City of Lake Elmo, they would simply apply to the state, the OCM. The OCM would check in with us, as I mentioned, to say, "Hey, do they have a zoning verification? Are they allowed to do this on that property?" If they're on a business park property, for example, we would say they need a CUP. Pending the CUP, they could potentially start their business, and there would be no registration process for that particular business. Right? So it's again just those businesses that do retail. Those are the only ones that we would be able to control. [00:13:05] Matt Hirn: So what you just mentioned, that would be the process regardless if we gave control over to the county? [00:13:10] Nate Stanley: Correct for cannabis businesses. Correct. Retail, we'd still have to handle the question of the zoning and go through CUP for that. That's not going anywhere. [00:13:20] Matt Hirn: Well, for me then, I guess I would prefer us to have control of that to two businesses rather than Washington County say, "Well, they've got room out there," and Woodbury's taking care of their own, and "they don't really want it downtown Stillwater," so going here, downtown Bayport, wherever. Right? So I think it probably behooves us to have a little hands on the wheel. [00:13:40] Nick Kragness: Hesitation there, yeah. I agree. I think having local control, at least to start with—and we may learn some things through this that it's low risk to go and have the county do it eventually, but I think we should start with controlling that right up front so we understand what's happening and what that process looks like and have that local control. That's kind of where I sit on that as well. [00:14:05] Nick Dragisich: I agree. Well, you brought up a good point; it's a good starting point because we can always change, can't we? [00:14:10] Nate Stanley: Absolutely. If it doesn't work... [00:14:12] Nick Dragisich: That was a good point. If it doesn't work, we can always—and did I misunderstand? Were there only so many allowed in the county? [00:14:20] Nate Stanley: So, really it's again going back to that retail component. The county or the city would be subject to that ratio of having to require or at least allow one retail business for every 12,500 residents. [00:14:35] Nick Dragisich: Even if there was 50 in the county, we'd still have to have one for every 12,500? [00:14:40] Nate Stanley: Yes, that's our understanding right now. [00:14:42] Nick Dragisich: That's where I was confused. Okay, thank you. [00:14:45] Matt Hirn: So let's say there's 100 businesses in the county, we still have to have ours? [00:14:50] Nate Stanley: Yeah, we still have to have ours too. [00:14:52] Nick Kragness: In this case, Nathan, if we take this on, you don't need more than four hours of sleep in any night, do you? [00:15:00] Nate Stanley: Yeah, I think this would be good. I mean, one of the concerns too is it's going to be business-driven. So the communities to the east, if the county were to regulate and license it, they may not even locate in those towns, right? And they may want to locate here. So we think demand—they were already asking about, you know, the 94 corridor. What's going on with—you know, are people developing that area? It seems like a great place to put these retailers, people coming from Wisconsin. [00:15:30] Jeff Holtz: Right, yeah. Okay. When you talk buffers, Nathan—thousand for school, 500 for the others—could you make them all a thousand and just be consistent? [00:15:40] Nate Stanley: You cannot get more restrictive than statute. [00:15:42] Jeff Holtz: Okay, yep. [00:15:43] Nate Stanley: But we can get more restrictive than statute in other ways, correct? In terms—I would really hone in, if I'm going to be looking to get more restrictive, on those design standards or performance standards. [00:15:55] Nick Dragisich: Yeah, so and when you talk about concern about specific cannabis business and Nathan—I mean really all we can control so far is number of retail. Everything else is allowable for the state and as long as it meets zoning requirements, which we're talking about Business Park, right? Yep. Okay. So I don't—you know, when I think about concerns someone might have right away, it's: what if we get a cannabis processor? And you know, what are we worried about with that? We worry about the smell. [00:16:25] Matt Hirn: I think yeah, some of the ordinances that we put in—at least for—I mean stuff is really pungent if it's not controlled. So whether they—however they, like you said, have a—what was the word?—industrial hygienist. Industrial hygienists come in and explain how they're going to use carbon filters or whatever purifiers to make sure that that stink doesn't hit their neighbor, you know, the neighborhood. That's—if the wind shifts, they're going to smell it, you know, a thousand feet away. [00:17:00] Nate Stanley: Right. And just for the Council and Commission, I mean, I think with CUPs, you know well that you can approve—you know, they're allowed, they're intentionally allowed in the community—but the city can place those reasonable conditions. And so when we've got a particular thing that we're worried about, if it's smell, we have a pretty clear ability to apply that condition. In this case, we've got—we're starting with, I would say, a fairly restrictive standard, or at least very clear standard, of no odor at the property boundary. And then how they accomplish that is definitely up to the business. And so it might be that we get specific specifications... [00:17:35] Nick Dragisich: Does growing it in a greenhouse limit that odor since it would be inside? [00:17:40] Nate Stanley: I might limit the scale of the use. I don't know if it would limit the odor. Greenhouses are pretty vented. [00:17:48] Matt Hirn: Probably vented, yeah. If it's in a greenhouse where they have multiple layers of plants, the footprint would be reduced. My concern is if you, you know, allow them to be—if we ban greenhouses, then you know we're going to have more land used up for cultivation should they decide to locate here. If in the greenhouse they have multiple levels, it's limited to so many square feet, right? [00:18:10] Nate Stanley: What we've actually proposed in the ordinance is not to allow cultivation outside. So we would only allow cultivation in a building. We could get more specific, and that's one of the questions I had in here: should we just say no greenhouses and just basically a—you know, a lot of the growing facilities actually have that appearance of like an Amazon fulfillment center. They're just an industrial building where they have the multiple rows and really high use of energy and water. [00:18:40] Matt Hirn: So we can ban the greenhouse, so they can still grow them in buildings? [00:18:44] Nate Stanley: Yeah, yeah. Okay. [00:18:45] Matt Hirn: Lights and stuff, okay. I was just thinking greenhouses, you know, you just—something you grow plants inside of. They're a huge energy user. MH. Yeah. Okay. So it could be brown houses or green or yellow houses, but they can't be greenhouses, right? [00:19:00] Nick Dragisich: Could be a green building. [00:19:02] Nick Kragness: Nathan, I have a question about the cannabinoid or the low-potency hemp stuff. So the City of Lake Elmo hasn't discussed that at all yet, so is that correct? [00:19:12] Nate Stanley: Correct, yep. [00:19:13] Nick Kragness: So then the liquor stores could currently carry the THC beverages, or the restaurants could currently have it on tap, if we don't have any regulations against it? [00:19:22] Nate Stanley: Yeah, so I think we are proposing we address that. [00:19:25] Nick Dragisich: Did we—? There's some restaurants—I don't think you'll ever see it on tap because it's—it's not very regular. But the cans for sale—they sell the cans at some places, I'm pretty sure. [00:19:35] Nate Stanley: Yeah, so we do have the sales business accounted for, at least for the retail—that customer-facing retail side of it. But I don't know that we've necessarily got the sales of the bar in this one. So that would be something that we probably have to look at a little further. [00:19:50] Nick Kragness: Okay, and then the edibles too. Okay. [00:19:52] Nate Stanley: Well, right. We just ask the question: if that were something that were prohibited, does the Council or Commission think that would be a problem in the community with non-conformance? [00:20:02] Nick Kragness: I'm sorry, I didn't hear you. [00:20:05] Nate Stanley: So if we were to like just basically ban sales at like bars or whatever of low-potency products, would that cause an issue for existing businesses? [00:20:15] Nick Kragness: I think there's some businesses that have it currently, so I don't know why we—I guess this is where I struggle a little bit with cannabis versus alcohol and putting so many regulations around cannabis. 3.2 beer kind of—all right, sure—analogy that might not help me put in perspective. [00:20:35] Nate Stanley: So the serving size, to use that analogy, is what's limited, right? It's 5 milligrams per serving, and so you've got typically a lower potency product. Yeah, yep. Okay, let me go back to the questions here. So the discussion so far has been helpful. We will definitely be looking at the registration process and, given the guidance here received this evening, likely be coming up with a draft registration ordinance for the Council as well, and that could be considered by the Planning Commission at their meeting. It seems like we, through our performance standards, have addressed some of the primary concerns that the community might have. Looking at those buffers, it seems that the Council and Commission are interested in keeping those in the ordinance. I'm wondering if you're interested in keeping all of them for now? Perhaps getting a couple head nods—say yes. I don't know why you wouldn't. I think the discussion question five is about adding cannabis testing facilities to the list of uses. I think this would be wise to do so; I just suggest that we move forward and do that just so that we've defined the use and regulated it accordingly. And lastly, we do have standards created for those temporary cannabis events. Again, really the primary thing is not allowing them anywhere but a licensed—or sorry, a cannabis business that's got a CUP in the community. [00:21:55] Matt Hirn: They still have to be held inside and meet the core and all that stuff, correct? [00:22:00] Nate Stanley: Correct. [00:22:02] Nick Kragness: So my analogy to 3.2 beer wasn't totally accurate. [00:22:05] Nate Stanley: Yeah, you were worried, weren't you? [00:22:07] Nick Kragness: I was. [00:22:08] Jeff Holtz: And just in this draft copy, so item D, the temporary cannabis—you just need to clean that up. [00:22:15] Nate Stanley: Yep, I see a couple—well, there were a couple typos that I noticed today, so I appreciate that. That'll get fixed. All right, I look at staff if there's any other questions that staff has that I've not touched. [00:22:30] Nicole Miller: Not going to be mad at us, are you, if we control that by the city? Fine. Okay. [00:22:35] Jeff Holtz: I thought the draft ordinance was pretty complete, by the way. I went through it in very detail, and the only trick was going back with LCs and CCs and all that, you know. I got to go back and say, "Okay, what's that? What's that? What's that?" But I thought the restrictions you placed made sense to me by zoning district. And yeah, like me, I think controlling it would be important from my perspective. But I thought the draft ordinance was pretty complete. I know we have a few questions here, but generally speaking, it was a very nice job. My compliments to the staff. [00:23:10] Nate Stanley: Appreciate the guidance this evening. [00:23:12] Matt Hirn: Agreed, Nathan. I think when you guys present to Planning Commission, that you show the map, highlight those areas that are meeting where it could be. The circles can be ambiguous, but I think that will allow us a little more direction to give a recommendation to Council. [00:23:30] Nate Stanley: Got it. I guess a follow-up question is if there is any other information that you'd like us to bring to future meetings at either the Planning Commission or City Council, other than I've got registration and low-potency edible questions? [00:23:45] Nick Dragisich: I don't—I mean, the biggest question, you know, I think that got clarified for me was really the only thing that we can control, beyond where it can be and lighting and parking and all that stuff, is the number of retail that we have in our city. Other than that, I mean, if they meet regular stuff—the meso-business, micro—they can, regardless of what the city says, they're allowed to be there, which is kind of news to me, but that's why I understand it as well. [00:24:15] Nate Stanley: Thank you. [00:24:16] Charles Cadenhead: Thank you, yes. Thank you very much. And um, I think that that ends our agenda. Do we have anything on there to show what's coming up in the next workshop? No. All right. With that, then, we will adjourn this evening's City Council workshop at 7:27. Thank you.