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HomeMy WebLinkAbout2024-07-16 Work Session Meeting PacketAgenda City Council Work Session City of Edina, Minnesota City Hall Community Room Tuesday, July 16, 2024 5:30 PM I.Call To Order II.Roll Call III.Community Health Commission Update IV.Cannabis Update V.Adjournment The City of Edina wants all residents to be comfortable being part of the public process. If you need assistance in the way of hearing ampli"cation, an interpreter, large-print documents or something else, please call 952-927-8861 72 hours in advance of the meeting. Date: July 16, 2024 Agenda Item #: III. To:Mayor and City Council Item Type: Other From:Jeff Brown, Community Health Administrator Item Activity: Subject:Community Health Commission Update Discussion CITY OF EDINA 4801 West 50th Street Edina, MN 55424 www.edinamn.gov ACTION REQUESTED: None INTRODUCTION: Vice-Chair Nick Mattison and Community Health Commission members will provide an update on the 2024 Community Health Commission work plan items and discuss potential work plan items for 2025. ATTACHMENTS: Description 2024 CHC Work Plan Update Community Health Commission Work Plan-2024 Initiative Number Description Target Completion Deliverable Status Last Update The Community Health Commission advises the City Council, which serves as the Community Health Board, on the health needs of Edina residents and other health- related issues. Initiative 1.2.1 Racism as a Public Health Emergency Review report from 2023 work plan and make recommendation regarding declaration of racism as a public health emergency in the City of Edina. Include potential activities/policy changes that would accompany declaration. Q1 Recommendation to Council On Track Commission has created draft proclamation and is collaborating with staff on final language. Will discuss with Council at July 16, 2024 Work Session. Initiative 1.2.2 Opioid Stakeholder Workgroup Representative Two members of the Community Health Commission will serve as representatives to the opioid funds stakeholder working group which guides the spending of opioid settlement funds in Bloomington, Edina, and Richfield. Q1 Appointment and Representation Completed Initiative 1.2.3 Aging Community/Social Connectedness/Mental Health As Edina's population average age is 7 to 8 years older than the rest of the State, commission will report on possible city- level activities aimed at assisting those aging in place, specifically relating to social connectedness. Q4 Report to Council On Track Collaboration with grant recipient Marnita's Table organization to promote and execute GenConnect event focused on connecting different age groups. Date: July 16, 2024 Agenda Item #: IV. To:Mayor and City Council Item Type: Reports / Recommendation From:Ari Lenz, Assistant City Manager Item Activity: Subject:Cannabis Update Discussion CITY OF EDINA 4801 West 50th Street Edina, MN 55424 www.edinamn.gov ACTION REQUESTED: Staff will provide an update and ask for City Council to provide direction on cannabis regulations within the City's control. INTRODUCTION: The State legalized adult-use cannabis in Minnesota at the end of the 2023 legislative session. City Council direction is needed on a number of items to have an ordinance drafted. ATTACHMENTS: Description Staff Report: Cannabis Update July 16, 2024 Mayor & City Council Ari Lenz, Assistant City Manager Addison Lewis, Community Development Coordinator Jeff Brown, Community Health Administrator Cannabis Update Information / Background: The State legalized adult-use cannabis in Minnesota at the end of the 2023 legislative session. Cannabis cannot be sold until the Office of Cannabis Management (OCM) was established and able to issue licenses, that timeline is intended to be January 2025. Municipalities were given the ability to put in place moratoriums and the City of Edina adopted a moratorium effective until January 1, 2025 or until removed by the Council. A model ordinance regarding cannabis was released in June and can be found at the end of the OCM’s guide. Using input from Council, the City will begin putting together a full ordinance draft over the next few months. Note: The information below applies to cannabis and cannabis concentrate products not “edible cannabinoid products” or “lower-potency hemp edibles” that are already legalized in the City. Staff are not recommending any revisions for those products at this time. Cannabis Zoning: The City must decide which zoning districts cannabis businesses will be allowed to operate in. Many cities choose to zone cannabis retailers similar to tobacco stores or liquor stores. In Edina, tobacco stores and liquor stores are a permitted use in the Planned Commercial Districts 1, 2 and 3 (PCD-1, PCD-2 and PCD- 3). The current Zoning Ordinance does not include purpose statements that describe the intent or objective of each district; however, PCD-1 is generally for smaller neighborhood businesses. Examples of PCD-1 zoned areas include Valley View and Wooddale, 44th and France, 70th and Cahill, and Lincoln and Londonderry. PCD-2 allows for more and slightly larger commercial businesses. Examples of PCD-2 zoned areas are Grandview and 50th & France. PCD-3 allows the most and largest commercial businesses and is limited to the Southdale District. STAFF REPORT Page 2 The state law allows cities to prohibit a cannabis business within 1,000 feet of a school or 500 feet of a day care, residential treatment facility, or an attraction within a public park that is regularly used by minors, including playgrounds and athletic fields. The City will need to decide whether to impose such buffer requirements on cannabis businesses. No such buffer requirement is imposed for tobacco and liquor stores, although the City has control over the locations of municipal liquor stores. The City could also impose a buffer less than the maximum allowed under state law. As part of the cannabis market, there will also be businesses that engage in cultivation, manufacturing, processing, testing and wholesaling of cannabis products. These types of activities are generally already permitted within the Planned Industrial District (PID) for other products. Staff recommends these types of cannabis businesses be limited to PID. Businesses issued a microbusiness license from the State may also offer onsite consumption of edible cannabis products and lower-potency hemp edibles, similar to a taproom at a brewery. Staff recommends this also be limited to PID. Other zoning considerations: • Cannabis businesses will be required to comply with all other aspects of the zoning ordinance including for signage, parking, setbacks, floor area ratio, building design standards, etc. • State law requires cannabis businesses prevent the visibility of cannabis and hemp-derived products to individuals outside the retail location. • State law requires a cannabis business must maintain and follow a security plan to deter and prevent the theft or diversion of cannabis products, unauthorized entry into the cannabis business, and theft of currency. Requirements include but are not limited to maintaining video surveillance records, using specific locking mechanisms, establishing secure entries, and the number of employees working at all times. • State law requires a cannabis business must maintain a ventilation and filtration system sufficient to meet the requirements for odor control established by OCM. • Unlike a brewery taproom, a cannabis microbusiness offering onsite consumption may not permit an individual who is under 21 years of age to enter the premises. Local Registration: Licensing is being conducted by the Office of Cannabis Management (OCM), the OCM will forward applications to cities for them to certify whether the proposed cannabis business complies with local zoning ordinance, and if applicable building and fire code. In addition, the City will have 30 days to provide input on the application content of comments are limited to the proposed location or sharing public information about the applicant. The cannabis business is required before beginning retail sales to register with the City. Registration will review validity of OCM license, registration fee, preliminary compliance check and compliance with state laws, verification of paid property taxes and assessments. Due to the limited scope and timeline, this will be a staff run internal process (similar to tobacco licenses) done by Edina Health. STAFF REPORT Page 3 Cost of Registration – A city may impose an initial retail fee of $500 or up to half the amount of the applicable initial license fee charged by OCM (whichever is less). The City may also charge a renewal retail registration fee of $1,000 or up to half the amount of the applicable renewal license fee charged by the OCM, whichever is less. Staff is recommending charging the maximum amount for registration, until we fully understand the staff work associated with the registration. Number of Establishments – The City is required to allow one license per every 12,500 residents (a minimum of five licenses). The City Council could limit to five or allow more, staff is seeking direction from Council on the number of licenses they would like to offer if they would like a limitation. One consideration, local cannabis sales revenue will likely be pro-rated to the number of establishments in each jurisdiction. County Registration – Hennepin County has offered to take over registration (and enforcement - see below) on behalf of the City. The City is not recommending this at this time, Edina Health feels comfortable taking on management of the registrations, which would allow better local control and unsure how the County taking the service would impact cannabis revenue. If Council wanted to have Hennepin County take this over the City would need to pass a resolution give our consent. Municipal Cannabis - The City does have the option to pursue municipal cannabis. However, Staff does not believe now is the right time. The limitations of not allowing exclusive municipal sales and the concerns regarding federal legality requiring cash-based business would be a challenge and would diminish cost effectiveness. In the future, if these measures change the City may want to explore and the new legislative changes made this year would allow the City to receive a license at that time without formally going through the lottery system. Enforcement: At least once per calendar year, the City is required to conduct compliance checks of every cannabis business and hemp business with a retail registration and to “conduct unannounced age verification compliance checks at least once each calendar year.” County Enforcement – Hennepin County has offered to take over enforcement (and registration – see above) on behalf of the City. The City is not recommending this at this time, Edina Police Department is comfortable being responsible for enforcement in the same manner they do tobacco enforcement today and Staff believes it will offer us better local control. If Council wanted to have Hennepin County take this over we would need to pass a resolution giving our consent. Other notes & Resources: Revenue – Cities will receive a distribution proportional to the number of cannabis businesses located in the City as compared to the number of cannabis businesses in all cities. The gross receipts tax went into effect June 30, 2023. The Department of Revenue should certify the amount to be paid by Sept. 1, 2024 and every year after, with the full amount paid by Dec. 26, 2024. STAFF REPORT Page 4 Temporary Cannabis Event Sales – Staff reached out to OCM regarding whether temporary event licenses are required or if the City could not allow. OCM responded since they a license type and the law prohibits the City from limiting all license types. Staff is recommending at this time to adopt regulations similar to temporary liquor event permits. Table Summary of Edina Regulations - Staff has attached a table sharing a summary of tobacco, liquor and cannabis sales to assist council in reviewing. 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Council could set limit of anything above 5 or no limit. License Fee(s) $500 Same as tobacco Off-sale license fee is $738 + $500 for background check if in MN and $2000 out of MN. Renewal is $738 + $200 for background check. $700 Initial registration Fee limited to $500 or half of OCM License cost (whatever is less). Renewal registration of $1,000 or up to half the amount of applicable renewal license fee charge by OCM (whatever is less). Distance requirement(s) None None None None Minimum Distance from Schools and Parks. The act states that cities may prohibit the operation of cannabis businesses within 1,000 feet of schools, or 500 feet of any day care, residential treatment facility, or “attraction within a public park that is regularly used by minors,” (e.g. playgrounds, athletic fields, public water features). Although written as a grant of authority, this functions as a cap—that is, the city cannot impose a distance requirement of more than 1,000 feet from a school, but could impose a lower distance if it desired. Time of sales None None (1) on Sundays, except between the hours of 11:00 a.m. and 6:00 p.m.; (2) before 8:00 a.m. or after 10:00 p.m. on Monday through Saturday; (3) on Thanksgiving Day; (4) on Christmas Day, December 25; or (5) after 8:00 p.m. on Christmas Eve, December 24. (6) Malt liquor in growlers on Sunday after 8 a.m. None The state law provides that cannabis business can operate between 10:00 am and 9:00 pm, and businesses cannot operate between 2:00 am and 8:00 am (10:00 on Sundays). Cities may pass ordinances restricting operations during the hours not specifically listed (9:00 pm to 2:00 am and 8:00 am to 10:00 am). Prohibited Use City Code: No smoking lounges permitted, No flavored product sales permitted Private use: No limitations in addition to MN Clean Indoor Air Act Same as tobacco City Code: City does not issue off-sale licenses for exclusive liquor stores. None from movable place of business None from vending machine No self service No sampling Smoking is not allowed in indoor public spaces, and “on- sale” cannabis does not appear to be allowed by state licensure. However, we have sometimes seen tobacco stores maintain outdoor seating areas, which patrons can then choose on their own to use for smoking. The city could adopt restrictions prohibiting outdoor seating areas at cannabis businesses. This is likely not a concern at hemp businesses, as no smoke-able hemp products are legal under state law. Compliance Checks PD – Annual Same as tobacco 2x annually, same as tobacco. Minimum 1 time per year Compliance checks must be performed at least once per year. Violation language (1)Licensees. Any licensee found to have violated this article, or whose employee shall have violated this article, shall be charged an administrative fine of: a.$300.00 for the first violation of this article; b.$600.00 for the second violation at the same licensed premises within a 36-month period; c.$1,000.00 for a third violation at the same location within a 36- month period. In addition, after Same as tobacco Grounds for suspension: The council may suspend or revoke any license for the sale of intoxicating or 3.2 percent malt liquor for any of the following reasons: (1)False or misleading statements made on a license application or renewal, or failure to abide by the commitments, promises, or representations made to the city council.(2)Violation of any special conditions (e.g., restrictions on entertainment) under which the license was granted, including, but not limited to, the timely payment of real estate taxes, and all other If the city discovers licensing violations, or if a business constitutes “an immediate threat to the health or safety of the public,” the city may suspend the business’s local registration for up to 30 days. The city must notify OCM of the suspension immediately. OCM must then review the action, and may decide to impose a longer license suspension or license termination. If a business continues to sell products despite the suspension, the city may impose a civil penalty of up to $2,000 per violation (per sale). The statute contains an appeals mechanism for state licensing actions through OCM. It does not mandate appeals for local actions imposing a less than 30-day suspension. However, potentially shuttering a business for 30 days is still a hefty penalty power. To avoid constitutional due process the third violation, the license shall be suspended for a period of seven days. d.$1,000.00 for a fourth violation at the same location within a 36- month period. In addition, after the fourth violation, the license shall be revoked. charges.(3)Violation of any state or federal law regulating the sale of intoxicating liquor, 3.2 percent malt liquor, or controlled substance.(4)Creation of a nuisance on the premises or in the surrounding area.(5)That the licensee suffered or permitted illegal acts upon the licensed premises or on property owned or controlled by the licensee adjacent to the licensed premises, unrelated to the sale of intoxicating liquor or 3.2 percent malt liquor.(6)That the licensee had knowledge of illegal acts upon or attributable to the licensed premises, but failed to report the same to the police.(7)Expiration or cancellation of any required insurance, or failure to notify the city within a reasonable time of changes in the term of the insurance or the carriers. Presumptive Penalties range from 1st to 4th violation with a list of behaviors that result in immediate revocation for 1st violation. For other behaviors the violation fee is from $500-$2000 and 3-7 day suspension. All violations requires a public hearing but violator can pay fee and waive PH for 1st violation. or takings claims, we recommend that the city adopt a local appeal mechanism.