City of Northfield - File #: PC Res. 2025-002

• File #: PC Res. 2025-002
• Version: 1
• Type: PC Resolution
• Status: Agenda Ready
• File created: 3/5/2025
• In control: Planning Commission
• On agenda: 4/17/2025
• Title: Resolution Recommending Text Amendments Related to Adult-use Cannabis in Chapter 34 - Land Development Code.

Planning Commission Meeting Date:                     April 17, 2025                     

To:                                          Members of the Planning Commission

From:                     Jake Reilly, Community Development Director
Mikayla Schmidt, City Planner
Lynnette Peterson, City Clerk
Ben Martig, City Administrator

Title

Resolution Recommending Text Amendments Related to Adult-use Cannabis in Chapter 34 - Land Development Code.

Body

Action Requested:

The Planning Commission recommends changes to Chapter 34 - Land Development code to the City Council in order to address state law changes related to adult-use cannabis and provide for the establishment of regulations.

Summary Report:

The proposed cannabis zoning amendments are in response to MN Session Law Chapter 63, which legalized adult-use cannabis and established a regulatory framework over the cannabis industry through the State of Minnesota’s Office of Cannabis Management. The Office of Cannabis Management (OCM) is expected to begin issuing cannabis businesses this summer. The proposed amendments herein focus on permitted cannabis business locations, Land Development Code definitions and standards, and distance requirements.

Background:

A new Minnesota Law enacted at the end of the 2023 legislative session, Minnesota state statute chapter 342, legalizes the possession, use, manufacturing, and sale of certain cannabis products within the State. The Law also establishes the OCM to enforce a licensing system throughout the State and establishes expungement procedures for certain individuals previously convicted of cannabis-related crimes. Under the State Law, local governments may register cannabis businesses and enforce certain zoning regulations within their jurisdiction, but they may not require additional licensing of cannabis businesses. Below are additional considerations related to local cannabis businesses:

A local government unit may, by ordinance, limit the number of licensed cannabis retailers, cannabis mezzobusinesses with a retail operations endorsement, and cannabis microbusinesses with a retail operations endorsement to no fewer than one registration for every 12,500 residents. There is no upper limit or cap imposed by the State on the number of cannabis retail businesses.

A tax equal to 10% of gross receipts from retail sales of taxable cannabis products will be imposed on any taxable cannabis product retailer that sells cannabis products to customers. (League of Minnesota Cities)

Revenues from the retail sales of cannabis products will be divided, with 80% going to the general fund and 20% to the local government cannabis aid account. Cities will receive 50% of the amount certified to the local government cannabis aid account. (League of Minnesota cities)

Half of the amount certified in the cannabis local government aid fund will go to cities. 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. (League of Minnesota cities)

The new Law creates 13 cannabis and hemp license types through the OCM, which represent land uses for which cities need to accommodate within their jurisdictions by amending existing zoning definitions and standards, creating new definitions and standards, or through zoning administrator interpretations. The following diagram illustrates the role of cities in regulating cannabis businesses:

Credit: League of Minnesota Cities

General Amendment Approach:

The business activities for the 13 new cannabis license types were found to be substantially similar to a number of existing uses in the Land Development Code. The general approach being proposed is amending existing uses whenever possible rather than creating new land use definitions and standards. Additionally, this approach does not create a distinction between medical cannabis businesses and recreational cannabis businesses within the Code. The recommendations include new definitions and a distance requirement standard for “Cannabis retail,” and amendments to existing uses to accommodate license types.

The following table summarizes the cannabis businesses activities for the Office of Cannabis Management’s license types and Attachment 1 is a state-produced table with further details on the types of activities and licenses and endorsements are available for those seeking to operate a cannabis-related business:

Table 1: License type summary table

Cannabis Retail:

There are four license types that allow cannabis and hemp retail (Cannabis microbusiness, Cannabis mezzobusiness, Cannabis retailer, and Medical Cannabis Combination Business), and one license type that only allows hemp product retail (Lower-potency hemp edible retailer).

Additions to the code related to cannabis retail and processing and accompanying standards are proposed through this study. The proposed amendments to the land development code related to are intended to address retail sales of the full range cannabis/hemp products legalized by the State Law. Ordinance 1071 addressed the agricultural and industrial uses possible due to the state law.

Below are all of the proposed definitions and standards for cannabis uses, including those adopted in Ordinance 1071. Material adopted in the earlier ordinance is underlined, the language proposed with these amendments is in both in red text and underlined.:

2.8 Use Definitions.

2.8.1 Agricultural Use Category. The agricultural use category is comprised of uses characterized by general active and on-going agricultural uses, activities, and related uses. An agricultural use, in general, means the use of land for the growing and/or production of field crops, livestock, and livestock products for the production of income.

(F) Cannabis/hemp Cultivation, Outdoor. An establishment used for the growing, storage, and sale of legal cannabis seeds and plants and lower-potency hemp seeds and plants cultivated locally for retail or wholesale sales.

(G) Wholesale or Commercial Plant Nurseries. An establishment used for the growing, storage, and sale of legal garden plants, shrubs, trees, or vines, including cannabis and hemp for retail or wholesale sales.

2.8.4 Commercial Use Category. Establishments that contain businesses where the intent is of realizing profit from the sale of goods and services.

(I)                      Cannabis retail. A cannabis business with a license or endorsement authorizing the retail sale of immature cannabis plants and seedlings, cannabis flower, and packaged cannabis products directly to consumers.

(J)                     Cannabis mezzobusiness. A cannabis business permitted, with the relevant endorsements for such activities from the Office of Cannabis Management, to cultivate cannabis, manufacture cannabis and hemp products, and package such products for sale to customers or another licensed business. A cannabis mezzobusiness may operate up to three retail locations with a retail operations endorsement from the Office of Cannabis Management. A cannabis mezzobusiness location operating with a cannabis retail component must comply with all standards applicable to a cannabis retail use.

(K)                     Cannabis microbusiness. A cannabis business permitted, with the relevant endorsements from the Office of Cannabis Management, to cultivate cannabis, manufacture cannabis and hemp products, and package such products for sale to customers, including on-site consumption, or to another licensed business. A cannabis microbusiness may operate a single retail location with a retail operations endorsement from the Office of Cannabis Management. A cannabis microbusiness location operating with a cannabis retail component must comply with all standards applicable to a cannabis retail use.

(SV) Greenhouses, Garden, and Landscaping Sales and Service. Facilities that may include greenhouses (glassed or translucent enclosures used for the cultivation and protection of plants) and where the primary business is the sale of plants, including commercial cannabis cultivation up to 15,000 sq. ft., landscaping materials, and related products.

(Y)                     Lower-potency Hemp Edible Manufacturer. A hemp business licensed by the Office of Cannabis Management to manufacture artificially derived cannabinoids as well as lower-potency hemp edibles for public consumption and package such lower-potency hemp edibles for sale to consumer.

(Z)                     Lower-potency Hemp Edible Retailer. A hemp business licensed by the Office of Cannabis Management to sell packaged lower-potency hemp edibles for sale to consumer.

(NN) Transportation and Delivery Services. This use shall include cannabis businesses licensed or endorsed as cannabis delivery services and/or cannabis transporters by the Office of Cannabis Management.

2.8.5 Industrial, Manufacturing, Research, and Wholesale Use. Business uses associated with the manufacturing, processing, servicing, and storage of goods and materials. This use category may also include uses such as truck distribution and research facilities that have related impacts but do not necessarily involve manufacturing of products.

(M) Wholesale Commercial Use. The sale of merchandise, much of which is stored on the premises, to retail and service commercial uses, office uses, or institutional uses, or to other wholesalers, but not to the general public. This includes cannabis businesses licensed or endorsed as cannabis wholesalers by the Office of Cannabis Management.  Wholesale commercial uses may also mean acting as an agent or broker in the buying, selling, delivery or transport of merchandise.

2.9 Use-Specific Standards.

2.9.19 Retail Sales and Service.

1. Retail sales and service may be permitted in the I1-B Industrial district provided that the total square footage of retail sales is limited to a maximum of 20 percent of the total floor area and is related to items manufactured on site.

2. Except in the I1-B district, a conditional use permit is required for new construction of a cannabis retail business covering more than fifteen thousand (15,000) square feet of land to ensure size and design compatibility with the location.

3. A cannabis businesses with a retail license or a cannabis retail endorsement is prohibited from sharing a common entrance with a business licensed as a tobacco products shop.

4. Cannabis businesses with a retail license or a cannabis retail endorsement shall be located a minimum distance of 300 feet from any primary or secondary school, measured from the property line of the school to the principal structure of the cannabis retail business.

5. Cannabis businesses with a retail license or cannabis retail endorsement shall be separated from other such cannabis retail businesses by a minimum distance of 1,320 feet.

2.9.10 Industrial Uses (Indoors).

(A) Industrial uses (indoors) located within areas zoned C1 shall adhere to the following use specific standards in addition to all standards found in Section 3.2.3, C1 District Site Development Standards.

(AB)                     Industrial uses indoors shall be limited to no more 50 percent of the area of a building or 5,000 square feet, whichever is less.

(BC)                     Industrial uses indoors, if on the first floor, shall be located in the rear portion of the building so that the front one half of the building is used for any commercial use permitted in the C1 district. Indoor uses may be located on any floor either above or below grade meeting all other code requirements.

(CD)                     All vertical and horizontal separation requirements of the building code shall be strictly applicable to industrial uses indoors located in the C1 district.

(DE)                     The performance standards found in Section 3.3.5, Performance Standards of this LDC shall be strictly applicable to industrial uses indoors that are located in the CI district.

(F)                      Cannabis businesses with a cultivator or manufacture license or endorsement may operate up to 30,000 sq ft of cannabis cultivation, cannabis product manufacturing, or lower-potency hemp edible manufacturing within an indoor facility.

(a) All such uses are intended to be compatible with adjacent commercial and service uses. Odors, noise, vibration, glare and other potential side effects of manufacturing or cultivation processes shall not be discernable beyond the property line.

Cannabis retail amendment analysis:

Under the state rules, eligible applicants (those with preliminary approval from OCM) have 18 months to obtain a cannabis business license. To do so, they must: (1) secure a business location and submit the final site details to OCM, and (2) provide OCM with finalized business, operations, and security plans, along with finalized standard operating procedures for accounting, inventory control, quality assurance, and employee training. Additionally, any other required documents must be submitted following the adoption of rules. Prior to submitting site registration and updating documents, the state guidance recommends a prospective business owner engage in early conversations with the local government entity with zoning authority over their proposed business location. For the six business types that require local registration and local government zoning approval to proceed, OCM will forward their application to the local government noted on the site registration.

At that time the local government has 30 days to certify whether the applicant with preliminary approval is compliant with local zoning and land use ordinances. The state places the responsibility of understanding the specific process a local government may require to obtain zoning approval for their business and, if applicable, issue a local retail registration on the potential operator.

The state has established in the rulemaking that zoning compliance certification is distinct from the local retail registration process, and local governments have the authority to limit retail registrations for cannabis retailers, microbusinesses, and mezzobusinesses wishing to operate retail locations. All cannabis businesses are required to obtain local zoning certification, but only licensees who wish to partake in the retail sale of cannabis must obtain a local retail registration (microbusinesses and mezzobusinesses with retail endorsements, retailers, and medical cannabis combination businesses).

Under the proposed amendments to Chapter 34 of the Northfield City Code, changes to the proposed use table would make cannabis retail a permitted or a conditional use in any zoning district where general retail is currently permitted (C2, NC-F and I1), as well as in the Agricultural Services district (A-S) when associated with a cultivation or manufacture license. The downtown commercial district (C1) is not considered to be included for retail adult-use cannabis at this time.

The state law does not prohibit cannabis retail uses from co-locating with tobacco product shops. Under the proposed amendments, cannabis retail uses cannot share a common entrance with tobacco product shops, thereby separating these two uses and not permitting them to exist within the same premises. Providing for some separation between cannabis businesses and tobacco businesses through zoning may facilitate enforcement in the future by allowing the city to take action toward a tobacco product shop without affecting a cannabis retail use, or vice-vera.

Additional amendments are recommended to the set of regulations regulating businesses, in Chapter 14 and Chapter 30 the City’s Code of Ordinances include new definitions, conditions, and edits associated with establishing and implementing the enabling legislation. Those amendments are included as attachments to this memo, for informational purposes.

Below is the spatial analysis related to the possible distance requirements:

The state has established some general guidance for regulating the time, manner and place of retail businesses. Local jurisdictions may neither prohibit cannabis businesses outright nor limit the number of retail businesses to fewer than one registration for every 12,500 residents, however the State Law allows local jurisdictions some control in regulating the distance of cannabis businesses from certain land uses. Specifically, the Law says that “Cities may prohibit the operations of 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 a playground or athletic field.”

Review of other cities’ Zoning and/or Land Development Codes indicates that cities will typically apply some distance requirements between cannabis retail businesses and presumably incompatible land uses. Of the 30 cities researched, six of them had no distance requirements, while the remaining 24 cities had requirements ranging from 200 feet to 1,000 feet from uses like schools, daycares, playgrounds, and other cannabis businesses.

Distance requirements may help mitigate potential negative externalities associated with being in close proximity to cannabis businesses, at the same time they may also reduce the number of potential locations and opportunities to start a cannabis business and increase the administrative burden on staff to implement the ordinance.

Restricting the location of cannabis businesses by applying stringent distance requirements would more likely than not result in cannabis businesses being concentrated in specific locations instead of being disbursed throughout the city. This would likely increase average travel times and parking demand at cannabis retail businesses and may potentially concentrate negative externalities. Many of the negative externalities that a distance requirement may help mitigate, however, may be mitigated through provisions in state law or local ordinances. These include a local ordinance banning smoking cannabis in public, a ban on advertising of cannabis products, and security plan requirements for licensed businesses, among others.

Three different distance requirements were evaluated to determine how distance requirements would restrict the potential locations of new cannabis retail businesses:

1.                     The maximum distance permitted by the State Law which would prohibit the operation of cannabis retail businesses within 1,000 feet of schools and 500 feet from daycares, residential treatment facilities and park features; and,

2.                     A distance requirement prohibiting the operation of cannabis retail businesses 300 feet (about 1 residential block) from schools; and,

3.                     A distance separation requirement of 1,320 feet from other cannabis businesses.

To determine the effect that the distance requirements would have on restricting the potential locations of future cannabis businesses, parcels where the underlying zoning would permit general retail were mapped and then the distance requirements were applied from potentially incompatible land uses like schools and daycares. Based on this spatial analysis, prohibiting cannabis retail businesses from operating within 1,000 feet of schools and within 500 feet from daycares and park features (the maximum distance requirements permitted) would restrict the potential locations of cannabis business in the following ways:

79% of parcels zoned for general retail would be fully or partially prohibited from establishing a new cannabis retail license. Additionally, this would almost entirely prohibit the establishment of cannabis retail businesses in the major commercial districts in the city, including downtown and the highway commercial and industrial corridors.

There would be a significant reduction in the opportunities to establish a new cannabis business in zoning districts that are intended to accommodate retail businesses, and as result, the majority of new cannabis businesses could only be established legally in industrial districts that are primarily intended to accommodate wholesale and manufacturing type uses, shown in Map 1.

Map 1: Maximum allowed distance requirement

Concentrating cannabis businesses in those locations, would likely create unnecessary competition for already scarce industrial land. This could increase costs and make it difficult for other industrial businesses to locate in Northfield. Additionally, traffic would also increase to the industrial areas where these uses would be located, which often does not have the multimodal infrastructure needed to support more community-oriented retail.

The majority of parcels with existing retail land uses would be prohibited from establishing a new cannabis retail business. Establishing future retail cannabis businesses in existing retail spaces will reduce the amount of capital investment that is needed to start a new cannabis retail business. If existing retail spaces are not available, the capital investment needed to start a new cannabis retail business would increase because other uses would have to be converted to retail spaces.

Based on the findings of this spatial analysis, applying the maximum distance requirements allowed by the enabling State Law would be inconsistent with the policy guidance of the 2008 Comprehensive Plan, as well as the general draft policy direction of the in-process 2045-horizon Comprehensive Plan update. Applying the maximum distance requirements would result in cannabis retail businesses being guided away from downtown/mixed-use areas. Cannabis retail businesses would be more likely to develop in industrial areas that are intended to primarily accommodate manufacturing and processing land uses. This would be inconsistent with the following specific principles, objectives, and strategies:

Land Use Principle 3: The preference for accommodating future growth is in infill locations, then redevelopment/land intensification opportunities, and then on the edge of existing developed areas; and

Land Use Objective 2: The downtown core is an important aspect of community life; and

LU 2.1 Promote general merchandise retailers, financial institutions, office developments and entertainment uses within the downtown core. Create new opportunities for businesses by reinvesting in the infrastructure and public spaces in and around the downtown; and

Land Use Objective 3: Encourage a compact development pattern, and support infill, redevelopment and land intensification; and

LU 3.1 Create incentives to encourage infill, redevelopment and land intensification; and

Land Use Objective 5: Guide new commercial/retail and office developments in a mixed-use pattern; and

LU 5.1 Encourage small-scale retail and service commercial uses to locate in the downtown area; and

LU 5.2 Create regulations that allow for mixed-use commercial developments; and

Community Identity Objective 2: Strengthen downtown as an historical and cultural center of the community and CI 2.5 Support existing and new local businesses that provide dining, retail, arts and entertainment; and

Transportation Objective 3: Balance transportation needs with the Land Use Principles identified in Chapter 4 of the 2008 Comprehensive Plan; and

Economic Development Objective 2: The City will make sufficient land resources available for the needs of existing and future businesses in line with the strategies outlined in the 2006 Economic Development Plan; and

ED 2.1 Land resources within the community that are served or can be easily served by infrastructure and are suited for commercial and industrial intensification and redevelopment will be zoned appropriately to enable full and efficient utilization; and

Economic Development Objective 3: Expanding and revitalizing the Cannon River corridor will be a pivotal part of the strategy to maintain the historic character that is Northfield; and

ED 3.1 Sites that are suitable for land infill and redevelopment/intensification along the Cannon River south of 5th Street should be identified, and strategies to encourage new investment in these areas should be pursued; and

ED 3.4 Encourage further redevelopment/intensification in downtown as a means to maintain and add to the vitality of this area. Downtown redevelopment/ intensification should focus on retail uses, professional services, arts activities including opportunities for live-work development, businesses that support other businesses, and downtown housing.

Comparatively, prohibiting cannabis retail businesses from operating within 300 feet of schools, except in downtown, would restrict the potential locations of cannabis business to about 27% of general retail parcels as fully or partially prohibited from establishing a new cannabis retail business. A 300-foot distance requirement outside of downtown would have minor impact on cannabis entrepreneurs' ability to open new cannabis retail businesses in zoning districts that permit general retail, as seen in Map 2.

Map 2:  300-foot distance requirement - schools

Based on the findings of this spatial analysis, applying 300-foot distance requirement, would be consistent with the existing Comprehensive Plan as there would be ample opportunities to establish cannabis retail businesses in areas that are guided for commercial and industrial infill and growth.

While the State Law explicitly prohibits outdoor advertising of cannabis products and businesses, a 300-foot distance requirement may help limit school aged children's visual exposure to cannabis businesses, as well as mitigate other potential negative externalities associated with cannabis retail businesses. The proposed 300-foot distance requirement is both supportive of growing Northfield’s commercial base and falls within the range commonly found in other Minnesota and US cities.

The evaluation intentionally does not address a distance or separation requirement from residential treatment facilities based on several factors, including that residential treatment facilities establish their own standards for substance use, that there is no documented causative relationship between adult-use recreational cannabis use and substance use disorder, and that enforcement of such a relationship would be overly burdensome on city staff. Similarly, there is no provision for distance from a “park feature used by minor children.” State law prohibits the smoking and/or vaping of cannabis in the presence of minor children, therefore if cannabis smoking were to take place in, near, or around a park feature used by minor children a civil complaint could be filed.

Cannabis Cultivation:

There are six Office of Cannabis Management license types that allow cannabis and hemp cultivation, which includes any activity involving the planting, growing, harvesting, drying, curing, grading, or trimming of cannabis plants, cannabis flower, hemp plants, or hemp plant parts. The proposed amendments along with an analysis of the proposed changes follow.

Cannabis Microbusinesses and Mezzobusinesses

Cannabis Microbusiness and Mezzobusiness licenses allow businesses to engage in a wide range of business activities, including cannabis cultivation, retail sales, cannabis product manufacturing, and wholesale to other cannabis businesses with the applicable license endorsements. Additionally, Microbusinesses can obtain an endorsement to allow on-site consumption of cannabis products. The two license types differ in the amount of plant canopy they are permitted to have. Microbusinesses with a cultivation endorsement may cultivate up to 5,000 square feet of plant canopy indoors and up to one-half acre of mature, flowering plants outdoors. Mezzobusinesses may cultivate up to 15,000 square feet of plant canopy indoors and up to one-half acre of mature, flowering plants outdoors.

Cannabis micro-businesses and mezzo-businesses are substantially similar to industrial use (indoors), wholesale commercial uses, wholesale or commercial plant nurseries and greenhouses, garden and landscaping sales and service (depending on size) in their primary function, with any associated retail element covered under “cannabis retail” (see above). Industrial uses (indoor) and wholesale commercial uses accommodate a wide range of uses that occur “within a fully enclosed structure where noise, odor, light, or vibrations is not noticeable from the adjacent properties.” Both the industrial uses (indoor) and wholesale commercial use category accommodates small scale production uses that oftentimes sell products wholesale or directly to customers, like businesses with a cannabis micro or mezzo business license would be permitted to do.

To accommodate cannabis micro and mezzo businesses that cultivate cannabis indoors and/or manufacture cannabis products indoors, see the amendments addressed related to 2.9.10 Industrial uses (Indoors), which were included in Ordinance 1071, adopted in December 2024.

Industrial-Scale Cannabis Cultivation and Outdoor Cultivation of Cannabis

In addition to micro- and mezzobusinesses, two license types also permit businesses to cultivate cannabis at varying scales: Cannabis Cultivators and Medical Cannabis Combination Businesses. Except for a Medical Cannabis Combination Business, which may operate up to one retail location in each congressional district, these license types are only permitted to sell cannabis products to other businesses. When compared to cannabis micro and mezzo businesses, the amount of plant canopy that these businesses are allowed to cultivate is substantially higher, and more industrial scale in nature. Cannabis cultivators may cultivate up to 30,000 square feet of plant canopy indoors and up to two acres of mature flowering plants outdoors; Medical Cannabis Combination business may cultivate up to 60,000 square feet of medical cannabis plant canopy and up to 30,000 square feet of cannabis plant canopy for distribution into the adult-use (recreational) market based on prior year medical sales assessed annually.

While outdoor cultivation of cannabis in an urban context may be unlikely, there may be situations where outdoor cultivation is appropriate for a given location if potential externalities such as odors can be mitigated through site design or the location of the plant canopy. For example, outdoor cultivation of cannabis on rooftops may have limited impacts on neighboring properties. The proposed amendment would allow outdoor cultivation with a conditional use permit, except in residential districts where outdoor commercial cultivation would be prohibited. By requiring a conditional use permit, the Planning Commission can evaluate outdoor cultivation proposals to determine if the proposal is appropriate for its given location.

All of these uses are uses are substantially similar to the aforementioned uses cited under the Micro and Mezzobusiness section and to accommodate these businesses, staff have proposed the following addition/amendments, elements of which were adopted in Ordinance 1071.

The proposed amendment would prohibit commercial cannabis cultivation in residential districts. Under the proposed amendments outdoor commercial cannabis cultivation could occur in the agricultural, commercial, and industrial districts.

Cannabis and Hemp Product Manufacturing

The following license types permit the manufacturing of cannabis and hemp derived THC products: Cannabis micro- and mezzobusinesses, Cannabis Manufacturers, Medical Cannabis Combination Business, and Lower-potency Hemp Edible Manufacturer. Staff anticipates that a facility covering up to 15,000 square feet in land can accommodate small-scale cannabis and hemp product manufacturing uses under both micro- and mezzobusiness licenses. This type of smaller scale cannabis manufacturer falls within the amendments proposed by staff, above.

Some cannabis product manufacturing processes use liquified flammable gases such as butane and propane as solvents to extract THC from cannabis flower. If done improperly, the use of liquified flammable gases as an extraction agent poses some risk of fires and explosions at cannabis manufacturing facilities. While requirements in the building and fire codes will mitigate much of the risk of fires and explosions at legal facilities, restricting the use of these potentially dangerous chemicals in mixed-use and commercial districts may help protect residents from the impacts of potential fires and explosions, if they occur. In addition to the aforementioned amendments staff is recommending an amendment to define “volatile solvents”, which mirrors the state definition. Below is the “volatile solvents” definition amendment:

Volatile solvent. Any solvent that is or produces a flammable gas or vapor that, when present in the air in sufficient quantities, will create explosive or ignitable mixtures. Volatile solvent includes but is not limited to butane, hexane, and propane.

Because the OCM has not yet established a procedure for the registration and licensing of hemp-derived lower-potency hemp edible retail, these Land Development/Zoning regulations are structured to only apply to the new adult-use cannabis licenses types. Amendments to address lower-potency retail sales, which are permitted in tobacco shops, liquor stores, restaurants, coffee shops, grocery stores, and other retail establishments can be proposed to be adopted once the OCM has its process in place.

Other Cannabis-related Businesses

The following license types do not directly engage in public retail sales of cannabis or production/warehousing: Cannabis Delivery Service, Cannabis Transporter, Cannabis Testing Facilities, or Cannabis Event Organizers, but may be held by other license-type holders.

A cannabis event organizer license is required to organize a temporary cannabis event lasting no more than four days. No zoning amendment is recommended to accommodate cannabis events, as this is not in the purview of land use regulations and other events are not currently regulated by provisions in the Land Development Code.

Although Cannabis delivery service and cannabis transporters and testing facilities, are addressed in the state law, licenses do not expect to be issued until later in 2025. A cannabis delivery service would be licensed to deliver cannabis from cannabis retail uses directly to customers. Cannabis transporters would be licensed to transport cannabis between cannabis businesses, but not directly to customers. Cannabis delivery services or cannabis Transporters have been commonly proposed to occur as an accessory use to cannabis businesses. City staff recommends a similar approach and have designated those to be allowed only when accessory to a principal cannabis-related use in the accessory use table.

Cannabis testing facilities obtain and test cannabis and hemp products from other cannabis and hemp businesses. Testing facilities operate independently from other cannabis businesses and the State Law prohibits owners of cannabis testing facilities from owning, operating, or being employed by any other cannabis business. This use is likely substantially similar to personal services and offices, business or retail sales and service business use in Northfield’s Land Development Code. Staff will continue to evaluate the land development code to accommodate cannabis testing facilities.

The state law allows colleges and universities to cultivate cannabis for research purposes with a micro license. Most colleges and universities, however, are in residential districts. Staff recommends adding cannabis cultivation for research purposes as an accessory use in the college development district, which will allow colleges and universities to cultivate cannabis for research purposes if desired.

Attachments:

1.                     Office of Cannabis Management license types

2.                     Office of Cannabis Management guide

3.                     Draft Ordinance amending Chapter 34 - Land Development Code language

4.                     Draft Ordinances amending Chapter 30 - Registration and licensing Code language

Alternative Options:

There are no staff-recommended alternative options.

Financial Impacts:                     

The addition of cannabis retail and industry is likely to contribute to an increase in the collection of sales taxes, including the new cannabis sales tax, a portion of which will be remitted to the city and is likely to contribute to the addition of more commercial/industrial classified property leading to a shift in the share of the property tax burden and overall economic development for the city, county and state of Minnesota. In addition, the city will be able to collect licensing/registration fees and building permit fees for renovations and new construction establishments.

Tentative Timelines:                     

March 6, 2025:                     Public hearing notice published in the Northfield News

March 20, 2025:                      Public hearing, testimony and review by the Planning Commission

March 31, 2025:                      Presentation, Northfield Alliance for Substance Abuse Prevention (N-ASAP)

April 17, 2025:                     Recommendation made by the Planning Commission to City Council

May 6, 2025:                                           1st Reading at City Council

May 20, 2025:                      2nd Reading at City Council and summary publication

May 28, 2025:                      Summary publication in the Northfield News

June 29, 2025:                      Ordinance takes effect