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Home My WebLink About08-12-2024 CC Agenda Packet - work sessionAgenda City Council Work Session Monday, August 12, 2024, 5:00 PM City Council Chambers | 2780 Kelley Parkway, Orono, MN 55356 952-249-4600 /https://www.oronomn.gov/ 1. Cannabis Regulation Discussion 2. Average Lakeshore Setback (Part 5) Roll Call Work Session Item Adjournment Sign up for email notifications at https://www.oronomn.gov/ 1 Date: August 12, 2024 Item: 1 Presenter: Laura Oakden, Community Development Director Section: Work Session Item Title: Cannabis Regulation Discussion 1.Purpose: Inform the City Council on updated cannabis regulations and discuss next steps for implementing cannabis policies. 2.Background: Provide information to the council regarding updated cannabis regulations. This will include a review of the regulations from MN state requirements and guidance from Hennepin County for registration, enforcement and compliance, and zoning. 3.Staff Recommendation: Staff will present analysis and recommendations of the subject cannabis regulations. AGENDA ITEM COUNCIL ACTION REQUESTED Council should provided feedback and discuss the goals the Council has regarding cannabis regulations. Exhibits Minnesota OCM LG Guide 2 A Guide for Local Governments on Adult-Use Cannabis Version 1.2 June 25, 2024 3 Table of Contents Introduction ............................................................... 3 About OCM ............................................................... 4 Cannabis License Types ............................................. 5 Adult-Use Cannabis Law ........................................... 7 Cannabis Licensing Process........................................ 8 General Authorities .................................................. 10 Zoning and Land Use ................................................ 12 Local Approval Process ............................................. 15 Inspections and Compliance Checks ........................ 18 Municipal Cannabis Stores ...................................... 19 Creating Your Local Ordinance ............................... 20 Additional Resources ................................................ 21 4 Introduction This guide serves as a general overview of Minnesota’s new adult-use cannabis law, and how local governments can expect to be involved. The guide also provides important information about Minnesota’s new Office of Cannabis Management (OCM), and the office’s structure, roles, and responsibilities. While medical cannabis continues to play an important role in the state’s cannabis environment, this guide is primarily focused on the adult-use cannabis law and marketplace. The following pages outline the variety of cannabis business licenses that will be issued, provide a broad summary of important aspects of the adult-use cannabis law, and cover a wide range of expectations and authorities that relate to local governments. This guide also provides best practices and important requirements for developing a local cannabis ordinance. Chapter 342 of Minnesota law was established by the State Legislature in 2023 and was updated in 2024. Mentions of “adult-use cannabis law” or “the law” throughout this guide refer to Chapter 342 and the changes made to it. As of this guide’s date of publication, state regulations governing the adult-use cannabis market have not yet been published—this document will be updated when such regulations become effective. This guide is not a substitute for legal advice, nor does it seek to provide legal advice. Local governments and municipal officials seeking legal advice should consult an attorney. Page 3 5 About OCM Minnesota’s Office of Cannabis Management is the state regulatory office created to oversee the implementation and regulation of the adult-use cannabis market, the medical cannabis market, and the consumer hemp industry. Housed within OCM are the Division of Medical Cannabis (effective July 1, 2024), which operates the medical cannabis program, and the Division of Social Equity, which promotes development, stability, and safety in communities that have experienced a disproportionate, negative impact from cannabis prohibition and usage. OCM, through Chapter 342, is tasked with establishing rules and policy and exercising its regulatory authority over the Minnesota cannabis industry. In its duties, OCM is mandated to: Promote public health and welfare. Protect public safety. Eliminate the illicit market for cannabis flower and cannabis products. Meet the market demand for cannabis flower and cannabis products. Promote a craft industry for cannabis flower and cannabis products. Prioritize growth and recovery in communities that have experienced a disproportionate, negative impact from cannabis prohibition. OCM governs the application and licensing process for cannabis and hemp businesses, specific requirements for each type of license and their respective business activities, and conducts enforcement and inspection activities across the Minnesota cannabis and hemp industries. Page 4 6 License Types Minnesota law allows for 13 different types of business licenses, each fulfilling a unique role in the cannabis and hemp supply chain. In addition to license types below, OCM will also issue endorsements to license holders to engage in specific activities, including producing, manufacturing, and sale of medical cannabis for patients. Microbusiness Microbusinesses may cultivate cannabis and manufacture cannabis products and hemp products, and package such products for sale to customers or another licensed cannabis business. Microbusiness may also operate a single retail location. Mezzobusiness Mezzobusinesses may cultivate cannabis and manufacture cannabis products and hemp products, and package such products for sale to customers or another licensed cannabis business. Mezzobusiness may also operate up to three retail locations. Cultivator Cultivators may cultivate cannabis and package such cannabis for sale to another licensed cannabis business. Manufacturer Manufacturers may manufacture cannabis products and hemp products, and package such products for sale to a licensed cannabis retailer. Retailer Retailers may sell immature cannabis plants and seedlings, cannabis, cannabis products, hemp products, and other products authorized by law to customers and patients. Wholesaler Wholesalers may purchase and/or sell immature cannabis plants and seedlings, cannabis, cannabis products, and hemp products from another licensed cannabis business. Wholesalers may also import hemp-derived consumer products and lower-potency hemp edibles. Page 5 7 License Types (continued) Transporter Transporters may transport immature cannabis plants and seedlings, cannabis, cannabis products, and hemp products to licensed cannabis businesses. Testing Facility Testing facilities may obtain and test immature cannabis plants and seedlings, cannabis, cannabis products, and hemp products from licensed cannabis businesses. Event Organizer Event organizers may organize a temporary cannabis event lasting no more than four days. Delivery Service Delivery services may purchase cannabis, cannabis products, and hemp products from retailers or cannabis business with retail endorsements for transport and delivery to customers. Medical Cannabis Combination Business Medical cannabis combination businesses may cultivate cannabis and manufacture cannabis and hemp products, and package such products for sale to customers, patients, or another licensed cannabis business. Medical cannabis combination businesses may operate up to one retail location in each congressional district. Lower-Potency Hemp Edible Manufacturer Lower-potency hemp edible manufacturers may manufacture and package lower-potency hemp edibles for consumer sale, and sell hemp concentrate and lower-potency hemp edibles to other cannabis and hemp businesses. Lower-Potency Hemp Edible Retailer Lower-potency hemp edible retailers may sell lower-potency hemp edibles to customers. Each license is subject to further restrictions on allowable activities. Maximum cultivation area and manufacturing allowances vary by license type. Allowable product purchase, transfer, and sale between licensees are subject to restrictions in the law. Page 6 8 The Adult-Use Cannabis Law Minnesota’s new adult-use cannabis law permits the personal use, possession, and transportation of cannabis by those 21 years of age and older, and allows licensed businesses to conduct cultivation, manufacturing, transport, delivery, and sale of cannabis and cannabis products. For Individuals Possession limits: Flower - 2 oz. in public, 2 lbs. in private residence Concentrate - 8 g Edibles (including lower-potency hemp) - 800 mg THC Consumption only allowed on private property or at licensed businesses with on-site consumption endorsements. Consumption not allowed in public. Gifting cannabis to another individual over 21 years old is allowed, subject to possession limits. Home cultivation is limited to four mature and four immature plants (eight total) in a single residence. Plants must be in an enclosed and locked space. Home extraction using volatile substances (e.g., butane, ethanol) is not allowed. Unlicensed sales are not allowed. For Businesses Advertising: May not include or appeal to those under 21 years old. Must include proper warning statements. May not include misleading claims or false statements. Billboards are not allowed. The flow of all products through the supply chain must be tracked by the state-authorized tracking system. All products sold to consumers and patients must be tested for contaminants. Home delivery is allowed by licensed businesses. Page 7 9 The Cannabis Licensing Process An applicant will take the following steps to proceed from application to active licensure. As described, processes vary depending on social equity status and/or whether the type of license being sought is capped or uncapped in the general licensing process. License Preapproval: Early Mover Process for Social Equity Applicants The license preapproval process is a one-time application process available for verified social equity applicants. State law requires OCM to open the application window on July 24, 2024, and close the window on August 12, 2024. The preapproval process is available for the following license types, and all are capped in this process: microbusiness, mezzobusiness, cultivator, retailer, wholesaler, transporter, testing facility, and delivery service. Applicant’s social equity applicant (SEA) status verified. Complete application and submit application fees. Application vetted for minimum requirements by OCM. Application (if qualified) entered into lottery drawing. If selected in lottery, OCM completes background check of selected applicant and issues license preapproval. Applicant with license preapproval* submits business location and amends application accordingly. OCM forwards completed application to local government. Local government completes certification of zoning compliance. OCM conducts site inspection. When regulations are adopted, license becomes active, operations may commence. *For social equity applicants with license preapproval for microbusiness, mezzobusiness, or a cultivator license, they may begin growing cannabis plants prior to the adoption of rules if OCM receives approval from local governments in a form and manner determined by the office. This is only applicable to cultivation and does not authorize retail sales or other endorsed activities of the licenses prior to the adoption of rules. Preapproval steps: Page 8 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 10 The Cannabis Licensing Process (cont.) The general licensing process will align with the adoption of rules and OCM will share more information about the timing of general licensing process. The general licensing process includes social equity applicants and non-social equity applicants. General Licensing: Cultivator, Manufacturer, Retailer, Mezzobusiness Complete application and submit application fees. Application vetted for minimum requirements by OCM. Application (if qualified) entered into lottery drawing. If selected in lottery, OCM completes background check of selected applicant and issues preliminary approval. Applicant with preliminary approval submits business location and amends application accordingly. OCM forwards completed application to local government. Local government completes certification of zoning compliance. OCM conducts site inspection. License becomes active, operations may commence.* General Licensing: Microbusiness, Wholesaler, Transporter, Testing Facility, Event Organizer Complete application and submit application fees.1. Application vetted for minimum requirements by OCM.2. For qualified applicants, OCM completes background check of vetted applicant and issues preliminary approval. 3. Selected applicant submits business location and amends application accordingly.4. OCM forwards completed application to local government.5. Local government completes certification of zoning compliance.6. OCM conducts site inspection.7. License becomes active, operations may commence.*8. 1. 2. 3. 4. 5. 6. 7. 8. 9. *For businesses seeking a retail endorsement (microbusiness, mezzobusiness, and retailer), a valid local retail registration is required prior to the business commencing any retail sales. See Page 16 for information on the local retail registration process. Page 9 11 General Authorities Local governments in Minnesota have various means of oversight over the cannabis market, as provided by the adult-use cannabis law. Local governments may not issue outright bans on cannabis business, or limit operations in a manner beyond what is provided by state law. Cannabis Retail Restrictions (342.13) Local governments may limit the number of retailers and microbusiness/mezzobusinesses with retail endorsements allowed within their locality, as long as there is at least one retail location per 12,500 residents. Local units of government are not obligated to seek out a business to register as cannabis business if they have not been approached by any potential applicants, but cannot prohibit the establishment of a business if this population requirement is not met. Local units of government may also issue more than the minimum number of registrations. Per statutory direction, a municipal cannabis store (Page 19) cannot be included in the minimum number of registrations required. For population counts, the state demographer estimates will likely be utilized. Tribal Governments (342.13) OCM is prohibited from and will not issue state licenses to businesses in Indian Country without consent from a tribal nation. Tribal nations hold the authority to license tribal cannabis businesses on tribal lands – this process is separate than OCM’s licensing process and authority. Subject to compacting, Tribal nations may operate cannabis businesses off tribal lands. There will be more information available once the compacting processes are complete. Taxes (295.81; 295.82) Retail sales of taxable cannabis products are subject to the state and local sales and use tax and a 10% gross receipts tax. Cannabis gross receipts tax proceeds are allocated as follows: 20% to the local government cannabis aid account and 80% to the state general fund. Local taxes imposed solely on sale of cannabis products are prohibited. Cannabis retailers will be subject to the same real property tax classification as all other retail businesses. Real property used for raising, cultivating, processing, or storing cannabis plants, cannabis flower, or cannabis products for sale will be classified as commercial and industrial property. Page 10 12 General Authorities (cont.) Retail Timing Restrictions (342.13) Local governments may prohibit retail sales of cannabis between the hours of 8 a.m. and 10 a.m. Monday-Saturday, and 9 p.m. and 2 a.m. the following day. Operating Multiple Locations with One License Certain cannabis licenses allow for multiple retail locations to be operated under a single license, with the following limitations: Retailers: up to five retail locations. Mezzobusinesses: up to three retail locations. Microbusinesses: up to one retail location. Medical cannabis combination businesses: one retail location per congressional district. Additionally, medical cannabis combination businesses may cultivate at more than one location within other limitations on cultivation. For all other license types, one license permits the operation of one location. Each retail location requires local certification and/or registration. Page 11 13 Zoning and Land Use Buffer Guidelines (342.13) State law does not restrict how a local government conducts its zoning designations for cannabis businesses, except that they may prohibit the operation 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 playgrounds and athletic fields. Zoning Guidelines While each locality conducts its zoning differently, a few themes have emerged across the country. For example, cannabis manufacturing facilities are often placed in industrial zones, while cannabis retailers are typically found in commercial/retail zones. Cannabis retail facilities align with general retail establishments and are prohibited from allowing consumption or use onsite, and are also required to have plans to prevent the visibility of cannabis and hemp-derived products to individuals outside the retail location. Industrial hemp is an agricultural product, and should be zoned as such. Cannabis businesses should be zoned under existing zoning ordinances in accordance with the license type or endorsed activities held by the cannabis business. Note that certain types of licenses may be able to perform multiple activities which may have different zoning analogues. In the same way municipalities may zone a microbrewery that predominately sells directly to onsite consumers differently than a microbrewery that sells packaged beer to retailers and restaurants, so too might a municipality wish to zone two microbusinesses based on the actual activities that each business is undertaking. Table 1, included on Pages 13 and 14, explains the types of activities that cannabis businesses might undertake, as well as, some recommended existing zoning categories. Page 12 14 Endorsed Activity License Type Eligible to Do Endorsed Activity Description of Activity Comparable Districts Municipal Considerations Cultivation Cultivator Mezzobusiness Microbusiness Medical Cannabis Combination "Cultivation" means any activity involving the planting, growing, harvesting, drying, curing, grading, or trimming of cannabis plants, cannabis flower, hemp plants, or hemp plant parts. Indoor: Industrial, Commercial, Production Outdoor: Agricultural Odor Potential need for transportation from facility Waste, water, and energy usage Security Cannabis Manufacturing, Processing, Extraction Manufacturer Mezzobusiness Microbusiness Medical Cannabis Combination This group of endorsed activities turn raw, dried cannabis and cannabis parts into other types of cannabis products, e.g. edibles or topicals. Industrial, Commercial, Production Odor Potential need for transportation from facility Waste, water, and energy usage Security Hemp Manufacturing Lower-Potency Hemp Edible (LPHE) Manufacturing These business convert hemp into LPHE edible prodcuts. Industrial, Commercial, Production Odor Waste, water, and energy Wholesale Wholesale Cultivator Manufacturer Mezzobusiness Microbusiness Medical Cannabis Combination This activity and license type allows a business to purchase from a business growing or manufacturing cannabis or cannabis products and sell to a cannabis business engaged in retail. Industrial, Commercial, Production Need for transportation from facility Security Page 13 Zoning and Land Use (cont.) Table 1: Cannabis and Hemp Business Activities 15 Page 14 Endorsed Activity License Type Eligible to Do Endorsed Activity Description of Activity Comparable Districts Municipal Considerations Cannabis Retail Retailer Mezzobusiness Microbusiness Medical Cannabis Combination This endorsed activity and license types allow a business to sell cannabis and cannabis products directly to consumers. Retail, Neighborhood Shopping Districts, Light Industrial, Existing districts where off-sale liquor or tobacco sales are allowed. Micros may offer onsite consumption, similar to breweries. Micros and Mezzos may include multiple activities: cultivation, manufacture, and/or retail. Transportation Cannabis Transporter This license type allows a company to transport products from one license type to another. Fleet based business that will own multiple vehicles, but not necessarily hold a substantial amount of cannabis or cannabis products. Delivery Cannabis Delivery This license type allows for transportation to the end consumer. Fleet based business that will own multiple vehicles, but not necessarily hold a substantial amount of cannabis or cannabis products. Events Event Organizer This license entitles license holder to organizer a temporary event lasting no more than four days. Anywhere that the city permits events to occur, subject to other restrictions related to cannabis use. On site consumption. Retail sales by a licensed or endorsed retail business possible. Zoning and Land Use (cont.) Table 1: Cannabis and Hemp Business Activities (continued) 16 Local Approval Process Local governments play a critical role in the licensing process, serving as a near-final approval check on cannabis businesses nearing the awarding of a state license for operations. Once an applicant has been vetted by OCM and is selected for proceeding in the verification process, they are then required to receive the local government’s certification of zoning compliance and/or local retail registration before operations may commence. Local Certification of Zoning Compliance (342.13; 342.14) Following OCM’s vetting process, local governments must certify that the applicant with preliminary approval has achieved compliance with local zoning ordinances prior to the licensee receiving final approval from OCM to commence operations. During the application and licensing process for cannabis businesses, OCM will notify a local government when an applicant intends to operate within their jurisdiction and request a certification as to whether a proposed cannabis business complies with local zoning ordinances, and if applicable, whether the proposed business complies with state fire code and building code. According to Minnesota’s cannabis law, a local unit of government has 30 days to respond to this request for certification of compliance. If a local government does not respond to OCM’s request for certification of compliance within the 30 days, the cannabis law allows OCM to issue a license. OCM may not issue the final approval for a license if the local government has indicated they are not in compliance. OCM will work with local governments to access the licensing software system to complete this zoning certification process. Page 15 17 Local Approval Process (cont.) Local Retail Registration Process (342.22) Once the licensing process begins, local government registration applies to cannabis retailers or other cannabis/hemp businesses seeking a retail endorsement. Local governments must issue a retail registration after verifying that: The business has a valid license or license preapproval issued by OCM. The business has paid a registration fee or renewal fee to the local government; Initial registration fees collected by a local government may be $500 or half the amount of the applicable initial license fee, whichever is less, and renewal registration fees may be $1,000 or half the amount of the applicable renewal license fee, whichever is less. The business is found to be in compliance with Chapter 342 and local ordinances. If applicable, the business is current on all property taxes and assessments for the proposed retail location. Local registrations may also be issued by counties if the respective local government transfers such authorities to the county. Determining a Process for Limiting Retail Registrations If a local government wishes to place a limitation on the number of retailers and microbusiness/mezzobusinesses with retail endorsements allowed within their locality (as long as there is at least one retail location per 12,500 residents, see Page 10), state law does not define the process for a local government’s selection if there are more applicants than registrations available. A few options for this process include the use of a lottery, a first-come/first-serve model, a rolling basis, and others. Local governments should work with an attorney to determine their specific process for selection if they wish to limit the number of licensed cannabis retailers per 342.13. Local governments are not required to limit the number of licensed cannabis retailers. Page 16 18 Local Approval Process (cont.) Local governments are permitted specific authorities for registration refusal and registration suspension, in addition to—and not in conflict with—OCM authorities. Registration and Renewal Refusals Local governments may refuse the registration and/or certification of a license renewal if the license is associated with an individual or business who no longer holds a valid license, has failed to pay the local registration or renewal fee, or has been found in noncompliance in connection with a preliminary or renewal compliance check. Local Registration Suspension (342.22) Local governments may suspend the local retail registration of a cannabis business or hemp business if the business is determined to not be operating in compliance with a local ordinance authorized by 342.13 or if the operation of the business poses an immediate threat to the health and safety of the public. The local government must immediately notify OCM of the suspension if it occurs. OCM will review the suspension and may reinstate the registration or take enforcement action. Expedited Complaint Process (342.13) Per state law, OCM will establish an expedited complaint process during the rulemaking process to receive, review, read, and respond to complaints made by a local unit of government about a cannabis business. Upon promulgation of rules, OCM will publish the complaint process. At a minimum, the expedited complaint process shall require the office to provide an initial response to the complaint within seven days and perform any necessary inspections within 30 days. Within this process, if a local government notifies OCM that a cannabis business poses an immediate threat to the health or safety of the public, the office must respond within one business day. Page 17 19 Inspections & Compliance Checks Local governments are permitted specific business inspection and compliance check authorities, in addition to—and not in conflict with—OCM authorities. Inspections and Compliance Checks (342.22) Local governments must conduct compliance checks for cannabis and hemp businesses holding retail registration at least once per calendar year. These compliance checks must verify compliance with age verification procedures and compliance with any applicable local ordinance established pursuant to 342.13. OCM maintains inspection authorities for all cannabis licenses to verify compliance with operation requirements, product limits, and other applicable requirements of Chapter 342. Page 18 20 Municipal Cannabis Stores State law requires OCM issue a license to a city or county seeking to operate a single municipal cannabis store if the city or county: As authorized in Chapter 342.32, local governments are permitted to apply for a cannabis retail license to establish and operate a municipal cannabis store. Submits required application information to OCM, Meets minimum requirements for licensure, and Pays applicable application and license fee. A municipal cannabis store will not be included in the total count of retail licenses issued by the state under Chapter 342. A municipal cannabis store cannot be counted as retail registration for purposes of determining whether a municipality’s cap on retail registrations imposed by ordinance. Page 19 21 Creating Your Local Ordinance Local governments may not prohibit the possession, transportation, or use of cannabis, or the establishment or operation of a cannabis business licensed under state law. Local governments may adopt reasonable restrictions on the time, place, and manner of cannabis business operations (see Page 11). Local governments may adopt interim ordinances to protect public safety and welfare, as any studies and/or further considerations on local cannabis activities are being conducted, until January 1, 2025. A public hearing must be held prior to adoption of an interim ordinance. If your local government wishes to operate a municipal cannabis store, the establishment and operation of such a facility must be considered in a local ordinance. As authorized in 342.13, a local government may adopt a local ordinance regarding cannabis businesses. Establishing local governments’ ordinances on cannabis businesses in a timely manner is critical for the ability for local cities or towns to establish local control as described in the law, and is necessary for the success of the statewide industry and the ability of local governments to protect public health and safety. The cannabis market’s potential to create jobs, generate revenue, and contribute to economic development at the local and state level is supported through local ordinance work. The issuance of local certifications and registrations to prospective cannabis businesses is also dependent on local ordinances. Model Ordinance For additional guidance regarding the creation of a cannabis related ordinance, please reference the addendum in this packet. Page 20 22 Additional Resources OCM Toolkit for Local Partners Please visit OCM webpage (mn.gov/ocm/local-governments/) for additional information, including a toolkit of resources developed specifically for local government partners. The webpage will be updated as additional information becomes available and as state regulations are adopted. These resources are also included in the addendum of this packet. Toolkit resources include: Appendix A: Model Ordinance Appendix B: Hemp Flower and Hemp-Derived Cannabinoid Product Checklist Appendix C: Enforcement Notice from the Office of Cannabis Management Appendix D: Notice to Unlawful Cannabis Sellers Local Organizations There are several organizations who also have developed resources to support local governments regarding the cannabis industry. Please feel free to contact the following for additional resources: League of Minnesota Cities Association of Minnesota Counties Minnesota Public Health Law Center Page 21 23 Appendix A: Model Ordinance 24 Cannabis Model Ordinance The following model ordinance is meant to be used as a resource for cities, counties, and townships within Minnesota. The italicized text in red is meant to provide commentary and notes to jurisdictions considering using this ordinance and should be removed from any ordinance formally adopted by said jurisdiction. Certain items are not required to be included in the adopted ordinance: ‘OR’ and (optional) are placed throughout for areas where a jurisdiction may want to consider one or more choices on language. Section 1 Administration Section 2 Registration of Cannabis Business Section 3 Requirements for a Cannabis Business (Time, Place, Manner) Section 4 Temporary Cannabis Events Section 5 Lower Potency Hemp Edibles Section 6 Local Government as a Retailer Section 7 Use of Cannabis in Public AN ORDINANCE OF THE (CITY/COUNTY OF ______) TO REGULATE CANNABIS BUSINESSES The (city council/town board/county board) of (city/town/county) hereby ordains: Section 1. Administration 1.1 Findings and Purpose (insert local authority) makes the following legislative findings: The purpose of this ordinance is to implement the provisions of Minnesota Statutes, chapter 342, which authorizes (insert local authority) to protect the public health, safety, welfare of (insert local here) residents by regulating cannabis businesses within the legal boundaries of (insert local here). (insert local authority) finds and concludes that the proposed provisions are appropriate and lawful land use regulations for (insert local here), that the proposed amendments will promote the community's interest in reasonable stability in zoning for now and in the future, and that the proposed provisions are in the public interest and for the public good. 1.2 Authority & Jurisdiction A county can adopt an ordinance that applies to unincorporated areas and cities that have delegated authority to impose local zoning controls. (insert local authority) has the authority to adopt this ordinance pursuant to: a) Minn. Stat. 342.13(c), regarding the authority of a local unit of government to adopt reasonable restrictions of the time, place, and manner of the operation of 25 a cannabis business provided that such restrictions do not prohibit the establishment or operation of cannabis businesses. b) Minn. Stat. 342.22, regarding the local registration and enforcement requirements of state-licensed cannabis retail businesses and lower-potency hemp edible retail businesses. c) Minn. Stat. 152.0263, Subd. 5, regarding the use of cannabis in public places. d) Minn. Stat. 462.357, regarding the authority of a local authority to adopt zoning ordinances. Ordinance shall be applicable to the legal boundaries of (insert local here). (Optional) (insert city here) has delegated cannabis retail registration authority to (insert county here). However, (insert city here) may adopt ordinances under Sections (2.6, 3 and 4) if (insert county here) has not adopted conflicting provisions. 1.3 Severability If any section, clause, provision, or portion of this ordinance is adjudged unconstitutional or invalid by a court of competent jurisdiction, the remainder of this ordinance shall not be affected thereby. 1.4 Enforcement The elected body of a jurisdiction can choose to designate an official to administer and enforce this ordinance. The (insert name of local government or designated official) is responsible for the administration and enforcement of this ordinance. Any violation of the provisions of this ordinance or failure to comply with any of its requirements constitutes a misdemeanor and is punishable as defined by law. Violations of this ordinance can occur regardless of whether or not a permit is required for a regulated activity listed in this ordinance. 1.5 Definitions 1. Unless otherwise noted in this section, words and phrases contained in Minn. Stat. 342.01 and the rules promulgated pursuant to any of these acts, shall have the same meanings in this ordinance. 2. Cannabis Cultivation: A cannabis business licensed to grow cannabis plants within the approved amount of space from seed or immature plant to mature plant. harvest cannabis flower from mature plant, package and label immature plants and seedlings and cannabis flower for sale to other cannabis businesses, transport cannabis flower to a cannabis manufacturer located on the same premises, and perform other actions approved by the office. 3. Cannabis Retail Businesses: A retail location and the retail location(s) of a mezzobusinesses with a retail operations endorsement, microbusinesses with a retail operations endorsement, medical combination businesses operating a retail location, (and/excluding) lower-potency hemp edible retailers. 26 4. Cannabis Retailer: Any person, partnership, firm, corporation, or association, foreign or domestic, selling cannabis product to a consumer and not for the purpose of resale in any form. 5. Daycare: A location licensed with the Minnesota Department of Human Services to provide the care of a child in a residence outside the child's own home for gain or otherwise, on a regular basis, for any part of a 24-hour day. 6. Lower-potency Hemp Edible: As defined under Minn. Stat. 342.01 subd. 50. 7. Office of Cannabis Management: Minnesota Office of Cannabis Management, referred to as “OCM” in this ordinance. 8. Place of Public Accommodation: A business, accommodation, refreshment, entertainment, recreation, or transportation facility of any kind, whether licensed or not, whose goods, services, facilities, privileges, advantages or accommodations are extended, offered, sold, or otherwise made available to the public. 9. Preliminary License Approval: OCM pre-approval for a cannabis business license for applicants who qualify under Minn. Stat. 342.17. 10. Public Place: A public park or trail, public street or sidewalk; any enclosed, indoor area used by the general public, including, but not limited to, restaurants; bars; any other food or liquor establishment; hospitals; nursing homes; auditoriums; arenas; gyms; meeting rooms; common areas of rental apartment buildings, and other places of public accommodation. 11. Residential Treatment Facility: As defined under Minn. Stat. 245.462 subd. 23. 12. Retail Registration: An approved registration issued by the (insert local here) to a state- licensed cannabis retail business. 13. School: A public school as defined under Minn. Stat. 120A.05 or a nonpublic school that must meet the reporting requirements under Minn. Stat. 120A.24. 14. State License: An approved license issued by the State of Minnesota’s Office of Cannabis Management to a cannabis retail business. Section 2. Registration of Cannabis Businesses A city or town can delegate authority for registration to the County. A city or town can still adopt specific requirement regarding zoning, buffers, and use in public places, provided said requirements are not in conflict with an ordinance adopted under the delegated authority granted to the County. 2.1 Consent to registering of Cannabis Businesses No individual or entity may operate a state-licensed cannabis retail business within (insert local here ) without first registering with (insert local here). Any state-licensed cannabis retail business that sells to a customer or patient without valid retail registration shall incur a civil penalty of (up to $2,000) for each violation. Notwithstanding the foregoing provisions, the state shall not issue a license to any cannabis business to operate in Indian country, as defined in United States Code, title 18, section 1151, of a Minnesota Tribal government without the consent of the Tribal government. 27 2.2 Compliance Checks Prior to Retail Registration A jurisdiction can choose to conduct a preliminary compliance check prior to issuance of retail registration. Prior to issuance of a cannabis retail business registration, (insert local here) (shall/shall not) conduct a preliminary compliance check to ensure compliance with local ordinances. Pursuant to Minn. Stat. 342, within 30 days of receiving a copy of a state license application from OCM, (insert local here) shall certify on a form provided by OCM whether a proposed cannabis retail business complies with local zoning ordinances and, if applicable, whether the proposed business complies with the state fire code and building code. 2.3 Registration & Application Procedure 2.3.1 Fees. (insert local here) shall not charge an application fee. A registration fee, as established in (insert local here )’s fee schedule, shall be charged to applicants depending on the type of retail business license applied for. An initial retail registration fee shall not exceed $500 or half the amount of an initial state license fee under Minn. Stat. 342.11, whichever is less. The initial registration fee shall include the initial retail registration fee and the first annual renewal fee. Any renewal retail registration fee imposed by (insert local here) shall be charged at the time of the second renewal and each subsequent renewal thereafter. A renewal retail registration fee shall not exceed $1,000 or half the amount of a renewal state license fee under Minn. Stat. 342.11, whichever is less. A medical combination business operating an adult-use retail location may only be charged a single registration fee, not to exceed the lesser of a single retail registration fee, defined under this section, of the adult-use retail business. 2.3.2 Application Submittal. The (insert local here) shall issue a retail registration to a state-licensed cannabis retail business that adheres to the requirements of Minn. Stat. 342.22. (A) An applicant for a retail registration shall fill out an application form, as provided by the (insert local here). Said form shall include, but is not limited to: i. Full name of the property owner and applicant; ii. Address, email address, and telephone number of the applicant; iii. The address and parcel ID for the property which the retail registration is sought; iv. Certification that the applicant complies with the requirements of local ordinances established pursuant to Minn. Stat. 342.13. v. (Insert additional standards here) (B) The applicant shall include with the form: 28 i. the application fee as required in [Section 2.3.1]; ii. a copy of a valid state license or written notice of OCM license preapproval; iii. (Insert additional standards here) (C) Once an application is considered complete, the (insert local government designee) shall inform the applicant as such, process the application fees, and forward the application to the (insert staff/department, or elected body that will approve or deny the request) for approval or denial. (D) The application fee shall be non-refundable once processed. 2.3.3 Application Approval (A) (Optional) A state-licensed cannabis retail business application shall not be approved if the cannabis retail business would exceed the maximum number of registered cannabis retail businesses permitted under Section 2.6. (B) A state-licensed cannabis retail business application shall not be approved or renewed if the applicant is unable to meet the requirements of this ordinance. (C) A state-licensed cannabis retail business application that meets the requirements of this ordinance shall be approved. 2.3.4 Annual Compliance Checks. The (insert local here) shall complete at minimum one compliance check per calendar year of every cannabis business to assess if the business meets age verification requirements, as required under [Minn. Stat. 342.22 Subd. 4(b) and Minn. Stat. 342.24] and this/these [chapter/section/ordinances]. The (insert local here ) shall conduct at minimum one unannounced age verification compliance check at least once per calendar year. Age verification compliance checks shall involve persons at least 17 years of age but under the age of 21 who, with the prior written consent of a parent or guardian if the person is under the age of 18, attempt to purchase adult-use cannabis flower, adult-use cannabis products, lower-potency hemp edibles, or hemp-derived consumer products under the direct supervision of a law enforcement officer or an employee of the local unit of government. Any failures under this section must be reported to the Office of Cannabis Management. 2.3.5 Location Change A jurisdiction may decide to treat location changes as a new registration, or alternatively treat a location change as allowable subject to compliance with the rest of the registration process. A state-licensed cannabis retail business shall be required to submit a new application for registration under Section 2.3.2 if it seeks to move to a new location still within the legal boundaries of (insert local here). 29 or If a state-licensed cannabis retail business seeks to move to a new location still within the legal boundaries of (insert local here), it shall notify (insert local here) of the proposed location change, and submit necessary information to meet all the criteria in this paragraph. 2.4 Renewal of Registration The (insert local here) shall renew an annual registration of a state-licensed cannabis retail business at the same time OCM renews the cannabis retail business’ license. A state-licensed cannabis retail business shall apply to renew registration on a form established by (insert local here). A cannabis retail registration issued under this ordinance shall not be transferred. 2.4.1 Renewal Fees. The (insert local here) may charge a renewal fee for the registration starting at the second renewal, as established in (insert local here)’s fee schedule. 2.4.2 Renewal Application. The application for renewal of a retail registration shall include, but is not limited to: • Items required under Section 2.3.2 of this Ordinance. • Insert additional items here 2.5 Suspension of Registration 2.5.1 When Suspension is Warranted. The (insert local here) may suspend a cannabis retail business’s registration if it violates the ordinance of (insert local here) or poses an immediate threat to the health or safety of the public. The (insert local here) shall immediately notify the cannabis retail business in writing the grounds for the suspension. 2.5.2 Notification to OCM. The (insert local here) shall immediately notify the OCM in writing the grounds for the suspension. OCM will provide (insert local here) and cannabis business retailer a response to the complaint within seven calendar days and perform any necessary inspections within 30 calendar days. 2.5.3 Length of Suspension. A jurisdiction can wait for a determination from the OCM before reinstating a registration. The suspension of a cannabis retail business registration may be for up to 30 calendar days, unless OCM suspends the license for a longer period. The business may not make sales to customers if their registration is suspended. 30 The (insert local here ) may reinstate a registration if it determines that the violations have been resolved. The (insert local here) shall reinstate a registration if OCM determines that the violation(s) have been resolved. 2.5.4 Civil Penalties. Subject to Minn. Stat. 342.22, subd. 5(e) the (insert local here) may impose a civil penalty, as specified in the (insert local here)’s Fee Schedule, for registration violations, not to exceed $2,000. 2.6 Limiting of Registrations A jurisdiction may choose to set a limit on the number of retail registrations within its boundaries. The jurisdiction may not however, limit the number of registrations to fewer than one per 12,500 residents. (Optional) The (insert local here) shall limit the number of cannabis retail businesses to no fewer than one registration for every 12,500 residents within (insert local legal boundaries here). (Optional) If (insert county here) has one active cannabis retail businesses registration for every 12,500 residents, the (insert local here) shall not be required to register additional state-licensed cannabis retail businesses. (Optional) The (insert local here) shall limit the number of cannabis retail businesses to (insert number <= minimum required). Section 3. Requirements for Cannabis Businesses State Statutes note that jurisdictions may “adopt reasonable restrictions on the time, place, and manner of the operation of a cannabis business.” A jurisdiction considering other siting requirements (such as a buffer between cannabis businesses, or a buffer from churches) should consider whether there is a basis to adopt such restrictions. 3.1 Minimum Buffer Requirements A jurisdiction can adopt buffer requirements that prohibit the operation of a cannabis business within a certain distance of schools, daycares, residential treatment facilities, or from an attraction within a public park that is regularly used by minors, including a playground or athletic field. Buffer requirements are optional. A jurisdiction cannot adopt larger buffer requirements than the requirements here in Section 3.1. A jurisdiction should use a measuring system consistent with the rest of its ordinances, e.g. from lot line or center point of lot. (Optional) The (insert local here) shall prohibit the operation of a cannabis business within [0-1,000] feet of a school. 31 (Optional) The (insert local here) shall prohibit the operation of a cannabis business within [0-500] feet of a day care. (Optional) The (insert local here) shall prohibit the operation of a cannabis business within [0-500] feet of a residential treatment facility. (Optional) The (insert local here) shall prohibit the operation of a cannabis business within [0-500] feet of an attraction within a public park that is regularly used by minors, including a playground or athletic field. (Optional) The (insert local here) shall prohibit the operation of a cannabis retail business within [X] feet of another cannabis retail business. Pursuant to Minn. Stat. 462.367 subd. 14, nothing in Section 3.1 shall prohibit an active cannabis business or a cannabis business seeking registration from continuing operation at the same site if a (school/daycare/residential treatment facility/attraction within a public park that is regularly used by minors) moves within the minimum buffer zone. 3.2 Zoning and Land Use For jurisdictions with zoning, said jurisdiction can limit what zone(s) Cannabis businesses can operate in. As with other uses in a Zoning Ordinance, a jurisdiction can also determine if such use requires a Conditional or Interim Use permit. A jurisdiction cannot outright prohibit a cannabis business. A jurisdiction should amend their Zoning Ordinance and list what zone(s) Cannabis businesses are permitted in, and whether they are permitted, conditional, or interim uses. While each locality conducts its zoning differently, a few themes have emerged across the country. For example, cannabis manufacturing facilities are often placed in industrial zones, while cannabis retailers are typically found in commercial/retail zones. Cannabis retail facilities align with general retail establishments and are prohibited from allowing consumption or use onsite and are also required to have plans to prevent the visibility of cannabis and hemp-derived products to individuals outside the retail location. Cannabis businesses should be zoned under existing zoning ordinances in accordance with the license type or endorsed activities held by the cannabis business. 3.2.1. Cultivation. Cannabis businesses licensed or endorsed for cultivation are permitted as a (type of use) in the following zoning districts: • (Insert zoning districts use is permitted in here) • (Insert zoning districts use is permitted in here) 3.2.1. Cannabis Manufacturer. Cannabis businesses licensed or endorsed for cannabis manufacturer are permitted as a (type of use) in the following zoning districts: • (Insert zoning districts use is permitted in here) • (Insert zoning districts use is permitted in here) 32 3.2.1. Hemp Manufacturer. Businesses licensed or endorsed for low-potency hemp edible manufacturers permitted as a (type of use) in the following zoning districts: • (Insert zoning districts use is permitted in here) • (Insert zoning districts use is permitted in here) 3.2.1. Wholesale. Cannabis businesses licensed or endorsed for wholesale are permitted as a (type of use) in the following zoning districts: • (Insert zoning districts use is permitted in here) • (Insert zoning districts use is permitted in here) 3.2.1. Cannabis Retail. Cannabis businesses licensed or endorsed for cannabis retail are permitted as a (type of use) in the following zoning districts: • (Insert zoning districts use is permitted in here) • (Insert zoning districts use is permitted in here) 3.2.1. Cannabis Transportation. Cannabis businesses licensed or endorsed for transportation are permitted as a (type of use) in the following zoning districts: • (Insert zoning districts use is permitted in here) • (Insert zoning districts use is permitted in here) 3.2.1. Cannabis Delivery. Cannabis businesses licensed or endorsed for delivery are permitted as a (type of use) in the following zoning districts: • (Insert zoning districts use is permitted in here) • (Insert zoning districts use is permitted in here) 3.3 Hours of Operation A jurisdiction may adopt an ordinance limiting hours of operation between 10 a.m. and 9 p.m., seven days a week, and that State statute prohibits the sale of cannabis between 2 a.m. and 8 a.m., Monday through Saturday, and between 2 a.m. and 10 a.m. on Sundays. (Optional) Cannabis businesses are limited to retail sale of cannabis, cannabis flower, cannabis products, lower-potency hemp edibles, or hemp-derived consumer products between the hours of (insert time here) and (insert time here). 3.4 (Optional) Advertising Cannabis businesses are permitted to erect up to two fixed signs on the exterior of the building or property of the business, unless otherwise limited by (insert local here)’s sign ordinances. 33 Section 4. Temporary Cannabis Events Any individual or business seeking to obtain a cannabis event license must provide OCM information about the time, location, layout, number of business participants, and hours of operation. A cannabis event organizer must receive local approval, including obtaining any necessary permits or licenses issued by a local unit of government before holding a cannabis event. 4.1 License or Permit Required for Temporary Cannabis Events 4.1.1 License Required. A cannabis event organizer license entitles the license holder to organize a temporary cannabis event lasting no more than four days. A jurisdiction should determine what type of approval is consistent with their existing ordinances for events. A license or permit is required to be issued and approved by (insert local here) prior to holding a Temporary Cannabis Event. 4.1.2 Registration & Application Procedure A registration fee, as established in (insert local here)’s fee schedule, shall be charged to applicants for Temporary Cannabis Events. 4.1.3 Application Submittal & Review. The (insert local here) shall require an application for Temporary Cannabis Events. (A) An applicant for a retail registration shall fill out an application form, as provided by the (insert local here). Said form shall include, but is not limited to: i. Full name of the property owner and applicant; ii. Address, email address, and telephone number of the applicant; iii. (Insert additional standards here) (B) The applicant shall include with the form: i. the application fee as required in (Section 4.1.2); ii. a copy of the OCM cannabis event license application, submitted pursuant to 342.39 subd. 2. The application shall be submitted to the (insert local authority), or other designee for review. If the designee determines that a submitted application is incomplete, they shall return the application to the applicant with the notice of deficiencies. (C) Once an application is considered complete, the designee shall inform the applicant as such, process the application fees, and forward the application to the (insert staff/department, or elected body that will approve or deny the request) for approval or denial. (D) The application fee shall be non-refundable once processed. (E) The application for a license for a Temporary Cannabis Event shall meet the following standards: 34 A jurisdiction may establish standards for Temporary cannabis events which the event organizer must meet, including restricting or prohibiting any on-site consumption. If there are public health, safety, or welfare concerns associated with a proposed cannabis event, a jurisdiction would presumably be authorized to deny approval of that event. • Insert standards here (G) A request for a Temporary Cannabis Event that meets the requirements of this Section shall be approved. (H) A request for a Temporary Cannabis Event that does not meet the requirements of this Section shall be denied. The (insert city/town/county) shall notify the applicant of the standards not met and basis for denial. (Optional) Temporary cannabis events shall only be held at (insert local place). (Optional) Temporary cannabis events shall only be held between the hours of (insert start time) and (insert stop time). Section 5. (Optional) Lower-Potency Hemp Edibles A jurisdiction can establish different standards or requirements regarding Low-Potency Edibles. A jurisdiction can consider including the following section and subsections in their cannabis ordinance. 5.1 Sale of Low-Potency Hemp Edibles The sale of Low-Potency Edibles is permitted, subject to the conditions within this Section. 5.2 Zoning Districts If sales are permitted, a jurisdiction can limit what zone(s) the sales of Low-Potency Edibles can take place in. A jurisdiction can also determine if such activity requires a Conditional or Interim Use permit. Low-Potency Edibles businesses are permitted as a (type of use) in the following zoning districts: • (Insert zoning districts use is permitted in here) • (Insert zoning districts use is permitted in here) 5.3 (Optional) Additional Standards 5.3.1 Sales within Municipal Liquor Store. A jurisdiction that already operates a Municipal Liquor Store may sell Low-Potency Edibles within the same store. The sale of Low-Potency Edibles is permitted in a Municipal Liquor Store. 5.3.2 Age Requirements. A jurisdiction is able to restrict the sale of Low-Potency Edibles to locations such as bars. 35 The sale of Low-Potency Edibles is permitted only in places that admit persons 21 years of age or older. 5.3.3 Beverages. The sale of Low-Potency Hemp Beverages is permitted in places that meet requirements of this Section. 5.3.4 Storage of Product. A jurisdiction is able to set requirements on storage and sales of Low-Potency Edibles. Low-Potency Edibles shall be sold behind a counter, and stored in a locked case. Section 6. (Optional) Local Government as a Cannabis Retailer (insert local here) may establish, own, and operate one municipal cannabis retail business subject to the restrictions in this chapter. The municipal cannabis retail store shall not be included in any limitation of the number of registered cannabis retail businesses under Section 2.6. (insert local here) shall be subject to all same rental license requirements and procedures applicable to all other applicants. Section 7 Use in Public Places No person shall use cannabis flower, cannabis products, lower-potency hemp edibles, or hemp-derived consumer products in a public place or a place of public accommodation unless the premises is an establishment or an event licensed to permit on-site consumption of adult-use. 36 Appendix B: Hemp Flower and Hemp- Derived Cannabinoid Product Checklist 37 Hemp Flower and Hemp-Derived Cannabinoid Product Checklist 1 Office of Cannabis Management Department of Health Hemp Flower and Hemp-Derived Cannabinoid Product Checklist Minnesota Statute 18K.02, Definitions Minnesota Statute 152.01, Subdivision 9 Minnesota Statute 151.72, Sale of Certain Cannabinoid Products Minnesota Statute 152.0264, Cannabis Sale Crimes Minnesota Statute 342.09, Personal Adult Use of Cannabis Question Yes No Comments Additional Information Business License and Registration Compliance Is the business registered with the Minnesota Department of Health? All businesses selling hemp-derived cannabinoid products must be registered. See Hemp-Derived Cannabinoid Products (www.health.state.mn.us/people/cannabis/edibles/index.html) If the business offers on-site consumption, do they have a liquor license? Local authorities issue on-site consumption licenses. These are required for all businesses permitting on-site consumption of THC. Product Compliance – All Products Does the business ensure that all sales are made to persons 21 years old or older? Only persons 21 years of age or older may purchase hemp- derived cannabinoid products, with the exception of topicals. These products may be sold to anyone. Does the business have all edible cannabinoid products, except beverages, behind the counter or in a locked cabinet? Businesses must ensure all edible cannabinoid products are secure and inaccessible to customers. 38 Hemp Flower and Hemp-Derived Cannabinoid Product Checklist 2 Question Yes No Comments Additional Information Only delta-8 and delta-9 are allowed for human consumption. Does the business sell edibles or beverages with any other intoxicating cannabinoids? MDH has identified products containing many different intoxicating cannabinoids, such as HHC, THC-O, THC-P, PHC, delta-10, delta-11, delta-8p, delta-9p, etc. The product must contain only delta-8 and/or delta-9. Does the business sell any edible products that are similar to a product marketed to or consumed by children? Edible products that appear similar to candy or snacks marketed toward or consumed by children are not allowed. Does the label on the edible or beverage state “Keep out of reach of children”? All products must include the warning label “Keep out of reach of children.” Is the manufacturer’s name, address, website, and contact phone number included on the label or provided through a QR code? If not, the product is not in compliance. Does the QR code on the product bring the user to a Certificate of Analysis on the website, which includes the name of the independent testing laboratory, cannabinoid profile, and product batch number? All products must be tested by batch in an independent, accredited laboratory. The results must include the cannabinoid profile. Does the label on the product indicate the cannabinoids by serving and in total? The label must indicate the potency by individual serving as well as in total. 39 Hemp Flower and Hemp-Derived Cannabinoid Product Checklist 3 Question Yes No Comments Additional Information Does the label on the product make any claim the product offers any kind of health benefit? Health claims are not permitted on hemp or cannabis products unless approved by the FDA. At this time, there is not an approved statement. Does the label on the product state that the product does not claim to diagnose, treat, cure or prevent any disease? The manufacturer cannot claim the product will provide any health benefit unless the product has been formally approved by the FDA. Does the business sell CBD (or other forms of cannabidiol) in the form of a softgel, tablet, or tincture? Non-intoxicating cannabinoids may only be sold in the form of an edible, beverage, or topical. Therefore, softgels and tablets cannot be sold. Tinctures must be labeled as either an edible or beverage and comply with the edible or beverage requirements. Product Compliance – Edibles Does the edible product contain more than 5 mg delta-8 and/or delta-9 per serving? Edibles may not exceed 5 mg delta-8 and/or delta-9 per serving. Does the edible product package/container contain more than 50 mg total THC (delta-8 and/or delta-9)? Edibles may not exceed 50 mg total delta-8 or delta-9 per package. The edible cannot contain any other form of THC or intoxicating cannabinoid. Are all the edible product’s servings clearly marked, wrapped, or scored on the product? Edible product servings must be clearly distinguished on the product. Bulk products that require the consumer to measure are not allowed. 40 Hemp Flower and Hemp-Derived Cannabinoid Product Checklist 4 Question Yes No Comments Additional Information Does the business sell any edible products in the shape of bears, worms, fruits, rings, ribbons? Edibles in shapes that appeal to children are not allowed. Is the edible product in a child- proof, tamper-evident, opaque container? All edibles must be in a container that is child-resistant and tamper evident. If the container is clear, the business must place the edible into an opaque bag at the point of sale. Clear bags are not allowed. Product Compliance - Beverages Does the beverage product contain more than 5 mg delta-8 or delta-9 per serving? Beverages may not exceed 5 mg delta-8 and/or delta-9 per serving. Does the beverage product contain more than 2 servings? Beverages cannot exceed two servings, regardless of the THC potency. Is the beverage product in an opaque container? If the beverage is in a clear container, the business must place the beverage in an opaque bag at the point of sale. Product Compliance – Smokables (non-flower) Does the business sell vapes, pre- rolls, dabs, or other smokable products which contain more than 0.3% THC? A product’s certificate of analysis will show the concentration of THC the product contains. The certificate typically is found through the QR code on the product package. In MDH’s experience, most vapes contain 50% - 90%+ THC. Pre-rolls may consist of raw hemp flower. These products are not regulated by 151.72. However, if a pre-roll is labeled as “infused” or “coated” have additional cannabinoids applied to the material, of which the product typically exceeds the 0.3% THC limit. 41 Hemp Flower and Hemp-Derived Cannabinoid Product Checklist 5 Question Yes No Comments Additional Information Does the business sell vapes, pre- rolls, dabs, or other smokeable products that contain other intoxicating cannabinoids, such as HHC? MN Statutes do not allow any cannabinoid, other than delta-8 or delta-9, to be sold if the cannabinoid is intended to alter the structure or function of the body. HHC is a cannabinoid known to have potency greater than THC. Does the business sell vapes, pre- rolls, dabs, or other smokable products which contain CBD? Non-intoxicating cannabinoids cannot be smoked, vaped, or inhaled. Product Compliance – Flower Does the business sell raw hemp flower? Raw hemp flower must contain 0.3% or less of delta-9 on a dry weight basis. Products exceeding 0.3% delta-9 dry weight are marijuana, and are illegal for sale. THC-A is the non psychoactive precursor to delta-9. Once heated THC-A converts to delta-9. In that process some amount of THC-A is lost. To determine whether, once heated, the hemp flower will exceed the allowable 0.3% of delta-9, one can use a decarboxylation formula which takes into account the conversion of THC-A into delta-9. That formula is as follows: Total THC = (0.877 X THC-A) + d-9 THC) Raw flower must include a certificate of analysis to show testing below 0.3% delta-9. • A lack of a certificate of analysis would constitute an illegal sale. 42 Hemp Flower and Hemp-Derived Cannabinoid Product Checklist 6 Question Yes No Comments Additional Information • A certificate of analysis showing that under the decarboxylation formula that delta-9 would exceed the 0.3% threshold would also indicate the flower is cannabis and not hemp and therefore being sold illegally. Product Compliance – On-Site Consumption If the business offers on-site consumption, do they serve the edible or beverage in its original packaging? The business may not pour out or remove an edible from its original packaging. If the business offers on-site consumption, do they mix a cannabis-infused beverage with alcohol? The business may not mix cannabis-infused products with alcohol. If the business offers on-site consumption, do they permit customers to remove from the premises products which have been removed from their original packaging? Products which have been removed from their original packaging cannot be removed from the premises by the customer. NOTE: If a person suspects that a hemp-derived cannabinoid product is being sold in violation of Minnesota law, they can use the complaint form at Submitting Hemp-Derived Cannabinoid Product Complaints (www.health.state.mn.us/people/cannabis/edibles/complaints.html). 43 Appendix C: Enforcement Notice from the Office of Cannabis Management 44 Enforcement Notice 1 Enforcement Notice from the Office of Cannabis Management Dear Registered Hemp Derived Cannabinoid Business: The Office of Cannabis Management (OCM), established in 2023, is charged with developing and implementing the operational and regulatory systems to oversee the cannabis industry in Minnesota as provided in Minnesota Statutes Chapter 342. When Minnesota legalized the sale of adult-use of cannabis flower, cannabis products, and lower-potency hemp edibles/ hemp-derived consumer products, the Minnesota Legislature included statutory provisions, Minnesota Statutes, chapter 152.0264, making the sale of cannabis illegal until a business is licensed by OCM. The Office of Cannabis Management has not yet issued licenses for the cultivation, manufacture, wholesale, transportation or retail sale of cannabis, therefore any retail sales of cannabis products, including cannabis flower, are illegal. The Office of Cannabis Management has received complaints of retailers selling cannabis flower under the label of hemp flower. Under an agreement between The Minnesota Department of Health (MDH) and OCM, inspectors from MDH will begin to examine any flower products being sold during their regular inspections to determine whether they are indeed hemp flower or cannabis flower. In distinguishing between hemp and cannabis flower, OCM, consistent with federal rules and regulations related to hemp under 7 CFR 990.1, will consider the total concentration of THC post- decarboxylation, which is the process by which THC-A is converted into Delta-9 to produce an intoxicating effect. The examination of raw flower products will include reviewing the certificate of analysis for compliance in several areas, including: Compliance with the requirement that raw flower listed for sale includes a Certificate of Analysis (COA). Products for sale without a COA will constitute an illegal sale. A COA that affirms concentrations of 0.3% or less of Delta-9 on a dry weight basis. Products exceeding 0.3% Delta-9 dry weight are considered marijuana and are therefore illegal to sell. A COA that confirms that the total levels of Delta-9 and THC-A after the decarboxylation process do not exceed 0.3%. A COA that indicates the raw flower will exceed 0.3 percent Delta-9 post-decarboxylation, or a subsequent test conducted by an independent laboratory utilized by OCM that confirms Delta-9 in excess of 0.3 percent will be considered illegal. Minnesota Statutes, Chapter 342 governs Minnesota’s cannabis market, and empowers OCM to ensure regulatory compliance. Minnesota Statutes, chapter 342.09, subdivision 4 prohibits the retail sale of cannabis flower and cannabis products “without a license issued under this chapter that authorizes the sale.” 45 Enforcement Notice 2 To date, the Office of Cannabis Management has not issued any cannabis licenses, applications for licenses are expected to be available in the first half of 2025. As such, selling cannabis is a clear violation of law. Be aware that under Minnesota Statutes, 342.09, subdivision 6, OCM may assess fines in excess of a $1 million for violations of this law. Likewise, under Minnesota Statutes, chapter 342.19, OCM is empowered to embargo any product that it has “probable cause to believe . . . is being distributed in violation of this chapter or rules adopted under this chapter[.]” Furthermore, violations of law may be considered in future licensing decisions made by OCM. As inspectors enter the field, we encourage you to review the products you are currently selling to ensure they fall within the thresholds outlined above. If you have any questions related to the products you are selling, please send an email to cannabis.info@state.mn.us. Thank you for your attention to this matter. Charlene Briner Interim Director Office of Cannabis Management 46 Appendix D: Notice to Unlawful Cannabis Sellers 47 Notice to Unlawful Cannabis Sellers This notice is to inform you that your current course of action may run afoul of Minnesota law, and continuing this course of action may result in civil actions and potential criminal prosecution. To avoid such outcomes, you should immediately cease and desist any plans to engage in the unlicensed sale of cannabis and cannabis products. Minnesota Statutes, Chapter 342 (www.revisor.mn.gov/statutes/cite/342) governs Minnesota’s cannabis market, and empowers OCM to ensure regulatory compliance. Minnesota Statutes, chapter 342.09, subdivision 4 (www.revisor.mn.gov/statutes/cite/342.09#stat.342.09.4) prohibits the retail sale of cannabis flower and cannabis products “without a license issued under this chapter that authorizes the sale.” To date the Office of Cannabis Management has not issued any retail, or other, cannabis licenses. As such, your plan to sell cannabis in a retail setting at this date would be in flagrant violation of the law. Be aware that under Minnesota Statutes, 342.09, subdivision 6 (www.revisor.mn.gov/statutes/cite/342.09#stat.342.09.6), OCM may assess fines in excess of a $1,000,000 for violations of this law. Likewise, under Minnesota Statutes, chapter 342.19 (www.revisor.mn.gov/statutes/cite/342.19), OCM is empowered to embargo any product that it has “probable cause to believe . . . is being distributed in violation of this chapter or rules adopted under this chapter[.]” It is believed that products attempted to be sold at your retail location might be distributed in violation of the law, and would therefore be subject to embargo by OCM. Under Minnesota Statutes, chapter 342.19, subd. 2 (www.revisor.mn.gov/statutes/cite/342.19#stat.342.19.2), once embargoed OCM “shall release the cannabis plant, cannabis flower, cannabis product, artificially derived cannabinoid, lower-potency hemp edible, or hemp-derived consumer product when this chapter and rules adopted under this chapter have been complied with or the item is found not to be in violation of this chapter or rules adopted under this chapter.” While Minnesota has legalized the sale of adult-use of cannabis flower, cannabis products, lower-potency hemp edibles, or hemp-derived consumer products, the legislature did add new statutory provisions, Minnesota Statutes, chapter 152.0264 (www.revisor.mn.gov/statutes/cite/152.0264), making illegal the unlawful sale of cannabis. As there are not yet any licenses issued by OCM for the cultivation, manufacture, wholesale, transportation, or retail of cannabis, any sales of cannabis products in excess of the limits in 152.0264 is illegal. If you are only planning to sell cannabinoid products that are derived from hemp, you should ensure that the sale of those products is consistent with Minnesota Statutes, chapter 151.72 (www.revisor.mn.gov/statutes/cite/151.72), including but not limited to the requirement that your business be registered with the Commissioner of Health, and that all products are in compliance with the relevant statutes. Finally, in addition to the state laws outlined above, please be aware that any retail location must be in compliance with local government ordinances and zoning requirements. OCM takes seriously its charge to enforce Minnesota Statutes, Chapter 342, and its responsibility to ensure a safe and legal cannabis market. In order to avoid the above-described actions, all attempts to open a cannabis retail dispensary in Minnesota without the appropriate license should be ceased. 48 Date: August 12, 2024 Item: 2 Presenter: Laura Oakden, Community Development Director Section: Work Session Item Title: Average Lakeshore Setback (Part 5) 1.Background: Average lakeshore setback (ALS) regulations have been discussed during recent council work sessions. Staff was directed to evaluate the current regulations. The ALS is applied to views of the lake across neighboring property lines. The city also implements a minimum lake setback that is measured from the Ordinary High Water Line (OHWL). The lake setback for Lake Minnetonka is 75 feet from the OHWL. Both the lakeshore setback and the ALS apply to lakeshore properties. The more restrictive setback is applied to a subject parcel. Council directed staff at the June 2024 work session to draft an amendment to the ALS. The proposed amendment would only apply the ALS when a building improvement is being proposed within the lake setback. Buildings and improvements being constructed that meeting the lake setback on the property would not have the ALS apply. This would alleviate many of the variance applications that are bring processed and provide development guidance for nonconforming lakeshore properties. Staff will present draft an ALS amendment and an outline to a public hearing process that allows for additional public notice for the proposed code change. 2.Staff Recommendation: Staff will present analysis and recommendations of the subject City Code regulations. AGENDA ITEM COUNCIL ACTION REQUESTED Council should provided feedback and discuss the goal and intent of the ordinance. Exhibits 8.14.23 ALS Discussion- PT 1 11.13.23 ALS Discusion - Pt 2 2.12.24 ALS Discussion- pt.3 6.10.24 ALS Discussion- pt.4 49 Average Lakeshore Setback Discussion City Council Worksession 8/14/2023 50 City Code Section 78-1279 (6) Average lakeshore setback.No principal or accessory building shall be located closer to the Ordinary High Water Line (OHWL) than the average distance from the shoreline of existing principal buildings on adjacent lots; This does not apply to patios and other accessory structures less than 42 inches above existing grade, and/or stairways, lifts, landings, lockboxes, flagpoles and pump houses. Further, the average lakeshore setback shall apply only to classified lakes and shall not apply to tributaries. The average lakeshore setback line shall be a straight line connecting the most lakeward protrusions of the principal buildings on the immediately adjacent lakeshore lots. a)In situations where improvement is proposed on a lot adjacent to a vacant lot or right-of-way, the average lake shore setback shall be equivalent to the setback of the most lakeward protrusion of the principal building on the immediately adjacent improved lakeshore lot. b)In situations where the average lake shore setback line bisects the principal building located on either adjacent lot, the next most adjacent lake side point of the bisected principal building shall be used for determining the average lakeshore setback. If the line continues to bisect the principal building, the next most lakeside point is to be used until the setback line does not bisect the principal building on an adjacent lot. 51 ALS vs 75’ Lakeshore Setback •The 75’ Lakeshore Setback is a measured setback from the 929.4 Ordinary High Water Level (OHWL)to restrict development in order to protect the lake. •This setback can vary depending on the classification of lake -up to 150’ setback can apply •The ALS is a sightline setback intended to protect the neighbor's views of the lake. •The more restrictive of the two setbacks is applied. 52 Orono City Limits: Forest Lake Lakeshore 53 54 55 56 ALS Variances Granted 2021-12 ALS Variances 2022-7 ALS Variances 2023-10 ALS Variances (through the end of July) 57 Neighboring Cities City Do they implement a sightline setback? (In addition to a OHWL setback) Do they follow a similar formula as Orono for determining the setback Do they grant variance from their sightline protection ordinance? Minnetonka Beach Yes. (Recently amended in 2023)A line is drawn from building to building to determine the ALS as well as a separate deck to deck line is drawn. No Wayzata Yes A line is drawn between the principle buildings AND the average distance is calculated based on the principle buildings. The MORE restrictive is applied. Rarely-Maybe 1 Variance a year Minnetrista Yes A line is drawn between the principle buildings AND the average distance is calculated based on the principle buildings. The LESS restrictive is applied. Additionally if the abutting neighbor is over 200’ from the OHWL, it is excluded. No Spring Park No Follow at 50’ lakeshore setback from the OHWL. Some exceptions for deck encroachments N/A Victoria No N/A N/A Deephaven No They only follow a 100’ lakeshore setback from the OHWL N/A Shorewood No N/A N/A 58 Key Differences •Half of the responding cities rely solely on the Lakeshore Setback from the OHWL and do not implement a sightline setback (ALS). •Some cities exclude properties based on their extreme setbacks. •Not all cities use a drawn line, some use a calculated average. ALS 59 Items to Consider •Orono has a lot of lakeshore and most of it is not a straight line. •There are special considerations when reviewing and granting ALS variances. •Range of Situations: •Double frontage Lots •Non-lakeshore lots abutting lakeshore properties •Channels •Timing of development •Is the ALS achieving the intent of the council? 60 Points of Discussion •Should the City’s role be, to protect a resident’s views across a neighbor’s property. •Structures vs Landscaping? •If so, is the current ALS regulation the best way to address the protection of neighbor’s views? 61 Average Lakeshore Setback Discussion-Continued City Council Work Session 11/13/2023 62 City Code Section 78-1279 (6) Average lakeshore setback.No principal or accessory building shall be located closer to the Ordinary High Water Line (OHWL) than the average distance from the shoreline of existing principal buildings on adjacent lots; This does not apply to patios and other accessory structures less than 42 inches above existing grade, and/or stairways, lifts, landings, lockboxes, flagpoles and pump houses. Further, the average lakeshore setback shall apply only to classified lakes and shall not apply to tributaries. The average lakeshore setback line shall be a straight line connecting the most lakeward protrusions of the principal buildings on the immediately adjacent lakeshore lots. a)In situations where improvement is proposed on a lot adjacent to a vacant lot or right-of-way, the average lake shore setback shall be equivalent to the setback of the most lakeward protrusion of the principal building on the immediately adjacent improved lakeshore lot. b)In situations where the average lake shore setback line bisects the principal building located on either adjacent lot, the next most adjacent lake side point of the bisected principal building shall be used for determining the average lakeshore setback. If the line continues to bisect the principal building, the next most lakeside point is to be used until the setback line does not bisect the principal building on an adjacent lot. 63 Purpose Lakeshore Setback The Lakeshore Setback is a measured setback from the 929.4'Ordinary High Water Level (OHWL)contour restricting development near the lake in order to protect water quality. •Natural Environment (e.g. Lake Classen & French Lake): 150’ •Recreational Development (e.g. Long Lake): 75’/100’ •General Development (e.g. Lake Minnetonka): 75’ Average Lakeshore Setback The ALS is a sightline setback intended to protect the neighbors views of the lake over a subject property. •No Building permitted in the setback •Accessory structures are permitted if they are under 42” in height from grade. •The setback is determined based on the location of the neighboring homes on each side of the subject property. *Because there are two, the more restrictive setback gets applied to determine the building setback. 64 Questions Posed to the CC: •Does the current ALS achieve the intent of the Council? •Should the City’s role be to protect a resident’s views across a neighbor’s property? •If so, is the current ALS regulation the best way to address the protection of neighbor’s views? 65 ALS Impact Challenges -The ordinance language is cumbersome for residents and staff to interpret and apply -Over time can substantially limit the buildable envelope of a parcel -The setback changes whenever an abutting parcel redevelops or changes (i.e. deck, addition, new home, new lot creation) -Common error on surveys, leads to multiple submittals by applicants and reviews by staff -Many variances granted each year •15 Variances have been granted through October of this year 66 Summary from City Council Discussion Results: -ALS further limits massing away from the shoreline -Higher level of protection of the lakeshore -Strives to creates uniformity between neighbors -Unique for every parcel -Protects neighboring views of the lake -Higher standard above and beyond DNR model ordinance 67 Option 1: Recalculate the ALS with abutting neighbors Use the average distances measured from the two abutting homes to find a numerical average setback from the OHWL for the subject property. a.Pros: i.Creates a measured distance setback from the OHWL ii.Follows the shoreline and could allow for a more uniform building envelope iii.Resolves issues on peninsulas and bays b.Cons: i.Setback is still determined by location of the neighbors ii.Discrepancies in setbacks will continue to be challenging iii.Could allow homes to be built forward of the neighbor’s homes impacting views c.Questions: i.This could be an alternative way to measure in lieu of our current practice. Allowing residents to use the less restrictive of the two.68 Option 2: Create an Exception for homes over 300’ from the lake a.Pros:i.Keeps the existing definitionii.Eliminates some extreme setbacks from the equationiii.Minimal impact as this scenario as this layout is not common around the lakeb.Cons: i.Allows for building in front of a neighbors homesii.Setback is still based on neighboring homesiii.Does not fix the challenges with a curvy lakeshore and peninsulasiv.Creates another cumbersome exception to the setbackc.Questionsi.Is 300’ the right number? Will there ever be a right number? ii.Does it serve the purpose for the regulation? 69 Option 3: Allow decks to encroach A deck is considered to be a part of the principal structure and currently must adhere to the ALS. A deck is also used as the closest point for measurement. a.Pros: i.Eliminates variances for specific improvements ii.Keeps the intent of keeping building massing away from the lake b.Cons: i.Still based on neighboring homes ii.Does not fix the challenges with a curvy lakeshore/peninsulas iii.Creates another cumbersome exception to the setback iv.Allows for closer encroachments towards the lake v.Decks can still impact a view to the lake 70 Option 4: Eliminate Average Lakeshore Setback a.Pros: i.Lake quality is still protected by lakeshore setback. ii.Simplifies the development of the property iii.Consistent with other neighboring lakeshore cities iv.Eliminates a lot of variance applications v.Removes the neighboring properties’ perceived “rights” over property they do not own. b.Cons: i.Allows for development closer to the lakeshore ii.Could impact existing lake views 71 Option 5: No Change to Code a.Pros:i.Residents and stakeholders are familiar with our code and restrictionsii.Continue to systematically push development further from the lakeiii.Additional setback in place to preserve lake quality (not the purpose for the regulation)b.Cons: i.Requires a lot of variancesii.Average lakeshore setback variances are more subjective and not generally approved based on practical difficulty. Making it difficult for staff to provide a predicable outcome. This creates inconsistency in approvals throughout city based on neighbor input.iii.Relies too much on “Are the neighbors okay with it?”, too subjective.iv.Preserves a right to a view over another’s property. 72 Staff’s Recommendation A.Eliminate the ALS •This is staff preferred option. •The ALS intent is to protect viewsheds which is subject and not the goal of the City Council B.Recalculate the ALS to a measured average from the OHWL •Can maintain some setback uniformity along the lakeshore •Using a measured distance from the OHWL could help alleviate the need for variances on curving lakeshore with bays and peninsulas. 73 Items to Consider •Does the Council feel a changes in necessary to the ordinance? •What is the goal of the ordinance? •Next Steps: •Council should discuss a recommendation and direct staff to draft proposed language. 74 Average Lakeshore Setback Discussion-Part 3 City Council Work Session 02/12/2024 75 City Code Section 78-1279 (6) Average lakeshore setback.No principal or accessory building shall be located closer to the Ordinary High Water Line (OHWL) than the average distance from the shoreline of existing principal buildings on adjacent lots; this does not apply to patios and other accessory structures less than 42 inches above existing grade, and/or stairways, lifts, landings, lockboxes, flagpoles and pump houses. Further, the average lakeshore setback shall apply only to classified lakes and shall not apply to tributaries. The average lakeshore setback line shall be a straight line connecting the most lakeward protrusions of the principal buildings on the immediately adjacent lakeshore lots. a)In situations where improvement is proposed on a lot adjacent to a vacant lot or right-of-way, the average lake shore setback shall be equivalent to the setback of the most lakeward protrusion of the principal building on the immediately adjacent improved lakeshore lot. b)In situations where the average lake shore setback line bisects the principal building located on either adjacent lot, the next most adjacent lake side point of the bisected principal building shall be used for determining the average lakeshore setback. If the line continues to bisect the principal building, the next most lakeside point is to be used until the setback line does not bisect the principal building on an adjacent lot. 76 Restrictions to Lake Lots Lake Setback The Lake Setback is a measured setback from the 929.4'Ordinary High Water Level (OHWL)contour restricting development near the lake to protect water quality. This includes prohibiting buildings, structures and hardcover improvements (exceptions include lake stairs) •General Development (e.g. Lake Minnetonka): 75’ •Natural Environment (e.g. Lake Classen & French Lake): 150’ •Recreational Development (e.g. Long Lake): 75’/100’ Average Lakeshore Setback (ALS) The ALS is a sightline setback intended to protect views of the lake, including views across a neighbor’s property. •Accessory structures (pools, patios, retaining walls) are permitted if they are under 42” in height from grade. •The setback is determined based on the location of the neighboring homes. •Because there are two lake setbacks, the more restrictive setback is applied to determine the building setback . Hardcover •Hardcover allowance for an individual property is based on the assigned tier within the Stormwater Quality Overlay District. •Majority of the properties abutting the lakes and protected tributaries are classified as Tier 1 and are limited to 25% hardcover. •Hardcover means a hard surface that prevents or retards entry of water into the soil and causes water to run off the surface in greater quantities and at an increased rate of flow than prior to development. Hardcover shall include but not be limited to the following: all building footprints, driveways, sidewalks, stepping stones, retaining walls, patios, courts (sport, tennis, etc.), decks, pools, areas used for the extended outdoor storage of vehicles or equipment, and all other similar features or surfaces as determined by the city engineer or city planner. 77 ALS History -(1992) Ord 101, 2nd Series -Adopting of the DNR Model Shoreland Regulations -(2004) Ord 11, 3rd Series -Add exceptions to allow for administrative approval by staff with written neighbors consent -(2013) Ord 106, 3rd Series -Add flagpoles and pump houses as exceptions to the definition -(2015) Ord 157, 3rd Series-Remove the administrative approval process, created the exceptions for a flat measurement when abutting ROW and for structures under 42” in height to be allowed within the ALS -(2018) Ord 222, 3rd Series -Change the terminology from “structures” to “buildings” as regulated within the ALS. -(2019) Ord 234, 3rd Series -Add an exception for situations where the ALS line cuts through a home on the adjacent affected lots 78 ALS Challenges and Impacts Challenges -The ordinance language is cumbersome for staff and residents to interpret and apply -Over time can substantially limit the buildable envelope of a parcel -The setback changes whenever an abutting parcel redevelops or changes (i.e. deck, addition, new home) -Common error on surveys, leads to multiple submittals and reviews by staff -Shoreline inconsistencies make the setback hard to apply (peninsulas, inlets, etc) -In 2024, 43% of variance applications received included a ALS variance. -The city received 44 variance applications and 19 requests for ALS variances. Results -ALS further limits massing away from the shoreline -Creates a stricter setback and a higher level of protection of the lakeshore -Strives to creates uniformity between neighbors -Unique for every parcel -Protects neighboring views of the lake -Higher standard above and beyond DNR model ordinance 79 Options to Consider: •Option 1: Recalculate the ALS using abutting neighbors •Option 2: Create an Exception for homes over 300’ from the lake •Option 3: Allow decks (any height) to encroach •Option 4: Eliminate Average Lakeshore Setback •Option 5: No Change to Code The following slides reflect Staff’s analysis of recent ALS variances to show the different options for recalculating the ALS could be applied. 80 2605 Mapleridge Lane-Addition LA23-000066 Average Lakeshore Setback variance requested for remodel and addition of existing home •ALS 1: Leave ALS as is (red line) •ALS 2: Eliminate the ALS, setback determined by required 75’ lake setback (yellow line) •ALS 3: Calculate the average(blue line) and allow the less restrictive to determine the setback •In this scenario the original measurement of ALS is less restrictive 81 2605 Mapleridge Lane-Addition LA23-000066 •Current ALS line (red line) bisects the home •Averaging the neighboring setbacks creates a more strict ALS than the current regulation in this case Neighbor #1 –187’ from OHWL Neighbor #2 –167.2’ from OHWL Average –177.1’ from OHWL (blue line) Current ALS –about 140’ from OHWL Neighbor #1 Neighbor #2 75’ Lake Setback Current ALS Calculated ALS 82 Average Lakeshore Setback variance requested for the construction of a new home •ALS 1: Leave ALS as is (red line) •ALS 2: Eliminate the ALS, setback determined by the required lake setback (yellow line) •ALS 3: Eliminate neighbor that is over 300’ from OHWL from calculation (green line) •ALS 4: Calculate the average (blue line) and allow the less restrictive to determine the setback •While in this case the calculated average is less restrictive, variances would likely still be needed for the construction of a new home 3400 Fox Street-New Home LA23-000068 83 3400 Fox Street-New Home LA23-000068 •Current ALS line (red) makes the lot unbuildable •Eliminate the abutting home over 300’ from the lake (green line) •Averaging the neighboring home distances creates a less strict ALS than the current regulation Neighbor #1 -325’ from OHWL Neighbor #2 –158’ from OHWL (green line) Average –241.5’ from OHWL (blue line) measured from both the lake and channel 75’ Lake Setback Current ALS Calculated ALS Neighbor #1 Neighbor #2 84 3600 Casco Avenue-New House LA23-000060 Average Lakeshore Setback variance requested for the construction of a new home •ALS 1: Leave ALS as is (red line) •ALS 2: Eliminate the ALS, setback determined by the required lake setback (yellow line) •ALS 3: Calculate the average (blue line) and allow the less restrictive to determine the setback •While in this case it is less restrictive, variances would still be needed for the construction of a new home 85 3600 Casco Avenue-New House LA23-000060 •Current ALS line (red) •Averaging the neighboring distances creates a less strict ALS than the current regulation Neighbor #1 -250.4’ from OHWL Neighbor #2 –115.1’ from OHWL Average –182.8’ from OHWL (blue line) Current ALS –about 203’ from OHWL Neighbor #1 Neighbor #2 75’ Lake Setback Calculated ALS Current ALS 86 559 Park Lane-Deck LA23-000033 Average Lakeshore Setback variance requested for the construction of a deck •ALS 1: Leave ALS as is (red line) •ALS 2: Eliminate the ALS, setback determined by required lake setback (yellow line) •ALS 3: Calculate the average (blue line) and allow the less restrictive to determine the setback •In this case the calculated average is slightly less restrictive but the difference is minimal. Following the Blue calculated ALS set may have allowed the deck expansion and a variance would not have been required. 87 559 Park Lane-Deck LA23-000033 •Current ALS line (red) •Averaging the neighboring distances creates a less strict ALS than current regulation in this case Neighbor #1 -101.4’ from OHWL Neighbor #2 –98.9’ from OHWL Average –100.15’ from OHWL (blue line) Current ALS –about 102’ from OHWLNeighbor #2 Neighbor #1 75’ Lake Setback Current ALS Calculated ALS 88 1340 Vine Place-New House LA23-000008 Average Lakeshore Setback variance requested for the construction of a new home •ALS 1: Leave ALS as is (red line) •ALS 2: Eliminate the ALS, setback determined by required lake setback (yellow line) •ALS 3: Calculate the average and allow the less restrictive to determine the setback. (blue line) •This scenario does not show a calculated average because the average, 147.5’ is greater than the depth of the lot 89 1340 Vine Place-New House LA23-000008 •Current ALS line (red) •Eliminate the ALS, setback determined by required lake setback (yellow line) •Averaging the neighboring distances creates a more strict ALS than current regulation in this case Neighbor #1 -100’ from OHWL Neighbor #2 –195’ from OHWL Average –147.5’ from OHWL (blue line -greater than the depth of the lot) Current ALS –about 112’ from OHWL Neighbor #1 Neighbor #2 Current ALS 75’ Lake Setback Calculated ALS 90 Outcomes •Majority of the ALS variances that meet the practical difficulty criteria are on uniquely shaped parcels •Recalculating the ALS to be a measured distance using the abutting properties does not seem to have a significant impact on relieving the need for ALS variances. •Calculating the distances for additional properties on either side of the subject parcel to calculate a neighborhood average could result in the ALS being more uniform for a neighborhood. This has the potential to alleviate the ALS pressure on a parcel however, this would require either significantly more staff time and interpretation to determine the ALS (which we currently require from the applicant) or more extensive survey work (at the cost of the applicant) to survey an entire neighborhood. •Of the examples 559 Park would benefit from recalculating the ALS to a strict measurement. In this case, 559 Park was asking for a small deck and the recalculation method would move the ALS line roughly 2’ closer to the lake. 91 Staff’s Recommendations After conducting the analysis, staff finds that adjusting the current ALS regulation would not significantly reduce the number of ALS variances requested each year. Changing the ALS regulation would not result in fewer variance requests and in some situations would result in a larger setback placing a greater setback burden on the property. •Recommendation 1 (preferred): Eliminate the ALS. The intent of the ALS is to protect the neighbor’s views of the lake (including views across a neighbor’s property) is subjective and not a goal of the City Council. •Recommendation 2: Keep the ALS as is -no change. •If this is the decision, a discussion about the current practice of granting ALS variances in situations that do not fully meet the practical difficulty criteria should be had. 92 Items to Consider •Does the Council feel changes are necessary to the ordinance? •What is the goal of the Council for this ordinance? Is it being met? •Discuss the recommendations and direct staff on next steps. 93 Driveway Width within the Shore and Tributary Setbacks City Council Work Session 06/10/24 94 Shoreland Regulations Orono: City Code Section 78-1282. -Driveways, stairways, lifts and landings. (a) A driveway no wider than eight feet is permitted in the shoreland or tributary setback zone if the property has no other frontage on or access to a public or private road. 2019 DNR Model Ordinance: Placement and Design of Roads, Driveways, and Parking Areas. Public and private roads and parking areas must be designed to take advantage of natural vegetation and topography to achieve maximum screening as viewed from public waters and comply with the following standards: •7.11 Roads, driveways, and parking areas must meet structure setbacks and must not be placed within bluff and shore impact zones, when other reasonable and feasible placement alternatives exist. If no alternatives exist, they may be placed within these areas, and must be designed to minimize adverse impacts; 95 Orono Driveway Minimum Standards •Current minimum width –8 feet •The minimum driveway must equal the width of the garage door opening. •Minimum backup apron –8 foot x 8 foot 96 Staff Analysis and Recommendation •The need for a driveway variance in the shore or tributary setback is relatively uncommon. •Most recently, a variance was approved at 1850 Lakeside Trail to permit a 12-foot wide driveway within the tributary setback. •The Shoreland regulations limit driveway width to 8 feet within the lakeshore and tributary setback (when there is no alternative access). •Recommendation: Amend the City Code to follow the DNR model ordinance. •Staff would follow the guidance in the DNR model ordinance and the City’s existing driveway standards to ensure the driveway is designed to minimize adverse impacts. •Screening and/or hardcover mitigation may also be required. Next Steps: Determine if a code changes is necessary.•Direct staff to draft a code amendment and publish for a Planning Commission review and public hearing.97 Average Lakeshore Setback Discussion-Part 4 City Council Work Session 06/10/24 98 City Code Section 78-1279 (6) Average lakeshore setback.No principal or accessory building shall be located closer to the Ordinary High Water Line (OHWL) than the average distance from the shoreline of existing principal buildings on adjacent lots; this does not apply to patios and other accessory structures less than 42 inches above existing grade, and/or stairways, lifts, landings, lockboxes, flagpoles and pump houses. Further, the average lakeshore setback shall apply only to classified lakes and shall not apply to tributaries. The average lakeshore setback line shall be a straight line connecting the most lakeward protrusions of the principal buildings on the immediately adjacent lakeshore lots. a)In situations where improvement is proposed on a lot adjacent to a vacant lot or right-of-way, the average lake shore setback shall be equivalent to the setback of the most lakeward protrusion of the principal building on the immediately adjacent improved lakeshore lot. b)In situations where the average lake shore setback line bisects the principal building located on either adjacent lot, the next most adjacent lake side point of the bisected principal building shall be used for determining the average lakeshore setback. If the line continues to bisect the principal building, the next most lakeside point is to be used until the setback line does not bisect the principal building on an adjacent lot. 99 Building Restrictions on Lake Lots Lake/Shore Setback* The Lake Setback is a measured setback from the 929.4'Ordinary High Water Level (OHWL)contour restricting development near the lake to protect water quality. This includes prohibiting buildings, structures, and hardcover improvements (exceptions include necessary lake stairs) within the shore setback. •General Development (e.g. Lake Minnetonka): 75’ shore setback •Natural Environment (e.g. Lake Classen & French Lake): 150’ shore setback •Recreational Development (e.g. Long Lake): 75’/100’ shore setback Average Lakeshore Setback (ALS)* The ALS is a sight-line setback intended to protect the views of the lake enjoyed across a neighbor’s property. •Accessory structures with a maximum height of 42” or less from grade (pools, patios, retaining walls) are permitted within the ALS. •The ALS is determined by the location of the neighboring homes on either side of the subject. Hardcover •Hardcover limitations are placed on individual properties based on the assigned tier within the Stormwater Quality Overlay District. •Majority of the properties abutting the lakes and protected tributaries are classified as Tier 1 and are limited to 25% hardcover. *The more restrictive setback will be applied to determine the building setback. 100 ALS Challenges and Impacts Challenges -The ordinance language is cumbersome for staff and residents to interpret and apply -Over time application of the ALS can substantially limit the buildable envelope of a parcel -The setback changes each time an abutting parcel redevelops or changes (i.e. deck, addition, new home) -Common error on surveys, leads to multiple submittals and reviews by staff -Shoreline inconsistencies make the setback hard to apply (peninsulas, inlets, etc.) -In 2023, 43% of variance applications received included an ALS variance. -The city received 44 variance applications and 19 requests for ALS variances. Results -ALS further limits massing away from the shoreline -Creates a stricter setback and a higher level of protection of the lakeshore -Strives to create setback uniformity between neighbors -Unique for every parcel -Protects views of the lake over neighbors’ properties -ALS is a higher standard above and beyond the DNR minimum standards in the model ordinance 101 Options to Consider •Option 1: Calculate the ALS using the average of the measured distance of the abutting neighbors’ homes •Finding: As reviewed at the February 2024 Council Work Session, calculating the ALS does not provide significant relief from the regulation. •Option 2: Create an Exception for homes a specific distance from the OHWL (i.e. +300’ from the lake) •Finding: This does not address the majority of ALS variances requested. Only a few properties (mostly the deep properties in the LR-1A zoning district) would get relief. •Option 3: Allow decks (any height) to encroach within the ALS •Finding: This would add more complexity to the application of the regulation. Few projects would benefit (for decks only). •Option 4: Eliminate Average Lakeshore Setback Requirement •Finding: Elimination would simplify the building setback requirements. This could result in construction closer to the lake than a neighbor’s home. •Option 5: No Change •Finding:Status quo. •NEW: •Option 6:Only apply the ALS when the hardcover level exceeds the allowed limit. •Option 7: Only apply the ALS where the existing structures are located within the lake setback. 102 Option 6: Only apply the ALS when the hardcover level exceeds the allowed limit. •Application: •The ALS would not apply to a lot with a conforming hardcover level (25%). The building limit would be the shore setback requirement. •For properties with nonconforming hardcover levels (over 25%), the additional ALS will be applied. •Analysis: •Onerous. Applicants would be required to provide more information to determine the setbacks on each property. •Confusing for applicants. It is not an appropriate solution to address the identified challenges with the ALS regulation. The ALS and hardcover limitations do not address the same concerns. While both limit the development of a parcel, they do not have the same goal. Linking them together is cumbersome and confusing. •Recommendation: Staff does not recommend moving forward with this regulation. 103 Option 7: Only apply the ALS when existing structures are within the lake setback. •The ALS would be applied to properties with an existing building(s) located within the lake setback, to determine the lakeward extent of the building envelope. •Pros: •If the shore setback is met, the ALS does not apply (75’ on Lake Minnetonka). •Acts as a guide for reviewing variances for expansions of buildings within the shore setback. •Cons: •Could allow development closer to the lake. •For conforming lots, this change could impact the protected view over neighboring properties. 104 3339 Crystal Bay Road -Addition LA24-000016 Average Lakeshore Setback variance requested for the construction of an addition to an existing home within both setbacks. •ALS as is (red line) •Lake setback at 75’ (yellow line) Applied Option 7 -Apply the ALS when the house encroaches into the lake setback. •The ALS would function as a guide for the lakeward extent of a home expansion. •75’ lake setback and 30’ rear setback eliminate a reasonable building envelope. •Using the red ALS line (approx. 65’ from the OHWL) allows for a larger building envelope than the 75’ lake setback (yellow). 105 3600 Casco Avenue-New House LA23-000060 Average Lakeshore Setback variance requested for construction of a new home within ALS. •ALS as is (red line) •Shore/lake setback (yellow line) Apply Option 7-The shore setback can be met. The ALS would not apply. The yellow 75’ lake setback line would set the lakeward extent of the house placement. 106 559 Park Lane -Deck LA23-000033 Average Lakeshore Setback variance requested for the construction of a deck within the ALS. •ALS as is (red line) •Lake setback (yellow line) Under Option 7: The shore setback can be met. The ALS would not apply. The yellow 75’ lake setback line would set the lakeward extent of the house placement. 107 2605 Mapleridge Lane -Addition LA23-000066 Average Lakeshore Setback variance requested for remodel and addition to existing home •ALS 1: Existing ALS as is (red line) •ALS 2: Eliminate the ALS, setback determined by the required 75’ lake setback (yellow line) Under Option 7: The 75’ setback can be met. The ALS (red line) would not apply. The 75’ lake setback (yellow line ) would determine the building envelope. 108 Staffs Recommendations •#1: (preferred) Eliminate the ALS regulation. The purpose is the preservation of the view of the lake over a neighbor’s property, which is not a goal of the City Council. •#2:Option 7, Apply ALS only when existing buildings are situated lakeward of the lake setback or when building setbacks overlap or significantly limit building envelope (Crystal Bay Road, etc.). Direct staff to draft language and begin the public hearing process. •#3: Keep the ALS regulation as is -no change. •If no change is made, the Council should discuss the current practice of granting ALS variances in situations that do not fully meet the practical difficulty criteria and establish criteria for granting variances. 109 Discussion •Does the Council feel changes to the ordinance are necessary? •What are the Council’s goals for building setbacks on lakeshore properties? View protection? Water quality? Something else? •Does the current ALS regulation meet the Council’s goals? •Does Option 7 accomplish the Council’s goals? •If the home meets the lake setback, is there a need to preserve views over a neighbor’s property? •Discuss the staff recommendations and direct staff on the next steps. 110