An attempt to get the fee city businesses would need to pay to get licensed to sell cannabis

 in Hastings reduced $2,000 annually failed at the Hastings City Council meeting on Monday, April 3.

Approval was then reached at the proposed $8,000 level.

The city council, the Public Safety Advisory Commission and the council’s Public Safety Committee have worked since last summer to develop ordinances that list where the cannabinoid edibles can be sold after the Minnesota Legislature at the 11^th hour of its 2022 session legalized their sale in the state but gave no guidance to communities.

The city passed zoning and licensing criteria last month, with the fee schedule still needing a second reading. The council knocked down the initially proposed license fee of $10,000 to $8,000 in March.

The new rules will take effect July 1, giving city staff and businesses time to review and abide by the new rules.

The state legislature could also make changes to state law that would make some of what the city has done moot, but the council will have to wait until late May to see what happens there.

City Councilmember Tina Folch said that with a liquor license costing retail outlets $4,200 annually, $8,000 is too high.

“Personally, I do not understand why it is we would require an $8,000 cannabis license when an on-sale liquor license is only $4,200.,” she said. “I would like to see it reduced to something that’s reflective of where we are at with on sale liquor licenses. They’re both controlled substances.”

She said the price will keep businesses away from applying.

“I feel very strongly we shouldn’t be setting this fee so high so that our business community is unable to take advantage of beginning to sell cannabis products, the gummies to begin with. I just feel it’s really unfair of the city to be imposing a fee structure that’s so high that it discourages our business community from being able to acquire this license,” said Folch. “I would really want to make sure there’s justification for setting something so high that it actually prohibits our business community from taking advantage of this opportunity of selling cannabis products that are legal in Minnesota to this point.”

City attorney Korine Land said enforcement will be harder for the city for the cannabis license than it is for liquor, because the state isn’t doing any regulation of cannabis. It’s left to local municipalities.

“There’s a difference between a very regulated liquor product that is tested, that is stamped, that is required to be licensed by the state of Minnesota and a completely unregulated CBD product that the state of Minnesota does not test, does not regulate,” she said. “It is left to local law enforcement to look at all of the products. I can guarantee you 90 percent of the stores that are selling them today are not in compliance with Minnesota law. This is a new territory.”

Councilmember Dave Pemble commented, “Who knows what’s going to come of this when it gets to be May 20, and the (legislative) session is over with? I think we need to steady the process and say OK, if we’re going from $10,000 to $8,000, I can live with that for right now and see what the process is as the legislative session ends and what transpires moving forward. This is probably going to take tweaks of the ordinances moving forward. This is a good base to start with.”

Councilmember Jen Fox made a formal motion to drop the fee to $6,000.

“We often talk about how we can go back and tweak ordinances. In my short tenure up on the dais, we have never done that. It’d be a little bit remiss to say we can tweak it along the way. If we want to see businesses open and thrive, we should create an environment where they can do so,” she said.

Mayor Mary Fasbeder advocated keeping the fee at $8,000, given the research and time that went into putting ordinances together.

“I hear where everyone is coming from. We do want these businesses to be successful. Our PSAC spent numerous hours looking at the data from our surrounding communities. They worked really hard on it,” she said. “I want to be mindful of the hours that were put into it and the data they supplied us with for their recommendation.”

The motion to drop the fee tied 3-3 with Fasbender voting with Pemble and Trevor Lund. Lisa Leifeld joined Folch and Fox on the $6,000 side. Councilmember Angie Haus was absent.

A tie vote kills the motion, and a new motion easily passed to set the license fee at $8,000.