This this going to be an ongoing evolution every legislative session. Things are going to change”

City Councilor Dave Pemble

Hastings City Hall
101 4th St E
Hastings, MN 55033
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The Hastings City Council Monday voted 6-1 to raise the cap of cannabis retail registration in town from one to two in order to follow new interpretations of State statue as provided by the Office of Cannabis Management (OCM).

Councilor Lisa Leifeld was the dissenting vote.

This changed–paired with an hour-long conversation on potentially allowing businesses with partial state licenses to move forward with city registration—showcases the uncertain footing that the cannabis legalization process, licensing, and registration is on even years after legalization.

“This this going to be an ongoing evolution every legislative session. Things are going to change,” said Councilor Dave Pemble.

Cannabis Cap

The city’s previous ordinance which was adopted last year limited the number of cannabis retail registrations, often referred to as dispensaries, within the city at one, referencing language from Statute 342.13 (h) regarding local control: "A local government unit […] may, by ordinance, limit the number […] to no fewer than one registration for every 12,500 residents.”

This, to the city council at that time, meant that because Hastings has a population below 25,000 residents, it must allow one dispensary.

“Our interpretation when we wrote the ordinance that we adopted last November/December, with a population of 23,000, we interpreted this to mean one because we weren’t at 25,000, which would be doubling that number,” said Assistant City Administrator Kelly Murtaugh.

A recent memo from the OCM, however, rejects that interpretation

Instead, according to the memo, cities must allow one dispensary for a population of less than 12,500 and two for cities with a population of 12,500-25,000 residents. 

While this new interpretation is currently definitive, it might not remain so according to City Attorney Greta Bjerkness.

“You could have five attorneys read the cannabis statue and interpret it five ways,” said Bjerkness, continuing, “time and litigation will prove who’s right and wrong on this.”

Despite that uncertainty, however, Bjerkness thought the language on the cap was likely to remain: The cap I think is pretty clear in statue: based on your population, you need to allow two.”

City Councilor DawnMarie Vihrachoff was hesitant, not with the increased cap, but with the messaging changing after months of telling residents the city was only going to allow a single dispensary: “I’m incredibly uncomfortable now going back to those same folks in the community and saying ‘whoopsie its actually two.’”

Other Councilors echoed the want for an increased cap from a single retail registration the council approved last year.

“I don’t think two is probably enough,” said Councilor Lisa Leifeld.

Councilor Angie Haus echoed Leifeld’s comments that the city could support more than two dispensaries referencing the numerous liquor stores in the city.

As to Councilor Leifeld’s dissenting vote, she referenced wanting a cap of more than two retail registrations in the city.

Preliminary Licensing

The second change discussed but not acted upon at the council was allowing businesses with a preliminary state license to move forward with final registration with the city in opening a business.

Currently, Hastings requires a state license before businesses can return to the city for registration.

State licensing is provided through a lottery which would potentially require businesses to spend tens of thousands of dollars in preparation for a site in a municipality, only for another business to get a state license first, fill the cap for the municipality, and box out other businesses in the area.

“If folks aren’t going to get a registration, it’s helpful to know that long before they invest the potentially hundred thousand dollars or more in a buildout and safety plans and all of that,” said Murtaugh, calling the proposed change more business friendly.

This exact point was made Zach Roar, Owner of Minny Grown, a Cannon Falls-based cannabis company during public comment: “There is a tremendous, tremendous amount of capital expenses that come in to just getting approval from the state of Minnesota. You have to have business plans, you have to have security plans, you have to have a lot of this stuff installed ahead of time.”

This change came during the most recent legislative session to state statute 342.22 subdivision 3 (a) regarding local registration and enforcement: “A local unit of government shall issue a retail registration to a [business] […] that has a valid license or preliminary license approval,” as well as new interpretations on this language.

“Where people disagree on this is the ‘or’” said Bjerkness, as to if businesses need both or either a preliminary license and a state license.

While the city had previously required a state license from businesses, “further interpretation and review of statue would suggest that perhaps, that was not the right path to follow,” said Murtaugh.

The council did not act upon this issue, in part because of confusion surrounding the process and how it would play out for those working on state licensing for the last few months.

“We’re all very confused up here now,” laughed Beck about the process.

I don’t think that based on the work that some of the businesses have already put in, I don’t think moving the goalposts seems fair,” said Leifeld.

Councilors discussed the need for a future work session on this topic.

Cannabis Special Use Permits

The city council also voted on two special use permits for cannabis retail sales.

The council rejected a special use permit for cannabis retail sales from Leonard McQuen with Kailua Cultivation which would be located at 1304 Vermillion St. Despite unanimously being approved by the Planning Commission, city staff discovered that the site falls within the 500-foot city setback from a residential treatment facility.

Spirit Recovery Center has a residential treatment facility located at 1215 Sibley St, less than 300 feet from McQuen’s proposed site.

The city council unanimously rejected the Special Use Permit.

The council approved the special use permit for cannabis retail sales came from Steve Anevski to be located at 2324 Vermillion St. This application was approved by the Planning Commission with a 6-1 vote despite a letter of objection from Erin N. Lambert on behalf of Hastings Commons and public comment concerning parking and entry and exit onto Vermillion St from that site.

The City Council approved the application unanimously.

PFAS Update

Bids are in for the two contracts on the central water treatment plant, more than $4 below pre-bid estimates.

Public Works Director Ryan Stempski spoke before the council on the incoming bids which total $23.1 million for the project against a pre-bid estimate of $27.7 million.

Detailed breakdowns of the bids and awarding of contracts will occur at the Aug 18 meeting for both the raw water main and central water treatment plant.

Of the total $23.1 million, water rate increases make up $5 million, or 21.5%. The remaining amount comes from the 3M settlement fund, an MPCA planning design grant, and an emerging contaminant grant, with just over half the project funded on the 3M settlement fund’s dime due to well 5’s connection to 3M.

Stempski described the process of covering well five as working Co-Trustees of the settlement funds to calculate the cost of only a treatment plant for well 5, then creating a percentage of the actual treatment plant that also contains wells 3 and 7.

Construction is expected to begin in September, according to Stempski.

“real competitive bids,” said Wietecha