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DETROIT LAKES
— When it comes to cannabis businesses in Detroit Lakes, the consensus among Detroit Lakes City Council members is that it’s challenging to come to a consensus.
The city council met Thursday, Oct. 25, for a work session to thresh out details in the city’s ordinance to regulate cannabis businesses, which include cultivation facilities as well as retail stores. In particular, the council was trying to determine where cannabis businesses could set up and how many would be allowed.
Contributed / City of Detroit Lakes
As it stands now, the draft ordinance would allow retail stores in the B-3 auto-oriented zoning district. Businesses already allowed in the district include gas stations, grocery stores, restaurants, auto repair and sales, hotels, theaters and more. Per state statute, a cannabis retailer must be 1,000 feet or more away from any school, and 500 feet or more away from any day care, park, playground or residential treatment facility.
Under the city’s draft ordinance and in accordance with state statute, retail shops in Detroit Lakes would be placed along the U.S. Highway 10 corridor.
Indoor cultivation facilities, on the other hand, are zoned for light and heavy industrial districts in the draft ordinance. Those zoning districts are largely in the northern portion of the city along Richwood Road, Cormorant Avenue and a portion of North Toward Road. There are also some areas along U.S. Highway 10 in which cultivation could occur.
City Council member Aaron Dallmann expressed skepticism at anybody being interested in cultivating in Detroit Lakes due to competition in the area.
“You already have them producing marijuana up on White Earth,” he said “My feeling is, they already go the distribution, they’re not paying the 10% tax on it, so they’re already ahead of the game. I don’t think there’s anybody else who’s going to come to town and grow it because you already have distribution up there …”
City Administrator Kelcey Klemm said cultivation facilities will be licensed by the state as either a “microbusiness,” a cultivation facility less than 5,000 square feet, or “mezzobusiness,” a cultivation facility up to 15,000 square feet.
Klemm said the state will begin issuing licenses sometime next year, hence the council’s need to firm up the city’s ordinance regulating cannabis businesses, and city attorney Charles Ramstad noted the city needs to have its first reading of the ordinance in November.
Contributed / City of Detroit Lakes
“So the issue that came up is, the way the current ordinance is drafted, where you have retail in B-3 and you have cultivation in industrial districts, you can’t have a microbusiness or a mezzobusiness that does both cultivating and retail in either one of those districts,” Klemm said.
Outside of zoning, the council also attempted to address how many retail businesses they would allow.
“A keynote here is that this is a property right,” City Council member Shaun Carlson said of granting permits to retail businesses. “So once that property right is there, it’s there … even if we change it (the ordinance) later, that’s grandfathered in.”
Because of those property rights, Carlson said he wants to take a conservative approach when issuing those permits to businesses.
Most on the council seemed to agree with that approach.
The current ordinance does not restrict the number of cannabis businesses allowed in Detroit Lakes, but zoning would effectively act as a cap, limiting cannabis businesses to specific zoning districts and requiring them to be 500 feet from one another, as well as the aforementioned distances from schools, day cares and residential treatment facilities. As the ordinance is written, there could be as many as 19 locations for retail businesses in the B-3 district.
Klemm said that if there were a limit on the number of licenses, the city would need to develop a process for determining who gets licenses.
“You can say we’re only going to give one license, but then you need to develop how we’re going to issue that license,” he said. “I think everyone’s struggling with that, how do you go through that process? Would it be first come first serve? Is it going to be scored? Is it going to be a lottery?”
Side-stepping that process and using zoning as a constraint helps prevent the city from being cited in future case law.
“That’s why we didn’t want to do it (setting a limit on licenses) in the first place because it’s an administrative nightmare and an invitation to get sued if you try to pick and choose,” Ramstad said.
The city is allowed to place “reasonable restrictions” so long as those restrictions do not prohibit the establishment or operation of a cannabis business, Ramstad said.
“The market’s going to dictate what DL and the surrounding area can support,” City Council member Matt Boeke said. “That being said, I would be in favor of looking at B-3 (for retail) if those zones were expanded so we have a larger space between locations. Whether it’s 1,000 feet, whether it’s 2,000 feet, I don’t know that, but I guess that’s where I’m leaning right now.”
Council members had plenty of back and forth about what zoning districts indoor cultivation facilities and retail shops should be in, but ultimately opted to keep the ordinance as is, with indoor cultivation in industrial districts and retail in B-3.
The council did, however, want to see what possible retail locations would look like with varying buffer zones between cannabis businesses.
The plan is to go forward with a new map showing buffer zones of various distances and for the council to pick a distance during the ordinance’s first reading in November.
Klemm cautioned the council to make sure that whatever they choose for a buffer, it is not done so arbitrarily, setting up legal challenges.
“}]] With the state to begin handing out licenses to cannabis businesses next year, the Detroit Lakes City Council met for a work session on Thursday to shore up the city’s cannabis business ordinance. Read More