Rochester punts regulating cannabis businesses to Olmsted County

ROCHESTER – Instead of limiting cannabis business licenses, officials here are walking away from the issue for now.

Rochester is choosing to delegate its authority over cannabis businesses to Olmsted County, meaning county officials would be responsible for licensing and enforcing regulations. The Rochester City Council voted 6-1 Monday night in favor of the new strategy, which comes as cities and counties around Minnesota ready themselves for cannabis operations to start up next year.

The Office of Cannabis Management recently ruled communities could cede authority over cannabis businesses to counties, which allows county officials to set up infrastructure some smaller cities normally couldn’t. Some places have already done this: Nicollet County in south-central Minnesota last month voted to offer delegation agreements on the issue to townships in the area.

In Rochester Christiaan Cartwright, deputy city clerk, said the decision to cede authority made sense given that Olmsted County already had procedures in place to license and enforce regulations for cannabis businesses — the county is mirroring similar efforts to police tobacco sales.

Rochester would have to set up policies and figure out how to enforce rules as soon as next month, when some cannabis businesses get their licenses pre-approved through the state. Any local businesses will want to know how the area plans to enforce cannabis regulations when that happens.

“If we don’t even have a framework in place, then they are ill-served,” Cartwright said, explaining businesses need that information to set up financing.

Only 160 cannabis business licenses will be issued throughout the state next year before the process opens up. Numerous communities set moratoriums on cannabis sales last year to buy time while state officials set regulations for the new industry.

Olmsted County has capped the number of business licenses in the area at 14 and Rochester at one point appeared to follow suit. A number of communities around the state set similar caps, though some of the state’s biggest cities — Minneapolis, St. Paul and Bloomington — have not.

Those caps may not matter at first. State officials plan to issue licenses through a blind drawing, meaning the Rochester area may not get any licenses until 2026 at the earliest.

“How they intend for it to work as of today is true drawing of the proverbial hat,” Cartwright said.

Council members supported staff’s wait-and-see recommendation despite some frustrations over the state’s shifting policies.

Molly Dennis, the lone dissenting vote, said she didn’t support Rochester giving up its authority over the issue. But city officials say future councils could vote to take back licensing and enforcement after the kinks in the process are smoothed over.

“It seems obvious in our situation, being 70% of the county, that it makes perfect sense to do this,” Council member Patrick Keane said. “I would be more remiss on this ... if not for the fact that we can, this council or future councils, change through ordinance and pull back control.”