Twin Cities suburbs playing regulatory Whack-A-Mole with new THC products as session looms

Twin Cities suburbs are rushing to enact a patchwork of ordinances to regulate newly legal edible products containing THC, trying to either address questions left unanswered by state legislation or temporarily ban their sale to do more research.

From Edina to Woodbury, more than 25 suburbs have taken action, ranging from implementing one-year moratoriums to licensing sites that sell the products. Some also have limited sales through zoning.

Other cities have done nothing in the expectation that the state will create additional rules this legislative session surrounding the products' sale — or legalize marijuana altogether.

"Initially, after the law went into effect, a lot of cities opted to put in place a moratorium to study it a little bit," said Alex Hassel, intergovernmental relations representative for the League of Minnesota Cities. "Some of those cities are now seeing what they can do [in terms of licensing]."

The law, passed in July, says that edible products containing THC are legal for purchase by people 21 or older. They products cannot exceed 5 mg of THC in a serving or more than 50 mg per package.

But the legal requirements largely end there. They don't address where THC edibles and beverages can be sold or how much a person can buy.

Cities weren't brought to the table when the legislation was crafted, Hassel said, so they want to ensure the products are sold in a controlled and thoughtful way — away from youth-oriented locations.

Hassel said that cities are finding that it's time-consuming for law enforcement to ensure compliance with state law.

This session, the League hopes the Legislature will create a stronger regulatory framework and offer more guidance for law enforcement, she said. Many cities also want questions on topics such as employment law — specifically drug testing — cleared up, and some would like to recoup the cost of enforcement through a local tax, she said.

Many cities have looked at how they license alcohol and tobacco and used that as a template, Hassel said.

State Rep. Heather Edelson, DFL-Edina, the bill's sponsor, defended the legislation as offering some clarity around various products' legality while admitting it wasn't perfect. She also wants to see more regulation.

"I would say what we did is actually a dramatic step in the right direction," she said.

She expects there will be more rules made around THC edible products this session, but much will depend on whether marijuana is legalized, she said.

Those rules could include shifting THC product regulation to a new office or department besides the Board of Pharmacy, designing a state license for manufacturers and creating a "seed to sale system" to track products from the plant to the processor, the manufacturer and then to retail stores.

"All of those three measures would provide consumer protection," she said. "It also takes bad actors out of the market."

Although cities say they want more direction from the state, they also want to maintain local control, she noted.

City officials already know about licensing, she said.

"Cities do this work," she said. "It's not like I created this new niche."

In the months following the products' legalization, suburbs like Prior Lake, Robbinsdale and Chanhassen passed moratoriums for up to one year.

"Our City Council reacted quickly ... because there were still just a lot of questions," said Jason Wedel, Prior Lake city manager.

Those questions included who can sell the products, whether they need a physical store, where the products can be manufactured and who is testing them, he said.

Robbinsdale first passed a moratorium but is formulating licensing and zoning ordinances. The goal is to have both approved by the end of January, said Tim Sandvik, Robbinsdale city manager.

The zoning ordinance allows the products to be sold in most commercial areas in Robbinsdale. The licensing ordinance so far requires background checks and compliance checks. A fee hasn't been decided.

Other cities that have enacted licensing ordinances or are in the process of doing so include Bloomington, Golden Valley, St. Louis Park and Lakeville. One variable is cost, with cities charging wildly different amounts.

Bloomington's license, for instance, costs $175 per year.

Woodbury approved a licensing ordinance Aug. 31 that charges businesses $10,200 annually plus an additional $500 for background checks, said Jason Egerstrom, the city's spokesman.

"Really, [the cost] is all about the burden of enforcement," he said.

Woodbury's license requires the seller to be at least 500 feet from any "youth-oriented facility" and allows the city to do compliance checks to ensure products aren't sold to underage customers. One business has been licensed so far, he said, and two others are in the process.

Several cities said they used the League of Minnesota Cities' model ordinance to help them. Lakeville and St. Louis Park officials said they used their own tobacco ordinances as a guide.

Brian Hoffman, St. Louis Park's building and energy director, said the city took "a moderate approach."

A yearly license to sell in St. Louis Park costs $830, Hoffman said. The city has a testing program in place in which THC products are sent to a lab, he said.

Cities like Burnsville and Rosemount have decided not to implement any ordinances related to THC products.

"It's kind of like the Wild West out there," said Burnsville City Council Member Dan Gustafson.

Gustafson said it would make no sense to ban THC product sales when residents can just drive to a neighboring city to buy them.

Several owners and employees of stores selling THC products said they don't object to cities requiring licensure.

David Sutton, owner of Midwest Craft CBD + Hemp, said licensing is a logical step for a larger suburb like Woodbury.

"We view licensing as a step toward consistency," he said.

He's glad the city didn't take the "extreme approach" of a moratorium — or what he calls a "soft ban," he said.

At Natreum in St. Louis Park, owner Melissa Guidi has big plans. She's just finished building a new "consumption bar" with mounted TVs as a place to enjoy CBD and THC products, and hopes to get a food and beverage license soon. Two "shop dogs" roam the store, adding to the welcoming vibe.

"We're just trying to create a communal space that doesn't include alcohol," she said.

She said she's been asking for more regulation of THC products, including packaging and standards on what kinds of places can sell and to whom.

City officials were at the store Tuesday and said Natreum must comply with background check requirements, pay the licensing fee and provide product samples for tests by Jan. 1.

"The time frame sucks, but we'll do it," she said.