The Brainerd City Council has taken steps to issue cannabis business licenses on a first-come, first-served basis, with the final approval set for May 5. On April 21, council members voted in favor of a draft ordinance that establishes this system, adhering to the state-mandated limit of two cannabis businesses in the city.
Finance Director Connie Hillman informed the council that the Minnesota Office of Cannabis Management recently updated its guidelines and began notifying potential applicants to engage with local governments regarding licensing and zoning. Some cannabis retailers could potentially open as soon as May, according to Hillman.
The state allows municipalities to determine their own processes for applicant selection when demand exceeds permitted business numbers. Brainerd, with a population exceeding 14,000, is required to permit at least two cannabis businesses, as mandated by state regulations which stipulate one cannabis business per 12,500 residents.
The initial licenses offered will be for microbusinesses, which are defined as smaller storefronts or producers. Hillman noted that if all available licenses were claimed by microbusinesses with retail endorsements, larger businesses would not be able to apply until those licenses were exhausted. To address this potential issue, she suggested that the council might consider lifting the cap on licenses.
During the meeting, Hillman presented several options for the licensing process: first-come, first-served, merit-based, rolling, or lottery systems. She recommended the first-come approach if the cap remained in place, emphasizing the urgency of establishing an ordinance given the imminent influx of applications.
Council President Mike O’Day expressed concerns about lifting the business cap and supported a merit-based system, although he acknowledged it could complicate and prolong the process. Council member Gabe Johnson inquired about how a merit-based system would function, to which Hillman replied that it would require significant resources to evaluate applicants, potentially leading to delays.
Johnson voiced his frustration with the state’s last-minute changes, stating, “So the state trips over its own feet for two years, and we have five minutes to make a decision?” He also expressed reservations about lifting the cap, noting that the long-term impact of cannabis businesses on the community remains uncertain, while advocating for a system that favors local enterprises.
Council member Jeff Czeczok clarified that if an existing business ceases operations, the permit would become available for another applicant. He also preferred a merit-based approach but recognized the time constraints involved.
Council member Kelly Bevans raised concerns regarding the permit fee. Previous discussions set the fee at $500 for initial applications and $1,000 for renewals. However, new state guidelines cap municipal fees at 50% of the state’s permitting fee, prompting questions about whether the council might consider setting a higher fee to ensure serious applications.
Bevans made a motion to proceed with the first-come, first-served system and approve the draft ordinance, which was unanimously passed after a council member reversed a previous dissenting vote.
Following this discussion, Hillman proposed hosting a public hearing on the ordinance, although it is not required. The earliest such a hearing could occur is during the council’s meeting on May 19. If the council opts not to hold a hearing, the second reading and potential approval of the ordinance could proceed on May 5.
Bevans moved to skip the public hearing, which was seconded by Czeczok. However, Johnson opposed this motion, advocating for public input on cannabis sales in the community. Despite Johnson’s concerns, the motion to forego the public hearing passed 6-1.
The council plans to address this issue again in the upcoming meeting on May 5.
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