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Richfield moratorium illustrates the pickle cities are in when it comes to regulating THC

From a city government perspective, embracing the new legal-pot future might be a bit much for many elected officials, at least as it stands right now.

A Minneapolis shop selling THC products.
A Minneapolis shop selling THC products.
MinnPost photo by Bill Lindeke

The most surprising outcome from Minnesota’s 2022 Minnesota legislative session was the (some say accidental) legalization of certain tetroahydrocannabionol (THC) edibles, a.k.a. pot gummies. As reported here by Peter Callaghan the policy originally intended to clarify rules around “Delta 8” – a milder, legal cannabis compound – but ended up legalizing the sale of a wider range of THC products.

From a city government perspective, embracing the new legal-pot future might be a bit much for many elected officials, at least as it stands right now. Because it flew under the radar, the state’s THC legislation lacked many specifics you’d normally find in statewide policy around things like taxation, inspections, packaging, and other product rules.

As a result, cities have been scrambling to reconcile previously hostile stances against pot with the new era, and a wave of THC moratoriums have broken out at the local level. Earlier this month, the city of Richfield, just south of Minneapolis, passed a potentially year-long moratorium on legal sales of cannabis products. It was a move that came with a  slight degree of controversy, but points to the need for more laws around THC to help cities clarify the situation. 

“I don’t think this is a good approach to policy making,” said Sean Hayford Oleary, a council member representing Richfield’s central district. He was the only Richfield elected official to vote against the moratorium, and outlined his reasoning in detail in a related Twitter thread.    

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Hayford Oleary argued that access to THC products isn’t really the issue here. Because nearby cities have not regulated the products, and online ordering makes it all but a given that most people could access the products whether cities legalize them or not, the moratorium unduly harms city businesses. After all, he reasoned, Richfield is a small city sandwiched between Minneapolis and Bloomington, which makes it particularly vulnerable to arguments about municipal fragmentation. 

“The problems are related to use of the product and the solution is related to brick and mortar sales in the city of Richfield,”  Hayford Oleary explained to council colleagues. “I don’t think there’s a good nexus between the role and solution (that’s been) stated.”

It wasn’t just Richfield that faced this kind of quandary between local businesses and unregulated THC. Other cities around the state have passed similar moratoriums, which allow one-year limits on products.

The League of Minnesota Cities, a state municipal lobbying organization, has offered guidance around policy choices for municipalities, and suggested moratoria as one option for cites struggling with THC regulations. Cities that have passed similar moratoria include Lauderdale, Hastings, and Stillwater. Woodbury and Edina are the only cities to have officially adopted licensure regulation, though other larger suburbs like Eden Prairie, St. Louis Park, and Apple Valley are currently considering it.

On the other hand, St. Paul, Minneapolis, and most other large cities, have adopted a more hands off approach and are letting things work out. Given that Delta 8, for example, has been legal for years and the increasing wave of deregulation of cannabis is likely to come quickly to Minnesota cities, there’s a lot of likely economic activity that will quickly form around sales. Whatever gains are to be had from the eventual regulation and taxation of the products will be locked into place early on, this year, as customers start to form habits and connections with retailers.  

It’s that disconnect that’s a problem for people like Sean Hayford Oleary, who argue that, at this point in the legalization process, it’s more important to make sure that small businesses in Richfield have a chance to thrive. 

“Passing this moratorium will not prevent Richfielders from gaining access to this product,” Hayford Oleary said. “They can go to either neighboring city that continues to allow this; they can go online with almost no age verification, anyone with a credit card or a PayPal account. It’s nothing like regulating alcohol sales where we do have tools and can meaningfully prevent access.”

The tone aside of the argument is a lot like the heated local government conversations around tobacco or alcohol. There are specific issues around packaging, dosage, and access to minors that are concerning for Richfield leaders like Mayor Maria Regan Gonzales and Council Member Mary Supple. During the recent City Council meeting [PDF], the city’s police chief, who has a long history of combating cannabis usage, testified about the concerns about unregulated THC sales in the city.

“We’ve been really assertive about regulating things like flavored tobacco,” said Council Member Simon Trautmann, who represents the western-most Richfield neighborhoods. “But now we have THC products that are chocolates, that are gummies, and can be sold in the same places in more aggressive manners than flavored tobacco.”

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The resulting limbo is a tough situation for cities like Richfield that have long prioritized regulation on products like THC, which have public health and safety risks. Without regional or state-wide guidance, they’re left between a rock and a hard place, and facing tough choices about how to reconcile a public safety concern with banning businesses.

But with the Democratic-Farmer-Labor (DFL) in control of both chambers of the legislature the coming session, clarifying the THC rules and — likely for electoral reasons — legalizing marijuana use in a broad way will probably appear early on the docket. Perhaps the moratorium in Richfield and other cities will be made irrelevant by the fast-moving regulatory changes around pot legalization.

The hope for Richfield, which passed the moratorium on a 4-1 vote on Oct. 25, is that they might craft some form of firmer relegation before the year-long policy expires.

In the meantime, other Minnesota cities have a choice to make: embrace a bit of uncertainty and a loosening of control, or push out a burgeoning small business industry. Granted, not everyone views a THC shop as an asset to the community, but with small-scale, brick-and-mortar retail experiencing a low-key crisis, leasing commercial space is certainly a good thing for cities like Richfield or dozens of others around the metro area.

With a DFL trifecta in place after  this week’s election, the state legislature should make THC and pot legalization a priority during the coming session in January. Doing so will help City Councils and exasperated staff deal with what has become a sticky situation around THC, and open up new opportunities for strip malls throughout the Twin Cities metro area.  

“There is broad public support for this,” said Hayford Oleary, referring to the legalization of THC. “I worry that actions like [the moratorium] will continue to undermine a better and more thoughtful legalizing path than the one that we have.”

Hopefully the Council Member won’t have to worry for long.