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Republicans, DFLers change hats in debate over how much control cities, counties have over recreational marijuana

A perennial legislative issue — state preemption of local government decisions — has been turned on its head when it comes to recreational marijuana.

People buying recreational marijuana at a dispensary in Rochelle Park, New Jersey.
People buying recreational marijuana at a dispensary in Rochelle Park, New Jersey.
REUTERS/Eduardo Munoz

It’s not a partnership exactly, but Minnesota’s local governments and legislative Republicans have found themselves on the same side in opposing a key provision of the bills to legalize cannabis for recreational purposes.

Local government lobbyists representing counties, cities and townships don’t like being cut out of the regulation and licensing of the new industry that would bring marijuana retailers and event organizers to their jurisdictions. They’d also like the authority to opt out of having marijuana sales at all.  Republicans who find themselves in the minority in both the House and Senate have taken up those issues to oppose or at least slow down the bills — House File 100 and Senate File 73.

This coalescing of interests has turned a perennial legislative issue — state preemption of local government decisions — on its head. It is Republicans who have in the past supported bills to prohibit local governments from having their own and varying regulation of issues such as minimum wage, paid family leave and rent control. DFLers have opposed those efforts, with the appreciation of local elected officials, especially in the Twin Cities metro.

But on recreational marijuana, it is the DFL and their sponsors of the bill that have sought to preempt local governments from licensing, taxing and regulating marijuana businesses, including selling to the public. And it is the GOP that is standing up for local control.

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Even the rhetoric has changed sides. Republicans have argued that business needs consistent rules. They warn of the burdens of employers having to navigate a “patchwork” of regulations.

House GOP Leader Kurt Daudt
State Rep. Kurt Daudt
But after Rep. Kurt Daudt, R-Crown, offered an amendment in the House Commerce Committee last month to give local governments the same licensing authority over marijuana sales that they have now over tobacco and alcohol, bill sponsor Rep. Zack Stephenson sounded similar themes.

“Standardization and having a consistency across the marketplace is valued by business,” said Stephenson, DFL-Coon Rapids. “And what we don’t want is a patchwork of different rules in different parts of the state.

“I do think there is some balance to be had here,” he said after offering this week to continue working on that aspect of the bill. But where he won’t go is allowing cities or counties to opt out of the legal marijuana business.

“One of the principal goals in the bill is to eliminate the illicit market for cannabis,” he said. But states that have allowed cities to opt out or have different rules or tax rates have created pockets where illegal sales continue to thrive, he said.

“In this case this type of local control is not a solution to the problem of getting rid of the illicit marketplace,” Stephenson said. He added that he expected there to be changes to the bill as a result of conversations with the League of Minnesota Cities and the Association of Minnesota Counties.

State Rep. Zack Stephenson
MinnPost photo by Peter Callaghan
State Rep. Zack Stephenson
Stephenson said he is looking into some changes to his bill, including enforcement of provisions on how products are sold such as sales to minors or sales of unapproved products or oversight of large events.

“It seems to me that a local government is better positioned to do that enforcement than a statewide agency,” he said in an interview Wednesday. He anticipates creating a system of dual licensing with a state license and a local license for businesses that interact with customers — cannabis retailers, low-dose edibles retailers, medical retailers and events.

“That way they have an enforcement hook,” Stephenson said. “If they find that you’ve been selling to minors or something they can yank your local license. But it has to be balanced.” Too much burden on the new retailers or local license fees that are too high could provide a boost to illicit sales that can avoid both. And other cannabis business such as manufacturing or growing would not have any local licensing.

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“Local control makes sense in some areas, it doesn’t make sense in others,” he said.

Addressing local problems

During the Commerce Committee meeting, Daudt noted the irony of his position, having in the past advocated for preemption laws that were often aimed at the state’s most liberal cities.

State Rep. Jim Nash
State Rep. Jim Nash
“While I’m not always the strongest voice for local control, today I am,” Daudt said, drawing laughter from Stephenson and others on the committee. Rep. Jim Nash, R-Waconia, reminded DFLers that they have in the past “excoriated” him for not supporting local government control.

“We are giving you the opportunity to put your money where your mouth is and vote in favor of local control,” said Nash, a former mayor of Waconia. “At what point do we allow our cities to run their cities?” 

While Stephenson is willing to talk, he has asked DFL members of the various committees where the bill has been debated to reject GOP amendments, with one notable exception blocking marijuana retailers from locating close to parks and youth sports fields. One would have allowed local referendum votes to declare cities no-marijuana zones. Another would have limited the length of marijuana event permits to 12 hours from the bill’s provision of four days. Still another would have let townships opt out.

Ongoing talks might have muted the criticism of the bill before the House State and Local Government Committee Tuesday but didn’t eliminate them. It was the fifth of 14 planned committee stops for HF 100.

Alex Hassel, a lobbyist with the League of Minnesota Cities which counts 837 members, said local officials including law enforcement will enforce many of the provisions of the bill but can’t do anything to decide where and how products are sold. The league is asking that cities be allowed to do the same licensing and regulation they do now with tobacco and alcohol. The association also wants cities to be able to opt out of the new business altogether and have limits on the number of retailers within any city.

Scott Neal, the city manager of Edina, said local licensing forms the foundation of how cities enforce laws on alcohol and tobacco and should be used for marijuana sales as well. “Local licensing gives us in the local government business to know who we’re doing business with, who is doing business in our community,” Neal said. “When there’s a problem, and there’s going to be a problem with a retailer at some point in the future, it’s not an option for us to point to St. Paul and say, ‘Go talk to the state.’ It will be a local issue and local enforcement which will be demanded by the people that we work for.”

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Hassle notes another inconsistency with last year’s bill legalizing hemp-based edibles that contain intoxicating levels of THC. That bill was silent on taxation, licensing and regulation — a move designed to keep the impact of the bill quiet and limiting its exposure to additional legislative committees. Into the breach marched cities that cobbled together rudimentary ordinances to keep an eye on the industry. Sponsors of the edibles bill were supportive and have sought to remedy the gaps in last year’s law within Stephenson’s recreational marijuana bill.

“We’re glad to see the edibles products included in House File 100 and brought into a much more substantive regulatory framework. However, the current draft of House File 100 lacks meaningful involvement and authority and oversight by local governments,” Hassle said. 

Matt Hilgart, a lobbyist for the Association of Minnesota Counties, said local control is at the heart of the 87-county organization’s concerns with the Stephenson bill.

“Our members are strongly interested in exhibiting all of our local control mechanisms,” Hilgart said. “That is around licensing, zoning, land use and inspections.” The counties also want the bill to pay for increased costs for items such as law enforcement and extra services needed around large events.

Flavored tobacco comparison

Another exchange at the Commerce Committee illustrated the shifting roles and politics that the marijuana issue has created: “We allow a city to say a company can’t sell flavored tobacco, but they will not have the ability to say someone cannot sell marijuana in their city,” said Daudt, who has criticized those local bans in the past.

Stephenson responded by inviting Daudt to support another bill this session that would impose a statewide ban on flavored tobacco such as menthol cigarettes and cigars.

“I’m looking forward to voting with him when we bring the flavored tobacco ban bill to the committee and you can vote in favor of that statewide ban,” Stephenson said.