Can a City Stop Me from Operating A Hemp-Derived Edible Business?
July 14, 2023Yes – at least to a degree. But not as much as cities seem to think.
A local unit of government, however, may not prohibit possession, transportation, or use of cannabis flower or products.
Fortunately, Minn. Stat. 342.13(b) prohibits a local unit of government from prohibiting the establishment of a licensed cannabis business, but there are some exceptions to the general rule. Significantly, it does not prohibit a city from establishing zoning restrictions that may make it difficult to find a location.
For example, local units of government may adopt reasonable restrictions on time, place, and manner of operation of a cannabis business, so long as the restrictions do not prohibit the establishment or operation of a cannabis business. A local unit of government can also enact zoning ordinances that could make it difficult to open a cannabis business, but even then, a local unit of government cannot establish zoning requirements that would effectively prohibit the establishment or operation of a cannabis business.
The prohibition on cities precluding operation of a cannabis business within their borders applies – at least statutorily – to licensed cannabis businesses. Because we are still a ways out from the establishment of a licensing regime, cities should not be relying on the portion of the law that allows them to establish moratoria on “cannabis businesses” through January 1, 2025, but it appears that some cities are doing just this. Minn. Stat. 342.13(e) states:
If a local unit of government is conducting studies or has authorized a study to be conducted or has held or has scheduled a hearing for the purpose of considering adoption or amendment of reasonable restrictions on the time, place, and manner of the operation of a cannabis business, the governing body of the local unit of government may adopt an interim ordinance applicable to all or part of its jurisdiction for the purpose of protecting the planning process and the health, safety, and welfare of its citizens. Before adopting the interim ordinance, the governing body must hold a public hearing. The interim ordinance may regulate, restrict, or prohibit the operation of a cannabis business within the jurisdiction or a portion thereof until January 1, 2025.
This language seems to give cities an ability to prohibit the operation of a cannabis business within its borders through January 1, 2025. The statute, however, defines “cannabis business” as any business licensed under Minn. Stat. 342.01, et seq. There are currently no such licensed businesses and cities should not be permitted to use this to prevent the establishment of hemp-derived edible businesses.
Cities also point to their zoning and licensing authority to justify moratoria on hemp-derived edible businesses, but if you were operating legally prior to the effective date of a moratorium, you may have recourse if the city tries to shut you down through zoning ordinances. The doctrine of legal nonconformance requires the grandfathering in of a business that was operated legally prior to enactment of a zoning restriction that would otherwise render the business’s existence in violation of that zoning ordinance.
While a city can try to establish licensing requirements, to the extent those requirements impact zoning (e.g., a hemp-derived edible business can get a city license but may not be within 5,000 feet of a school), it is at least arguable that such ordinances are still based in zoning authority and should be subject to the legal nonconforming use doctrine.