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NEW ULM -- With a high probability that recreational marijuana will be legalized in Minnesota, the New Ulm City Council is opting to get ahead of the curve and establish a THC ordinance.
A special city council work session was held Tuesday to discuss how the city would regulate the sale of edibles containing hemp-derived THC.
Earlier this year, the state legislature passed an amendment that made the use of edible cannabinoid products that contain no more than 0.3% of THC legal in Minnesota.
Cities across Minnesota were caught off-guard by the sudden legalization of cannabis edibles, leaving many uncertain about how to regulate them. The law does not restrict what type of businesses can sell edible cannabinoids. The law does require the products only to be sold to individuals 21 and older, but few additional regulations are set. The law does allow local municipalities from creating their regulations.
During an August work session, the city council agreed to pass emergency regulations requiring sellers of edible cannabinoids to register with the city. The registration would allow the city to know which businesses were selling products. It also gave the city time to determine how to license the products.
Since then, city staff has been developing a potential ordinance regulating the sale of THC edibles in New Ulm.
City Manager Chris Dalton brought a draft of the THC ordinance to Tuesday's work session for additional input from the council.
As the draft stands, edible THC products would be treated similarly to how tobacco products are treated. Businesses selling the products would need to pay a fee for the license. The cost of the license would be the same as a tobacco license.
There were additional questions about how many edible THC licenses should be allowed in the city. Dalton was able to confirm that two smoke shops were selling edibles and the B&L bar was planning to sell THC-infused drinks. A single THC license would cover edibles and infused drinks.
Council President Boettger said she was fine with setting a limit on licenses, but wanted to make sure enough licenses were available for the businesses that wanted them.
Councilor Eric Warmka favored limiting the number of licenses. He did not feel there was a reason for every type of business to sell THC edibles in New Ulm. Warmka suggested six licenses were fair for a town of New Ulm's size but acknowledged did not know how many businesses would be interested in a THC edible license.
Boettger said as things change with the law, the city could make changes to the number of licenses if needed.
Councilor David Christian saw a potential ripple effect. He said if B&L serves THC-infused drinks and this brings in customers, other bars might need to serve it to keep up.
The council was in agreement that fines for selling THC products without a license should be high. With each violation, the fine would increase. Initially, the first violation was set at $50 and increased by $50 with each subsequent violation. The council recommended starting with a $200 fine and increasing it to $400 with a second violation.
Mayor Terry Sveine complimented the city on taking action on THC. He said that based on updates from the League of Minnesota Cities, other communities are taking no action and waiting for state input.
Dalton informed the council that following the recent election, Democrats will control the state house, state senate and governor in 2023. Gov. Tim Walz had indicated marijuana could be legalized in 2023. New Ulm might need to revisit the THC ordinance within a year.
"As the target moves, we will keep on moving with it, but I think this will be a good start," Dalton said.
Boettger agreed that by taking action New Ulm will not be a community starting from scratch when marijuana laws are further expanded.
The edible THC ordinance is expected to come before the council for formal approval in December. If approved the ordinance would likely take effect in January 2023
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The council established a special assessment for 2022 Delinquent Water and Wastewater Charges. This was a modification of previous procedures.
Finance Director Nicole Jorgensen said in the past these assessments were only certified once the property was sold. Recently the city learned these assessments could be certified before the sale of the property. To stay current on charges the city is now going back a year to certify delinquent charges.
Over the last year, the city had $7,781.98 in unpaid water and sewer charges.
Jorgensen said the city has found many of these delinquent charges are on rental properties. The renter moves out, leaving charges unpaid and it falls on the property owner to pay them.
The property owners all received notice of these charges. Some of the larger charges are on properties that were vacant for some time and charges have accumulated.
Amy Schlottman spoke on behalf of her father who had a rental unit assessed. She said her father was unaware there were delinquent payments on the property from the renter. The delinquent payments were from December 2021 through May 2022.
Schlottman said if they were made aware of these delinquent payments, the tenant responsible could have been evicted.
"It would be nice in the future if the city could let the landlords know a little earlier," Schlottman said.
She also requested the city consider forgiving this $339 assessment due to the circumstances.
Council President Andrea Boettger said the recent change in procedure has notified landlords of these delinquent charges sooner rather than after the property is up for sale. The assessment would have been placed on the property regardless, but the change helps identify the problem earlier.
Boettger was concerned that forgiving one of these assessments would open the door for others to come forward and request forgiveness.
Councilor Les Schultz felt the city was fixing an error and could have been responsible for some of these assessments. He suggested at least cutting the $339 assessment in half.
Boettger argued this was not fixing an error, but a change in procedure. These assessments would have gone to the property regardless of the change made in certification.
Jorgensen said property owners are seeing the assessments now rather than years later when trying to sell the property.
Boettger said this was an improved process that would have some growing pains. She did not believe they could cut the assessments in half for every property owner with a delinquent payment.
"Everyone is going to have a story about a tenant and why it wasn't paid," Boettger said.
Councilor David Christian said the council was alerted to the change in the certification process coming and it was correcting a glitch, alerting landlords to a problem earlier.
"We're taking a step in the right direction," he said.
Councilor Larry Mack made the motion to establish the special assessments with a second from Councilor Eric Warmka.
The motion passed 4 to 1 with Schultz voting against it.