Richfield Moratorium Illustrates THC Regulatory Pickle for Cities

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The most surprising result of Minnesota’s 2022 legislative session was the (some say accidental) legalization of certain tetroahydrocannabionol (THC) edibles, aka chewing gums. As reported here by Peter Callaghan the policy was originally intended to clarify the rules regarding “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 future of legal pot might be a bit too much for many elected officials, at least as things stand. Because it flew under the radar, the state’s THC legislation lacked many of the details you’d normally find in statewide policy regarding things like taxation, inspections, l packaging and other product rules.

As a result, cities scrambled to reconcile previously hostile stances against pot with the new era, and a wave of THC moratoriums erupted locally. 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 decision that came with a slight degree of controversy, but underscores the need for more THC laws to help cities clarify the situation.

“I don’t think that’s a good policy-making approach,” said Sean Hayford Oleary, council member representing Richfield Central District. He was the only Richfield elected official to vote against the moratorium and laid out 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. Since nearby towns have not regulated the products, and online ordering means most people can access the products, whether the towns legalize them or not, the moratorium unduly hurts businesses in the town. After all, he reasoned, Richfield is a small town sandwiched between Minneapolis and Bloomington, which makes it particularly vulnerable to arguments about municipal fragmentation.

“The problems are with the use of the product and the solution is with bricks and mortar sales in the town of Richfield,” Hayford Oleary explained to his council colleagues. “I don’t think there’s a good connection between the role and the solution (that was) laid out.”

It’s not just Richfield who has faced this kind of dilemma between local businesses and unregulated THC. Other cities in the state have passed similar moratoriums, which allow one-year limits on products.

The League of Minnesota Cities, a municipal lobbying organization in the state, offered advice around policy choices for municipalities, and suggested moratoriums as an option for cities struggling with THC regulations. Cities that have adopted similar moratoriums include Lauderdale, Hastings and Stillwater. Woodbury and Edina are the only cities to have officially adopted licensing regulations, although other major suburbs like Eden Prairie, St. Louis Park and Apple Valley are currently considering it.

On the other hand, St. Paul, Minneapolis, and most other major cities have taken a more passive approach and let things play out. Given that Delta 8, for example, has been legal for years and the growing wave of cannabis deregulation will likely come quickly to Minnesota cities, there’s a lot of economic activity likely to quickly form around the sales. Whatever gains there are from eventual product regulation and taxation will be in place early this year as customers begin to form habits and build relationships with retailers.

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

“Passing this moratorium will not prevent the people of Richfield from having access to this product,” said Hayford Oleary. “They can go to either of the neighboring towns that continues to allow it; they can go online with almost no age verification, anyone with a credit card or PayPal account. It has nothing to do with regulating liquor sales where we have the tools and can significantly prevent access.

The tone of the argument sounds a lot like the heated conversations of local governments about tobacco or alcohol. There are specific issues around packaging, dosage and access to minors that concern Richfield executives like Mayor Maria Regan Gonzales and council member Mary Supple. At the last city council [PDF]the city’s police chief, who has a long history of fighting cannabis use, testified to concerns about unregulated sales of THC in the city.

“We’ve been very strong on regulating things like flavored tobacco,” said council member Simon Trautmann, who represents Richfield’s westernmost neighborhoods. “But now we have THC products that are chocolates, that are gummies, and that can be sold in the same places more aggressively than flavored tobacco.”

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The resulting limbo is a difficult situation for towns like Richfield that have long prioritized regulation over products like THC, which pose risks to public health and safety. Without regional or statewide guidelines, they find themselves between a rock and a hard place and faced with difficult choices about how to balance a public safety concern with the banning of businesses.

But with the Democratic-Farmer-Labour (DFL) in control of both houses of the legislature, the upcoming session, clarifying the THC rules and – probably for electoral reasons — legalization of marijuana use writ large will likely appear early on the register. Perhaps the moratorium in Richfield and other cities will be rendered useless by the rapid regulatory changes around the legalization of pot.

The hope for Richfield, who passed the moratorium on a 4-1 vote on October 25, is that they could work out a firmer form of relegation before the one-year policy expires.

In the meantime, other Minnesota cities have a choice: accept a bit of uncertainty and loosening control, or push back a booming small industry. Granted, not everyone sees a THC store as an asset to the community, but with small brick-and-mortar retail experiencing a low-key slump, leasing commercial space is certainly a good thing for towns like Richfield or dozens more. around the metropolitan area.

With a DFL trifecta in place after this week’s election, the state legislature is expected to make legalizing THC and pot a priority in the upcoming January session. This will help city councils and exasperated staff deal with what has become a delicate situation around THC and open up new opportunities for strip malls across the Twin Cities metropolitan area.

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

Hopefully the council member won’t have to worry for long.

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