Mankato moratorium on pot shops OKed

May 23—MANKATO — The Mankato City Council has approved a year-long local moratorium on soon-to-be legal pot shops, but city leaders reassured supporters of legalized cannabis that the action probably won't delay local access to the drug by even a day.

The council vote on the moratorium came two days after the state Senate joined the House in voting to make Minnesota the 23rd state to legalize marijuana. If Gov. Tim Walz signs the bill as promised, it will become legal on Aug. 1 for Minnesotans to grow, possess and use marijuana at home. Sometime later — after a state regulatory office gets organized, sets procedures and issues licenses — pot shops will be authorized to open for business across the state.

In anticipation of the legislation passing, the council scheduled a public hearing for Monday night on an interim ordinance "prohibiting the sale, testing, manufacturing, cultivating, growing, transporting, delivery, and distribution of cannabis products in the city of Mankato" for up to 12 months.

The pause was to give city officials time to craft local regulations, but the wording sounded ominous to potential proprietors and customers of Mankato marijuana shops, prompting a couple of people to argue against the moratorium at the public hearing.

Chris Collins, a Belwood Drive resident and the head brewer at a local brewery, argued that drugs like nicotine and alcohol are widely sold in Mankato and that they, along with illegal drugs such as fentanyl, are much more harmful than cannabis.

"No adult has died from a cannabis overdose," Collins said. "Opioid deaths are up 43% in the state, up to 978 lives in a year. Six thousand deaths in Minnesota from nicotine. Alcohol overdose deaths in Minnesota are around 62 a year."

A moratorium on shops in Mankato would serve no purpose while allowing cannabis businesses in nearby cities to dominate the marketplace, he said.

Lynn Butcher, who lives on West 8th Street, said Mankatoans showed their support for legal marijuana by electing lawmakers who strongly backed the idea. And Butcher said that the moratorium will deny Mankato a new revenue source that would ease the burden on property taxes.

"That's insanity to me, to put off revenue for an entire year when you're raising property taxes on residents of the city," she said.

But none of the seven council members indicated any interest in trying to permanently prohibit pot sales in the city, and City Manager Susan Arntz and City Attorney Pam Whitmore emphasized that the state legislation doesn't allow cities to do that even if they want to.

Instead, the moratorium gives the city up to a year to study its options and determine whether it wants to control the number of shops, restrict the hours of operation and set zoning rules to keep sales away from schools, daycare centers and parks.

"Having that time to put in place what is right for the city of Mankato is important," Whitmore said.

Arntz said the moratorium can be repealed in less than a year once the council settles on regulations.

They also noted that some state officials are predicting that the statewide licensing office — which will be responsible for authorizing all of the new retail shops, growing operations and processing businesses — won't be issuing its first licenses for a year or more.

"There's a good chance we won't actually slow down the process of sales," Council member Dennis Dieken said before joining the unanimous vote in favor of the moratorium. "And obviously with the licensing process taking that much time, I think across the state you won't see other cities with licensed facilities to sell this product before us."

Council member Michael McLaughlin noted that the moratorium only applies to cannabis businesses, not to consumers.

"There's nothing in this that stops anyone from personal use from home-grow," McLaughlin said. "If they need it for medical purposes or recreational, they can still use cannabis as soon as it's legal for the rest of Minnesota. ... They can grow in town during the moratorium period."

The moratorium also has no effect on the lower-potency gummies and other THC-infused edible products authorized by the Legislature a year ago. In fact, the new law will allow those less-potent cannabis products to be sold at any liquor store the day after Walz signs the bill, Whitmore said.

Although the state legislation doesn't give local governments much regulatory leeway, cities will have one important decision to make. The new law permits city councils to limit the number of shops to one for every 12,500 residents — meaning Mankato could have as few as three or four cannabis retailers. Or the council could decide to allow as many shops as the marketplace will support.

Arntz also noted that the businesses won't necessarily bring a revenue windfall to cities. The legislation provides for a 10% tax on retail sales of cannabis products, but just 20% of that tax will be directed by the state to local governments.