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Ely permits on-sale CBD

by Tom Coombe

After weeks of debate, Ely city officials are moving forward with an ordinance that would allow both on and off-sale licensing for the sale of cannabinoid-based products.

On a 6-0 vote with member Paul Kess absent, the council approved the first reading of an ordinance recommended by an ad hoc committee of mayor Heidi Omerza and council members Jerome Debeltz and Angela Campbell.

Earlier council discussions yielded some misgivings about on-sale licensing, which would allow someone to buy a “CBD” product such as a THC beverage and consume it on-site.

Yet the ordinance now moving forward allows both on and off-sale provisions, with on-sale licensing permitted for businesses that also operate as a restaurant.

The most persistent opponent of on-sale licensing, council member Al Forsman, who tried without success to remove the on-sale provision from the cannabinoid ordinance.

Forsman’s motion to do  so died because of a lack of support.

“I don’t feel that on sale is appropriate,” said Forsman. “I made it clear when it was sent to committee to review that this was going to be where I stand. I will not vote for the second reading as it stands.”

City Attorney Kelly Klun explained the rational for allowing on-sale licensing, which stemmed first from a since withdrawn request from an entrepreneur who looked to open a CBD lounge, as well as a request from a local restaurant that was looking to sell THC infused beverages.

“We were aware that an existing restaurant wanted to sell (beverages),” said Klun. “The committee is supportive of that request as long as the establishment meets the requirements of a restaurant.”

Klun said the restaurant provision is consistent with Sunday liquor sale provisions.

“In order to have Sunday liquor you do need to serve food,” said Klun.

The ad-hoc committee, which was formed after council members wrestled, without success to find consensus on the issue, considered three potential ordinances.

One would restrict CBD sales to CBD “exclusive” businesses, which in essence would require gas stations or other businesses that currently sell those products to take them off of their shelves.

“The committee felt that was too restrictive,” said Klun.

Another ordinance would have limited CBD sales to “off-sale” only, which would allow the sale but not permit buyers to consume those products on-site.

“In light of where the products are already being sold, the committee was supportive of off sale,” said Klun.

The on-sale provision came in response to the restaurant request, and requires those businesses to keep THC beverages or other products behind the counter.

That was confirmed after Campbell questioned whether on-sale licensees could sell “gummies” in addition to THC beverages.

“I suppose they could sell gummies as long as they were a restaurant,” said Klun.

Regardless of city action, cannabinoid products such as gummies or THC beverages are legal to use by those age 21 or over, after legislative action by Minnesota lawmakers in 2022.

Klun has reiterated that the city’s only authority relates to licensing the sale of those products, and the move by the council to enact an ordinance will require all CBD retailers to obtain a license.

Council member Adam Bisbee said he wanted to revisit the beverage wording in the ordinance, particularly given anticipation that state lawmakers will soon approve the use of recreational marijuana.

“As currently written now, would this open up any type of loophole that you could see where this would allow people to light up a joint at the bar?” said Bisbee.

“At this point it’s edible cannabinoid as we describe as tied to state statute, not smoking,” said Klun.

At least for now, the city is dealing only with those products already legalized and Omerza reminded the council they were focusing only on that issue.

“We’re looking at a very short portion of what we can do,” said Omerza. “We don’t know what’s going to be happening at the end of the legislative session. We’re just looking at cannabinoids right now.  This part of it.”

The council debate also produced question about the impact of THC beverages.

“Is there that much difference between alcohol and CBD drinks?” asked Debeltz.

Klun responded “I’m no expert on THC intoxication,” and pointed out that the impact of alcohol varies by person based on several variables, including the weight of the person.

The ordinance, which will be addressed again at an April 5 public hearing at 5 p.m. at City Hall, also establishes licensing fees and penalties ranging from $300 to $2,000 for those who violate the city provisions.

“What we’re saying here is it will be unlawful for anybody to engage in a sale without a license, and then we describe what you can do to be able to sell on-sale or off-sale,” said Klun.

“Every existing vendor will have to come in and get a license,” added Langowski.

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