Commission approves Leafline Labs conditional use permit; odor controls and monitoring tightened

The Cottage Grove Planning Commission on March 24 recommended approval, by a 7-0 vote, of a conditional use permit for Leafline Labs to operate at 90 7th Street South as a medical cannabis combination business under the state Office of Cannabis Management (OCM).

Staff summary: Sam (staff member) said Leafline’s property, about 21.84 acres in the Cottage Grove Business Park and zoned I-1 general industry, has operated under a conditional use permit since 2014. Changes in state law creating new license types and the creation of the Office of Cannabis Management require Leafline to apply for a new local conditional use permit to align local approvals with the forthcoming state licensing structure. The applicant is not proposing any building footprint changes as part of this application.

Why it matters: Leafline is one of two medical cannabis producers in the state and supplies medical products statewide. The change would allow the facility to allocate products into both the medical and the adult-use (recreational) marketplace after state licensure, while remaining subject to local performance standards and buffers in city code.

Key regulatory and operational points noted by staff and the applicant: - State transition and local licensing: Sam stated the state statute under which Leafline currently operates will be repealed on 12/01/2025, and businesses must obtain the new state license type; OCM had an application deadline of March 14, 2025 and is reviewing submissions. - Local performance standards and buffers: Staff cited City code Title 11418 performance standards; the existing facility was constructed prior to 2024 standards and is treated as an existing nonconforming structure for setbacks. Staff said the site meets required buffers to schools, daycares, residential treatment facilities and public-park attractions used by minors. - Security and inspection: A security plan must be submitted to the city director of public safety; state draft rules set additional security measures and inspections. - Odor mitigation and monitoring: Staff described recent odor complaints and noted Leafline’s prior required monitoring. The proposed conditions include a dilution-to-threshold (D/T) limit not to exceed 7 at property lines (condition 6 in the staff packet) and require updated, evidence-based odor monitoring and mitigation. Sam told the commission that a D/T of 7 is “scientifically considered to be an ambient odor level that could sometimes be considered a nuisance,” and that the city is adopting a more scientific measurement approach than past permits.

Applicant presentation and commitments: Tiffany Newbern Johnson, Director of Government Affairs for Leafline Labs and Green Thumb Industries, said Leafline hired Byers Scientific to assess mitigation options. Leafline reported it established an internal odor task force, purchased a meteorological station to better assess complaint source, and planned to procure molecular filtration units and a waterless vapor-phase odor control unit. Tiffany said the near-term capital costs exceed $125,000 and ongoing operating and maintenance costs exceed $100,000; the company pledged to implement immediate mitigation actions and a longer-term capital plan as funding and lead times allow.

Technical expert: Mark Byers of Byers Scientific explained his firm’s assessment approach, the chemical basis of cannabis-related odor, and a combination of activated-carbon filtration and rooftop vapor-phase systems as a multi-step mitigation strategy. Byers described monitoring and carbon-replacement sampling protocols and emphasized a data-driven service-and-maintenance program.

Questions from commissioners: Commissioners asked why the D/T threshold was set at 7 when some commissioners said they would prefer a lower threshold, how earlier complaint reports showed no detections on nasal-ranger readings, whether monitoring locations reflected prevailing winds, and whether operations would increase water and energy use under an adult-use product mix. Staff and the applicant responded: the 7 D/T is supported by precedent and a scientific threshold used by some experts; prior measurements may have reflected equipment calibration or sampling practices; monitoring locations in earlier permits were close to the building and staff recommended property-line monitoring; and changes in overall resource use would depend on future product mix and state rule specifics.

Public comment: Resident Bonnie Matters raised questions about water, energy and wastewater impacts and requested written responses and that her letter and the city's response be included in the meeting record.

Action and conditions: The commission moved to rescind the cited 2022 resolution and approve the CUP subject to the staff-recommended conditions with one editorial fix to condition language (removing a conflicting sentence in condition 5). The motion passed 7-0.

Next steps and enforcement: If Leafline receives preliminary state approval, the applicant has up to 18 months to secure local government signatures for OCM; OCM will then conduct final inspections and issue state licensure. City staff will require the applicant to register with the city before commencing operations, submit a final security plan to the director of public safety, and comply with the odor-monitoring and mitigation conditions attached to the CUP recommendation.