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Otsego directs staff to draft conservative cannabis zoning ordinance ahead of state licenses
Summary
Council voted 4–1 to direct staff to draft a zoning ordinance implementing the state cannabis law limits locally; staff recommended conservative, time‑limited interim uses, setbacks and operational rules while Wright County and the Office of Cannabis Management finalize processes.
The Otsego City Council on Dec. 9 directed staff to prepare Draft Ordinance 2024‑14 to regulate cannabis businesses consistent with Minnesota’s new statutory framework (identified in the record as "Minnesota statutes, 03/1942"). The motion to draft and publish the ordinance in summary form passed 4–1.
City planning staff summarized allowable cannabis business types under state law, local options for time/place/manner restrictions, and the limits on what local governments may regulate. Staff recommended a conservative approach: implement the local controls the statute allows now, then revisit regulations as the industry and the Office of Cannabis Management processes evolve.
Key elements described by staff include: limiting the number of retail licenses in line with population thresholds (a minimum ratio of one license per 12,500 people, which currently yields one license for Otsego); setbacks provided in statute (schools 1,000 feet, day cares 500 feet, residential treatment facilities 500 feet and park measurements based on active facilities rather than property lines); zoning districts proposed for retail/medical sales (B‑2 and B‑3) and industrial uses for cultivation/processing; and limits on hours of operation (staff included a 7‑day, 10 a.m.–9 p.m. option in the draft ordinance instead of the statute’s default hours).
Staff also noted Otsego has a joint powers agreement (JPA) with Wright County so the county will act as lead local government unit for registration and initial administrative duties, with tax revenue collected within a community returning to that community. The county is drafting its related ordinance and enforcement approach.
Council Member Ryan Dunlap opposed the motion, saying the city's proposed restrictions could effectively regulate the industry out of Otsego and raised concerns about inconsistency with how alcohol and distilleries are treated. "This ordinance would restrict businesses to the point that they would almost effectively be regulated out," Dunlap said.
Next steps: staff will draft Ordinance 2024‑14 for council review, include required public notice and, if council directs, return for a future public hearing and final adoption.
