St. Paul zoning proposal would give green light to cannabis businesses

The St. Paul City Council is considering new rules that would open 90% of the city's current retail space to cannabis shops .

Why it matters: The permissive zoning proposal is a sign that St. Paul leaders intend to roll out the welcome mat to marijuana businesses.

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• Officials hope the city can cash in on a potential $1.5 billion market when the state begins issuing licenses early next year.

The big picture: Minnesota doesn't allow cities to ban cannabis businesses — but cities can limit where and how many businesses to allow within their borders.

• Would-be entrepreneurs are anxious that strict zoning rules could wall off large portions of cities, cannabis industry attorney Leili Fatehi told Axios.

What they're saying: Fatehi, who helped craft Minnesota's new cannabis law, is "particularly pleased" with St. Paul's draft ordinance, calling it, "responsible, but permissive."

• "They're really recognizing the economic opportunity that is created by these businesses."

The fine print: St. Paul's zoning proposal would prevent dispensaries within 300 feet of a school — except downtown where they'd be allowed anywhere.

• Under state law, the city could be more restrictive, with buffer zones of 1,000 feet around schools and 500 feet around parks and daycare centers.
• Enacting the maximum buffer zones would make 63% of St. Paul's retail parcels off-limits to cannabis, city officials said. Instead, the city's proposal would only make 10% of current retail space off-limits.

St. Paul proposes to allow cannabis dispensaries downtown and anywhere in the city's retail corridors (pink) that is not within 300 feet of a school (blue). Map: City of St. Paul

Plus: St. Paul's rules would allow "microbusinesses" — the marijuana equivalent of a microbrewery, with both cannabis cultivation and sales on-site — along commercial corridors.

The intrigue: While Fatehi expects many suburbs to be less welcoming in their zoning laws, even Minneapolis may not go as far as St. Paul in allowing microbusinesses.

• An early draft of Minneapolis' rules would limit cannabis cultivation only to the city's heavy industrial neighborhoods.

The other side: Critics urged St. Paul to take a more cautious approach.

• In a letter to city officials, the Association for Nonsmokers argued for more zoning restrictions on cannabis businesses, at least as long as city and state officials are working out the regulatory kinks.

Reality check: St. Paul City Council president Mitra Jalali told Axios she isn't expecting "an explosion of growth right away" of new cannabis businesses.

• Even with permissive zoning laws, many entrepreneurs are still sorting out how to obtain a license from the state.
• "I think what we've advanced is pretty reasonable," Jalali said. "I'm not concerned about the pace of change."

What's next: The council plans to take public testimony at its meeting Wednesday, and again on Sept. 11.