HomeMy WebLinkAbout2024-010 (Denying the Issuance of a CBD Retail Establishment License to CBD House)City of Stillwater
Washington County, Minnesota
RESOLUTION 2024-010
A RESOLUTION DENYING THE ISSUANCE OF A CBD RETAIL ESTABLISHMENT
LICENSE TO CBD HOUSE
FINDINGS OF FACT
WHEREAS, on Sept. 6, 2022, the City Council enacted licensing regulations for
cannabinoid ("CBD") retail establishments and began accepting license applications on
October 1, 2022; and
WHEREAS, City Code Section 41-10 subd. 7 states that no more than two CBD retail
establishment licenses shall be issued at any one time and that if more than two applications
are submitted, then a point system shall be used to determine which businesses are issued
the two licenses; and
WHEREAS, pursuant to Resolution 2022-142, adopted by the Stillwater City Council
on November 15, 2022, the Council authorized three CBD retail establishment licenses due
to special circumstances that justified a deviation from the ordinance; and
WHERAS, the CBD House ("Applicant"), located at 125 Main Street South, Stillwater,
was one of the businesses that was approved for a CBD retail establishment license for
calendar year 2023; and
WHEREAS, the Applicant has applied for the renewal of its CBD retail establishment;
and
WHEREAS, the Applicant's business is located in the Central Business District, which
is not located in an appropriate zoning district, and therefore, the Applicant is unable to obtain
a conditional use permit, as required by City Code 31-325 and therefore, the applicant does
not comply with the zoning requirements; and
WHEREAS, as required by City Code 41-10 subd. 15, the Police Department
conducted a compliance check on December 29, 2023; and
WHEREAS, the business failed the compliance check when Applicant's employee
sold to an underage person in violation of Minn. Stat. §151.72 subd. 3(d) and City Code 41-
10 subd. 14(4) and subd. 17(1); and
WHEREAS, the employee did not check for identification in violation of Minn. Stat.
§151.72 Subd. 5c, and City Code 41-10 subd. 14(6); and
WHEREAS, the employee allowed underage persons in the store, which is a violation
of City Code 41-10 subd. 14(5); and
WHEREAS, the employee who sold the product to the underage person is under the
age of 21, in violation of City Code 41-10 subd. 14(8), which states that no one under the age
of 21 shall sell intoxicating CBD products; and
WHEREAS, the product purchased by the underage person were not properly labeled,
in violation of Minn. Stat. §151.72 subd. 5 (a)-(f) and City Code 41-10 subd. 14(10); and
WHEREAS, the underage person reported that the product that was purchased
contained 20 mg of THC per serving, which is in excess of the 0.3% THC limit allowed in
State Law and City Code, and is a violation of the packaging requirements of 5 mg of THC
per serving, Minn. Stat. §151.72 Subd. 5a(f) and City Code 41-10 subd. 14(10); and
WHEREAS, other products in the business were examined by law enforcement and
one of the testing certificates revealed that the product contained more than 3.0% THC and
another testing certificate revealed that the product contained more than 0.5% THC, both of
which are in excess of the 0.3% THC limit allowed by State Law and City Code, and is a
violation of Minn. Stat. §151.72 subd. 3(a) and City Code 41-10 subd. 14(2) and City Code
31.514.1 subd. 5(1); and
WHEREAS, one of the testing certificates examined did not contain the batch number
of the product it purported to be testing, in violation of Minn. Stat. §151.72 subd. 4(a) and
subd. 5(a)(3); and
WHEREAS, many of the packages contained labels that the products were
manufactured and distributed by CBD House, 125 Main Street South, Stillwater, however,
manufacturing is prohibited unless it is an accessory use as part of a brewery or distillery,
pursuant to City Code 31-514.1 subd. 5(3); and
WHEREAS, according to the incident report from the compliance check, the clerk
informed the underage person that "they were in the process of making more gummies in the
back" which is considered manufacturing, in violation of City Code 31-514.1 subd. 5(3); and
WHEREAS, based on website information, the business offers delivery of most of its
products within 5 business days, which is a violation of City Code 41-10 subd. 14(13), which
states that intoxicating CBD products cannot be delivered to a location outside of the retail
establishment; and
WHEREAS, the business does not comply with zoning; nor does it have a conditional
use permit, in violation of City Code 31-325; and
WHEREAS, the City Council heard all testimony and reviewed all evidence presented
at its regular City Council meeting on January 16, 2024, in which the Applicant was invited to
attend and the Council accepted and admitted all materials contained in the City Council
packet into the record.
NOW, THEREFORE, be it resolved that based on the aforementioned Findings,
evidence and testimony, the City Council of the City of Stillwater does authorize as follows:
1. Adopts the Findings above and hereby DENIES the renewal application of a CBD
retail establishment for the CBD House; and
2. The retail establishment must be immediately closed, effective January 17, 2024,
and shall remain closed until the Police Department confirms that all intoxicating
CBD products have been removed from the business location and the business is
in compliance with State Law and the City Code; and
3. Internet sales or deliveries of intoxicating CBD products shall cease immediately
and are prohibited; and
4. Manufacturing of all CBD products (intoxicating and nonintoxicating) shall cease
immediately and are prohibited; and
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5. The Applicant cannot apply for a license or registration from the City of Stillwater
until the Office of Cannabis Management is issuing licenses for such businesses;
and
6. The license fee shall be refunded to the Applicant; and
7. Any violations of this Resolution shall subject the Applicant to administrative and
criminal penalties, as authorized by State Law and City Code.
Adopted by the Stillwater City Council this 16th day of January, 2024.
ATTEST:
Joseph Kohlmann, Acting City Clerk
CITY OF S WATER
Ted Kozlowski, Mayor
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