City Council Meeting: Cannabis Sales, Traffic Safety Grant, Park Expansion on Agenda

(KNSI) — The St. Cloud City Council will decide Monday whether to allow an established medical cannabis dispensary to expand into recreational marijuana sales, a decision that has already been postponed once.

LeafLine Labs, operating as RISE Dispensary at 3800 3rd Street North, is seeking an amendment to the Plaza 15 Planned Unit Development that would permit adult-use cannabis sales alongside its existing medical business. The company has operated in the city since 2016, initially opening as a drug store, a permitted use under the PUD’s general development plan.

The request comes after Minnesota legalized recreational marijuana, prompting LeafLine to seek a retail endorsement from the state’s Office of Cannabis Management. However, the PUD’s approval predates the city’s 2023 interim ordinance and 2024 Land Development Code standards that designated where cannabis businesses should locate.

The heart of the issue lies in zoning. Council members determined that cannabis retail stores should be restricted to C5 Highway Commercial zones due to their intensive land use and proximity to arterial roadways. LeafLine’s legal team contends the building, located just 50 feet from the Highway 15 corridor, would be zoned C5 if not for the PUD designation from 2007.

The property immediately adjacent to LeafLine is already zoned C5. City records show the subject property was zoned C5 for decades before the Plaza 15 commercial project was developed. In an October 16th letter to the city, LeafLine claims the store is squarely in the zoned area the Council deemed appropriate for cannabis businesses. The St. Cloud Planning Commission held a public hearing on September 9th and recommended approval of the amendment by a 5-0 vote.

The council conducted its own public hearing on October 6th but postponed action until Monday’s meeting after raising questions about the dual license and the location’s proximity to a city park.

It is also weighing LeafLine’s track record against concerns about setting precedent. Earlier this year, members denied a similar PUD amendment request from Wild Weed for a location at 2102 8th Street North. That property, surrounded by residential areas in a C2 district, was more than 3,500 feet from properly zoned C5 areas.

LeafLine’s attorney argues the situations are not comparable, noting that Wild Weed was seeking to open in a residential-oriented area far from appropriate zoning, while LeafLine has been operating for years in a location that abuts C5 zoning.

One significant factor complicates the decision: LeafLine cannot simply continue operating as medical-only if the amendment is denied.

Under Minnesota’s 2023 cannabis legalization law, LeafLine’s authority to operate under the old medical cannabis statute is sunsetting. The company now holds a Medical/Business Combination license from the Office of Cannabis Management, which allows cultivation with half of it designated for adult-use sales and permits eight retail locations statewide – one in each congressional district – serving both medical and adult-use customers.

According to LeafLine Attorney Carol Moss’s letter, the Office of Cannabis Management confirmed that combination licensees have statutory authority to sell both medical and adult-use products, and retail registration requirements do not distinguish between the two types of sales.

“The ability for the licensee to sell to non-medical customers is vital to the longevity of the business,” Moss wrote, noting that medical cannabis sales typically decrease significantly when adult-use dispensaries enter the market. However, the City Council is seeking clarification on whether LeafLine can continue to operate at its current location, selling only medical cannabis.

The RISE St. Cloud store employs more than 40 people, including 26 St. Cloud residents, and serves approximately 5,000 registered medical patients.

Other items on the agenda include a $90,000 federal traffic safety grant, a 12-month extension of the orderly annexation agreement with Haven Township, and authorization to purchase property at 548 33rd Street South adjacent to Mississippi River Bluffs Regional Park.

The meeting will take place at 6:00 p.m., October 20th, inside St. Cloud City Hall.

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