This was the main question at New Ulm City Council’s work session Tuesday. As Minnesota is preparing to open licensing to sell cannabis in 2025, New Ulm is preparing to put regulations in place.

City Manager Chris Dalton said the purpose of the work session was to discuss the initial steps on how to zone cannabis retail businesses in New Ulm.

The two major issues to consider is how many cannabis retail licenses the city should allow and whether to maintain state buffers.

Currently, Minnesota has a buffer zone prohibiting cannabis businesses from operating within 1,000 feet from a school and 500 feet from a park or day care. The city could choose to keep the state standard or modify it.

Minnesota’s standard cannabis buffer law prevents marijuana retail businesses from operating with 1,000 feet of a school and 500 feet from a day cares and public parks. The above map of New Ulm highlights the location of all schools (light red), day cares (light blue) and parks (light green) in the city limits. A black line is draw around the buffer perimeter for all restricted areas. If New Ulm adopts the state standard, cannabis based retail would be limited to the extreme northwest and southwest of the city.

Dalton showed the council a city map incorporating the state buffer zones around all schools, parks and day cares. Based on this map, cannabis retail would be limited to the northwest and southwest ends of town. The downtown business core on Minnesota Street would be restricted based on these buffers.

Dalton said another factor to consider is if a marijuana dispensary were to open within the city, it would be granted the same zoning buffer. Schools, day cares and parks would be prevented from opening near the new dispensary.

“It goes both ways,” he said. “Limiting licenses would allow you to develop new areas or vice versa.”

State regulations prevent the city from banning all cannabis licenses. At least one license must be allowed per 10,000 people. With New Ulm’s population at 14,000, this means at least one license must be available. The city does option of placing a maximum cap on cannabis licenses.

Dalton said Mankato used the one license per 10,000 people standard and set the license limit at four.

Council Andrea Boettger asked Dalton what he believed the entrepreneur demand is for cannabis-based businesses in New Ulm.

“If you go free market, people will open them,” Dalton said. “How many will survive, I do not know.”

“That’s what I want to be careful about,” Boettger said. She did not want to see too many cannabis businesses opening and then immediately closing because the city could not support the demand. This would leave New Ulm with empty storefronts.

“I am for free enterprise, but I think there is a balance for what the market can tolerate,” she said.

Councilor Eric Warmka said he was comfortable with the state’s current buffer limits and believed two or three licenses for retail would work.

“I think we give the market a chance to see what the interest is,” he said.

The idea of limiting licenses to three was supported by Glenn Hauser, a potential cannabis retailer. During the work session, he told the council he did not think New Ulm could support more than three cannabis retail licenses.

Boettger asked how difficult it would be for the city to modify license limits if demand turned out to be higher than expected.

City Attorney David A. Assaf said it would be easier for a city to increase the number of licenses rather than decrease it.

“I am leaning towards two,” Boettger said. “It gives one at each end of town and keeps them out of those buffer zones.”

Council Tom Schmitz said he felt strongly at least two retail licenses should be granted to allow competition.

“If Mankato has four, I think two would be appropriate for us, three at the most,” he said. Schmitz also asked what municipal revenue was involved with licenses.

Dalton said the city would receive a portion of sales tax and could charge a small registration fee.

Councilor Larry Mack believed starting with two was a good idea. If demand was higher, the city could add more.

The entire council was comfortable using the state buffer regulations for zoning.

No formal action was taken during the work session. Dalton said staff would use council comments to draft an ordinance to bring before New Ulm’s Planning and Zoning Commission. The Planning Commission is having a special meeting on Feb. 13 to make recommendations.

Boettger praised the city for being proactive with cannabis regulations. She also believed it was important for the city to be ahead of this change to avoid problems later.

“If we don’t set the tone and the rules, change is coming to us,” she said.