NEW ULM – The first consideration of New Ulm’s new Cannabis and Hemp Retail Business and Temporary Cannabis Event ordinance was held by the City Council Tuesday.

The new ordinance would establish regulations and conditions for operating cannabis businesses and events.

City Manager Chris Dalton presented the council with a draft of the ordinance along with staff recommendations. During the first reading of the ordinance, the council had five key issues to consider: number of registrations; the cost of registration; hours of operation for cannabis businesses; hours of operation for cannabis events, and whether to allow cannabis consumption during cannabis events.

The council set the number of cannabis licenses allowed in New Ulm at two. This was to ensure competition. Staff said it would be easier to increase the number of licenses later if needed, than to decrease it.

The council accepted the staff recommendation to set the cannabis license registration fee at $350 and $700 for license renewal.

For hours of operation, staff recommended 10 a.m. to 10 p.m. each day of the week for consistency.

Dalton said the state has set the hours at 8 a.m. to 10 p.m. Monday through Saturday and then 10 a.m. to 10 p.m. Sundays, but gave the local jurisdictions the option to limit the opening hours.

Council President Andrea Boettger preferred giving businesses the option to operate from 8 a.m. to 10 p.m. during the weekdays and Saturdays. She was not sure why the city needed to restrict opening hours to 10 a.m. when many businesses open at 8 a.m. throughout the week.

“During the week I think they should be allowed to open at 8 a.m. if they want and if they don’t want to be open until 10 p.m. they don’t have to be,” she said “but I am not for restricting business hours if we’re already giving them 12 hours a day.”

Councilor Tom Schmitz said he liked the consistency of the 10 a.m. to 10 p.m. time limit, but he preferred to not over regulate businesses. If a business wanted to open at 8 a.m. he did not see a reason for the city to prevent it. Schmitz said 8 a.m. is a traditional opening time for many businesses.

The council decided to keep the 8 a.m. to 10 p.m. hours for Monday through Saturday and 10 p.m. to 10 p.m. Sunday for this first reading with the understanding this could be changed for the second reading based on community feedback.

The fourth issue was setting the hours of operation for temporary cannabis events, which staff also recommended setting at 10 a.m. to 10 p.m. The council agreed this was appropriate for special cannabis events.

Schmitz viewed the temporary cannabis events as similar to a beer garden, which typically starts later in the day.

The fifth issue to consider was whether to allow on-site consumption at temporary cannabis events. The council was given three options: either to not allow it; only allow it inside private businesses or allow it outside but in a commercially graded fenced area.

The council struggled with which option to choose. There was some confusion over what a “temporary cannabis event” entailed.

According to the state definition, it is a cannabis event that lasts no more than 4 days, organized by a person holding a cannabis event license.

City Attorney David Assaf said that across the state there was uncertainty about what a “cannabis event” would look like, but the city council had the authority to restrict consumption and use of cannabis at these events. He further explained that consumption covered all forms of cannabis, such as liquids, gummies and smoke. The city could also choose to determine whether or not to allow on-site consumption at cannabis events based on a case-by-case basis.

Schmitz again compared the temporary cannabis events to temporary beer gardens, but the difference is cannabis use is restricted in city parks. This means any cannabis event would be limited to private property.

“I wonder where they would host something like that,” Council Larry Mack said. A zoning ordinance previously approved by the city prohibits cannabis sales and uses within 1000 feet of a school, 500 feet of a daycare, and 500 feet of a park.

Councilor Eric Warmka said that based on the already existing restrictions, it appeared like any cannabis event or festival would need to be held without the consumption of the products.

“That’s not a really good festival,” he said.

Schmitz said the three options are not to allow consumption; allow consumption in an outdoor fenced area or only allow consumption in indoor locations: However, since indoor smoking is prohibited it would be limited to edible products.

Dalton asked if the city could restrict flowered cannabis/smoke consumption during temporary events, limiting it to only edible uses. Assaf confirmed this type of restriction was allowed.

Schmitz said he wanted to lean toward less regulations. He preferred option three to have it permitted inside a fenced location.

Boettger also leaned toward less regulation. She believed that based on current zoning regulations, it would already be difficult for anyone to find a location to hold a cannabis event or festival in New Ulm. However, if someone did find an appropriate location to hold an event, the council still had the ability to set restrictions or deny the permit on a case-by-case basis.

Warmka said he was fine with the third option and made the motion to conduct the first hearing of the ordinance with a second from Schmitz which was passed unanimously by the council.

The council will need to conduct a second reading of the cannabis ordinance before it becomes law.