In a decisive move, the Wayzata City Council has halted plans to explore opening a municipal cannabis shop, opting instead to focus on zoning regulations for private cannabis businesses in the city. During its meeting on Tuesday night, the council unanimously agreed to cease dedicating resources to pursuing a city-owned cannabis operation.
MayorAndrew Mullin summarized the council’s decision, which followed an in-depth workshop earlier in the evening. “We had a unanimous consensus to put that action on hold, which would mean, for the foreseeable future, until this council or a future council brings it back we will cease expending resources, money, or staff time to exploring entering the cannabis business,” Mullin stated.
The council also approved the second reading of Ordinance 845, which establishes a regulatory framework for cannabis businesses in Wayzata. City Manager Jeff Dahl outlined the key components of the ordinance, which include licensing provisions and zoning restrictions and buffers aimed at limiting the locations where cannabis-related enterprises can operate.
City Manager Jeff Dahl explained that the ordinance includes licensing provisions and zoning restrictions designed to limit cannabis businesses to specific areas. “The council chose a conservative approach, limiting cannabis business locations to specific commercial areas such as parts of Wayzata Boulevard,” Dahl said. He added that the zoning rules incorporate state-provided buffer guidelines to ensure businesses operate in appropriate locations.
The ordinance stems from state legislation passed two years ago legalizing recreational cannabis. Wayzata had implemented a temporary moratorium on cannabis businesses, which expired at the end of last year, providing the city time to prepare its local regulations.
With the unanimous passage of the ordinance and the decision to shelve municipal cannabis shop plans, Wayzata now looks ahead to implementing the new zoning framework and preparing for potential applications from private cannabis businesses.
The City of Wayzata has released the agenda for the upcoming City Council meeting on January 7th, 2025, highlighting several key items of interest for the community.
The Council will begin with a workshop from 5:30 to 6:30 p.m., and engage in a discussion regarding Phase 2 of the Municipal Cannabis Dispensary Feasibility Study. The study, conducted by Point Seven Group, continues to explore the potential for cannabis dispensaries within the city. This ongoing discussion is expected to shed light on the feasibility of either moving forward with or abandoning municipal dispensary plans for Wayzata.
In addition to the study discussion, the meeting will feature the swearing-in of newly elected city officials, including MayorAndrew Mullin, Council Member Alex Plechash, and Council Member Ken Sorensen.
In another notable item, the council will consider the approval of Wayzata’s 2025 Legislative Priorities. These priorities will outline the city’s key policy goals for the upcoming legislative year, guiding its advocacy efforts at the state level, including a bonding request that includes an additional $2 million for public safety, a continued sales tax exemption for City construction projects including Panoway, Klapprich Park, Wayzata Beach, and Shaver Park; pursuit of a potential food and beverage tax / local sales tax, and local control on fines and fees to mitigate nuisances brought by visitors. See the attached draft of priorities here:
Residents are encouraged to attend the meetings or follow along remotely for updates on these important discussions and decisions.
The Council and City Staff may gather at the Wayzata Bar & Grill immediately after the meeting for a social gathering, all residents are invited to attend.
In a sparsely attended City Council meeting on December 3, 2024, only three of the five members of the council were present to deliberate Ordinance 845, a proposed measure regulating cannabis businesses within city limits. After extensive discussion, the council lacked the required votes to advance the ordinance, resulting in the issue being tabled until the December 17 meeting, when the full council is expected to be in attendance.
The ordinance, prepared in response to Minnesota’s legalization of recreational cannabis, addresses zoning, licensing, and operational parameters for cannabis retailers. It would establish strict regulations, including a single non-municipal cannabis dispensary limit within Wayzata, buffer zones around schools and treatment facilities, and restrictive operating hours of 10 a.m. to 9 p.m.
Planning Consultant Eric Zweber presented the ordinance, noting that the state’s Office of Cannabis Management (OCM) has yet to finalize its rules. “We’ve taken a conservative approach, proposing the maximum restrictions allowed by state law,” Zweber said, highlighting buffer zones and limits on temporary cannabis events.
Discussion revealed concerns among council members. Mayor pro tem Alex Plechash criticized the state’s cannabis policy as “bad policy decisions from the state, rammed down our throats.” He advocated for larger buffer zones around treatment facilities, arguing they should match those established for schools.
Others questioned the clarity of the rules. “It feels backwards,” stated council member Molly MacDonald, expressing frustration over the two-step approval process that requires conditional use permits (CUPs) before a business can apply for a state license.
The Planning Commission previously recommended the ordinance after reviewing public input, including concerns about potential conflicts between non-municipal and municipal cannabis retail businesses. However, ambiguity around buffer zones and school bus stops prompted requests for further refinement.
The absence of MayorJohanna Mouton and council member Ken Sorensen complicated Tuesday’s proceedings. Ordinances in Wayzata require at least three affirmative votes from the five-member council to advance, regardless of attendance.
With only three members present, the council, led by Mayor Pro Tem, decided to table the vote after a 2-1 roll call. Plechash and Parkhill supported using property lines for buffer zones, while MacDonald opposed, seeming to favor building envelopes as the starting point for measurement.
Should the ordinance fail to pass before December 31, the city’s moratorium on cannabis businesses will expire, potentially leaving Wayzata without local oversight as the state continues to promulgate regulations on the fly.
The council aims to resolve the issue at its next meeting, scheduled for December 17, 2024.
The Wayzata City Council debates cannabis. Image courtesy Wayzata Community Television.
In accepting a dispensary business plan and approving consulting work for a municipal cannabis feasibility study, some members of the Wayzata City Council expressed reservations, given that the original goal of being the sole operator in Wayzata may no longer apply because municipal licenses don’t count toward population limits for licenses. The City may still seek to “diversify” revenues.
Acceptance of Municipal Dispensary Business Plan
On August 7, the Wayzata City Council accepted the first phase of the City’s Municipal Dispensary Business Plan, prepared by Point Seven Group.
The plan represents a significant step in the city’s efforts to explore the feasibility of operating a municipal cannabis dispensary, aligning with Wayzata’s strategic goals of diversifying revenue and maintaining community character and safety in the wake of Minnesota’s legalization of adult-use cannabis in 2023.
The Council reviewed findings from the dispensary business plan, which evaluated four scenarios for establishing the dispensary.
These scenarios included options ranging from utilizing a third-party delivery partner to managing delivery internally, with choices for either fully building out the dispensary or renovating a leased site.
All scenarios were projected to be profitable by year five, with the second scenario—using a third-party delivery partner and renovating a leased site—identified as the most feasible due to its lower barriers to entry and reduced upfront costs.
The first phase of the study was authorized at $15,000, funded by the city’s 2024 Capital Improvement Plan.
In a workshop held on June 4, the council had reached a consensus to continue exploring the feasibility of a municipal dispensary, which led to the acceptance of the first phase of the plan on August 7.
The City’s exploration of a municipal dispensary is part of its broader response to Minnesota’s cannabis legalization and aligns with its strategic priorities of revenue diversification and public safety.
The council’s acceptance of the plan indicates a cautious yet proactive approach to evaluating this new economic opportunity.
Prior to the vote council member Alex Plechash voiced his opposition to the City being in the recreational cannabis business, “…I’m philosophically opposed to the City getting into the business, so regardless of how good the business plan may be laid out, I’m not philosocally aligned with that, but I will vote to accept the report.”
Community Development Director Emily Goellner and City Manager Jeffrey Dahl reviewed the plan and recommended its acceptance, highlighting the importance of continued analysis to refine the financial model and stress-test the scenarios.
Feasibility Study
Shortly after accepting the Dispensary Plan, the Wayzata City Council voted 3-1 to approve a professional services agreement with Point Seven Group for the continuation of a feasibility study on a potential municipal cannabis dispensary.
The agreement, which encompasses Phases 2A and 2B of the study, totals $17,000 plus travel expenses and will be funded by the city’s Facilities Capital Improvement Plan.
The study, aimed at assessing the financial and operational viability of a municipal dispensary, is part of the city’s strategic priorities to diversify revenue and sustain community character and safety.
Phase 2A will involve updating the financial model, while Phase 2B will focus on operational preparedness.
The city anticipates making a final decision on whether to apply for a dispensary license in late 2024.
The council’s decision follows initial feasibility studies reviewed in June 2024 and reflects ongoing efforts to refine the financial model based on updates from the state’s Office of Cannabis Management.
Staff have also begun preparing for potential zoning ordinance updates to incorporate cannabis businesses, regardless of whether the city ultimately pursues the dispensary.
Council discussion
During the discussion, Mayor Johanna Mouton supported the approval of the contract, “We hire a lot of consultants as a small town, because we take on a lot of robust projects, we want the best to come to the table and assist us, we don’t have all of the staff for the grandiose ideas that we put forth, and Point 7 is so incredibly impressive, with their knowledge, with their professionalism, skillset, business oriented and minded, very impressive group.”
Council member Alex Plechash again voiced his opposition, “As I stated earlier, I have a philosophical opposition to the City or any government entity being in the business of endorsing or maybe even promoting the use of cannabis. I’ll say it again, I think this was a misguided piece of legislation that was passed, but it is what it is right now…. Just because we can do this doesn’t mean that we should do this, in my opinion.”
Plechash expressed displeasure that the City’s original plan to prevent another cannabis store from operating within city limits—similar to how the municipal liquor store operates—won’t work.
“…maybe the community doesn’t want it. We are going to get one, but do we really want two?”
Jeff parkhill
Council member Jeff Parkhill indicated more input from the community is needed, “I do think that maybe as a community, as a council, that there should be some sort of workshop that involves the police, and maybe the social worker that is with the police to get more information on how this is going to impact our community. It’s not just a financial decision, it’s potentially a moral and ethical decision also. I don’t know if I have a big problem with cannabis, but a lot of people do, I really think having a good chunk of our community supporting this next step would have been ideal, but definitely when we go for the application, that we should be really diligently working on that this fall with getting buy-in from our community because Alex [Plechash] may be completely right, maybe the community doesn’t want it. We are going to get one, but do we really want two [cannabis shops]?”
Further study by City staff showed that even if the City opens its own cannabis store, at least one other license may be granted because the municipal license doesn’t count against the license and population limits prescribed by the State of Minnesota.
City of Wayzata Community Development Director Emily Gellner clarified, “Now what has changed in the last few months is at first we thought we would be part of the lottery system, and we thought we would need to get in there and apply first, or we were confused where we would land, but where we have landed is that we are kind of in our own process completely, we are not part of that cap of one per town, we are not in that, we are on our own. So we could have a municipal store and one private retailer in town.”
After those comments, Council member Molly MacDonald questioned the projections, “I was very relieved to the stress testing portion of this agreement, on staff’s end. It’s crucially important for how their plans have shaken out, I see some serious red flags in there, it’s their business, so I have to trust it but I’m taking it with a rather large grain of salt… I’m very, very concerned about their revenue projections, I’m concerned about the lease agreements, I don’t think that’s right, so when you guys stress test, just test it hard.”
Approval
The feasibility study contract was subsequently approved 3-1 with Plechash voting against.
The work by Point 7 is expected to be completed by December of 2024.
Stay tuned to Wayzata.com on this developing story.
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