Up in smoke: Albert Lea rejects plans for city’s first cannabis dispensary

Standing at the back of the Albert Lea City Council meeting on Monday, Jacob Schlichter watched as council members voted down the registration of his cannabis dispensary, The Smoking Tree.

Schlichter received his cannabis microbusiness license from the Minnesota Office of Cannabis Management on July 17 after starting the application process a year before. He completed his city registration shortly thereafter. The council vote was the final step before he planned to open his business Tuesday with a soft launch.

But instead of managing product shipments as planned, he spent Tuesday consulting with an attorney to explore his legal options.

“Everyone [in the cannabis industry] is panicking,” Schlichter said about the council’s decision. “Does this set a precedent of cities and counties denying things they don’t want? And saying, ‘Hey, have fun trying to sue.’ ... That’s a huge pay-to-play type of behavior.”

Although Schlichter holds a license from the OCM, state law prohibits him from beginning operations until he secures local retail registration. In May, he signed the lease for his store in a strip mall on Bridge Avenue near Interstate 90. The shop was outfitted with shelves and decorations, but it sits empty.

Following Minnesota’s legalization of recreational marijuana two years ago, The Smoking Tree was one of a handful of microbusinesses to recently gain state approval.

Schlichter said he hopes to resolve the issue with the City Council rather than take legal action against it.

The city has a limit of two cannabis retailers, as local governments need only approve at least one cannabis business for every 12,500 residents. The state law also allows cities and counties to restrict where they’re located and how far they must be from places like day cares, schools, parks and churches.

At the meeting, Mayor Rich Murray expressed his opposition to the city hosting cannabis businesses: “I do not like the way the state Legislature, and the governor, has rammed this down our throats with very little say in the process — all because they’re hungry for more revenue.”

City Attorney Joel Holstad told the City Council to expect litigation if it defied the state statute before voting Monday.

“If we were to try to block it, we would be sued by the state of Minnesota. ... A legitimate defense of that lawsuit would cost easily $100,000 with not an impossibility of winning, but a highly unlikely chance of prevailing,” he said.

Schlichter reached out to the OCM about the denial. In an email reviewed by the Minnesota Star Tribune, OCM Compliance Supervisor Kirk Johnson told Schlichter, “OCM does not have legal authority to compel a local government to comply with state law or mediate legal disputes between license holders and local governments.”

Schlichter said he feels caught in the middle of a dispute between city and state governments.

“I feel like I’m collateral damage,” he said.

Rigg said the state government could impose consequences on Albert Lea for failing to approve the license. In addition to potential lawsuits from Schlichter or the state, he noted the city could risk losing a portion of its local government aid funding.

“I don’t want anyone to have any kind of illusions that we had any significant control or much say,” Rigg said about cannabis businesses.

The council voted 4–3 against registering The Smoking Tree, with Murray and Council Members Rachel Christensen, Keith Van Beek and Larry Baker voting no and Council Members Jason Howland, Reid Olson and Brian Anderson voting in favor.