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Willmar businesses to pay $2,000 licensing fee to sell newly legalized edible THC products

Willmar City Council on Sept. 19 approved a THC ordinance and an amendment to the 2022 fee schedule to incorporate the new fee.

Delta-9 THC edible gummies sit behind a glass case at D & D Smoke on Tuesday, July 19, 2022.
Delta-9 THC edible gummies sit behind a glass case at D & D Smoke on July 19, 2022. Willmar businesses planning to sell products containing THC will have to pay a $2,000 licensing fee to the city in order to do so.
Macy Moore / West Central Tribune
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WILLMAR — Selling edible THC products is now legal, but businesses will need to pay for the privilege within city limits.

Businesses within the city of Willmar planning to sell products containing THC will have to pay a $2,000 licensing fee to the city after Willmar City Council on Sept. 19 approved a THC ordinance and an amendment to the 2022 fee schedule to incorporate the new fee.

This ordinance, which was approved unanimously, will replace the emergency ordinance the council approved in July after the Minnesota Legislature made it legal to sell edible or consumable products that contain no more than 0.3% tetrahydrocannabinol, commonly known as THC.

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After being blindsided by the new state law allowing the sale and purchase of edible and consumable THC products, the Willmar City Council on Monday passed an emergency ordinance regulating where and how sales could take place.

Among other requirements, sales are allowed only from a fixed location, the products cannot be stored in a freely accessible area, and giving away samples is prohibited. Licensees also must verify that the person buying THC products is 21 years of age or older.

Before the vote, Councilor Thomas Butterfield noted that it is being reported that the state could lose $46 million in revenue without a cannabis tax and asked if the city could add a local sales tax to THC products.

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“Right now, we don’t know. The League of Minnesota Cities is reviewing that question,” said City Operations Director Kyle Box. “Once we have that answer, we may bring that back at a later date.”

City Administrator Leslie Valiant explained that sales tax is regulated by the state, so the city can only tax what the state says it can tax.

Regarding the licensing fee to sell THC products, the council held a lengthy discussion at its Aug. 15 meeting about the dollar amount, with some thinking it should be as high as $5,000.

It also amended the draft ordinance to include more significant consequences for those in violation of the ordinance, which was included in the final ordinance that was approved.

Businesses will pay a $1,000 fine and receive a three-day license suspension upon the first violation; a $2,000 fine and a 10-day suspension for a second violation; and a $5,000 fine and revocation of the license for the third violation.

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In presenting the new fee, Box said staff recommended setting it at $2,000, which is a conservative amount that should cover staff time in issuing a THC license.

If there are more law enforcement calls or if law enforcement needs to do more follow-up, the fee will be revisited.

“That’s where the majority of these costs are coming from,” Box said. “We’ll track this most certainly through the first of the year to make sure that our fees and our time are being covered by these fees.”

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Councilor Rick Fagerlie made a motion to amend the resolution to instead charge a $2,500 fee, saying he would rather the city overcharge than undercharge.

“I know that staff reviewed this and I think that following staff recommendations at this time is appropriate,” said Councilor Audrey Nelsen, noting she would vote no on the amendment to the resolution.

That motion to amend the resolution failed in a split 3-5 vote, with councilors Michael O’Brien, Butterfield and Fagerlie voting in favor, and councilors Nelsen, Julie Asmus, Andrew Plowman, Justin Ask and Vickie Davis voting no.

The resolution to amend the fee schedule to incorporate a $2,000 licensing fee to sell THC products passed unanimously.

Jennifer Kotila is a reporter for West Central Tribune of Willmar, Minnesota. She focuses on local government, specifically the City of Willmar, and business.

She can be reached via email at: jkotila@wctrib.com or phone at 320-214-4339.
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