Andover denies appeal for cannabinoid license

Owner Steban Kabalan, CBD RS staff and their attorney Carol R. M. Moss attended the Jan. 17 meeting to appeal the denial. Kabalan, who was an Andover resident for five years until a recent move to Blaine, began the presentation by reading a short prepared statement to the council:

“I raised three daughters here, and I fell in love with the city and wanted to see it grow,” Kabalan said. “In the summer of 2019, I thought it would be a great place to start a CBD wellness store… Four staff members, my family and my brother’s family depend on that store. We care about the community and our customers, who had many questions when we closed (briefly on Dec. 19). We feel we should be grandfathered in, since we have been in business since 2019 and the Andover Council said our business was OK.”

Kabalan was referring back to his original agreement with his landlord, Joel Libor, who stated he must get permission from the Andover council to open a CBD store in his Hanson Boulevard property. The council responded he must apply for a tobacco license to open, despite Kabalan being unable to sell tobacco under terms of the lease. City administrator Jim Dickinson clarified this was for the background check that accompanies applying for a license.

In a letter to the council, Moss said that Andover should not have denied the cannabinoid license on the grounds that, “CBD RS is entitled to an exemption from these restrictions due to its preexisting nonconforming use.”

Citing Minnesota zoning law, Moss pointed out in the letter, “Any nonconformity, including the lawful use or occupation of land or premises existing at the time of the adoption of additional control under this chapter, may be continued.” This law is commonly referred to as a “grandfather clause,” which she says CBD RS qualifies for as they have been operating since 2019.

After a presentation from Moss restating that position to the council, Andover City Attorney Scott Baumgartner responded to the stance.

“I respect your view on zoning, but I don’t think that this is a zoning issue,” Baumgartner said. “Where I disagree is that it’s not a zoning ordinance but a licensing ordinance. Zoning is to plan for and coordinate the future… You did a wonderful job presenting, but I just happen to disagree. I did my due diligence, gave your letter due respect, but I disagree.”

Baumgartner stated his position was backed up by lawyers from the Minnesota League of Cities. Moss stated that there were still grounds for legal non-conforming use, with certain aspects pertaining to zoning that would allow CBD RS to continue selling without a license, as per the “grandfather clause.”

“We believe, and we have done a lot of analysis also, that there is a right for CBS RS to continue to use the property in a legal non-conforming use,” Moss said. “And even beyond those issues and that disagreement, this is a small business that has been adding to the community and so beyond that, we believe that we have the legal authority and believe that this business is the type of business that the city wants to continue to have flourish in its community.”

Andover Mayor Sheri Bukkila shifted the conversation to ask why the store had closed from Dec. 18 to Jan. 9, as selling non-intoxicating cannabinoids does not fall under the need for a license.

Moss gave the reason as a cover letter sent by Deputy City Clerk Michele Hartner along with the rejection of a license on Dec. 19. A bolded and underlined statement read, “If you are selling cannabinoid products, you will be issued a citation and a code violation could render suspension or revocation of your tobacco license.”

There was no distinction between cannabinoid products containing CBD versus THC in the letter. CBD RS closed as a result, believing they could not legally sell any cannabinoid product, whether THC was present or not.

“That’s devastating to this business because cannabinoids are this business,” Moss said. “It’s a very broad area of the (cannabis) plant.”

Bukkila asked if there were changes the city would need to make to prevent this misunderstanding from happening in the future. Dickinson stated modifying the code to make a clear distinction between non-intoxicating and intoxicating cannabinoid products would be appropriate. Bukkila then asked those at the microphones to explain the difference between intoxicating and non-intoxicating cannabinoid products.

“It’s difficult to describe, because it’s subjective,” Moss said. “What’s intoxicating to me may not be to another person. I’d just like to circle back and emphasize these products have been safely sold by my client without issue. These products are legal state wide and federally.”

Moss once again asked the council to grant CBD RS a license to continue selling THC products. She added that Maple Plain defined THC products requiring a license as “any product that contains more than a trace amount of THC (0.3% or more on a dry weight basis) and up to 5 milligrams.”

Bukkila directed her attention to Baumgartner to ask his opinion on what should be done about changes to city code and the appeal they were considering.

“After a conversation with Dickinson, (Kabalan) has a better idea of what to do without a license. He can continue to sell products that do not require a license, and anything else would require a license.”

Bukkila said she was still struggling with the appeal, saying the ordinance “is more restricted in a literal sense than we intended,” and asked again how to address the appeal. Council member Ted Butler also expressed confusion in how to proceed with the appeal as he was unclear about what was being addressed in the appeal.

“Are we appealing to the ability to continue selling products with a trace of THC or the ability to sell products with more than a trace?” Butler asked.

Moss replied that both were under consideration with changes in ordinance definitions being considered. As it stands, one does not require a license to sell non-intoxicating products containing a trace amounts of THC in Andover. Moss and Kabalan were asking that he be allowed to sell products with more than a trace and up to 5 milligrams, as well. Moss also brought forth statements found in the meeting minutes for a fall 2022 council meeting when talking about revising ordinance definitions.

“If you (end up revisiting) the ordinance, it brings to mind meeting minutes where the council stated it was not meant to be more restrictive than liquor or preclude anyone from having a cannabinoid license in the business areas of the city,” Moss said.

Andover’s liquor license requirements do not include any restrictions related to alcohol and drug treatment facilities or child care facilities.

“I’ve reviewed many ordinances on the topic and I can provide information to support this, that in the case of 1,000 foot restrictions, I have not seen any other city pass such a thing,” Moss added.

When comparing area cities’ THC ordinances, Coon Rapids has a 1,000 foot restriction limited only to schools. The Anoka ordinance relies on zoning compliance rather than proximity from prohibited businesses. Scott Baumgartner also serves as Anoka City Attorney and worked with the Anoka City Council in the drafting of their ordinance.

Council Member Randy Nelson explained that the confusion surrounding the language and restrictions came from a necessity to get something in place as the law blindsided many cities. He assured that it was not CBD RS that was the issue, but the issue of public safety.

“We approve of small business owners like CBD RS,” Nelson said. “But from a City Council standpoint, our No. 1 priority is public safety. We will dig deeper with the city attorney and staff, but we want you to understand the reason for our scramble to an ordinance is public safety. You’re still able to sell some products, we just need to go back and define them.”

Moss replied that public safety was a shared goal, stating that CBD RS has never let an individual under the age of 21 into the store, even prior to the July 1 law when the legal age to purchase non-intoxicating THC products was 18. She also replied that while CBD RS is able to sell CBD products, 90% of their business comes from THC sales.

Butler expressed confusion at the ordinance, asking whether or not a license was required to sell certain THC products. Mayor Bukkila took a moment to ask each council member whether or not they agreed that a license was appropriate for THC products. Each member agreed that one was appropriate.

Similar confusion was found concerning the 1,000 foot rule. Another roll call was taken, each member agreeing to uphold the rule in the case of CBD RS.

The council then voted unanimously in upholding the denial of the license.

“This is an unfortunate situation,” Moss told ABC Newspapers after the vote. “These THC products are a significant part of this business and these products help the community. The council is setting restrictions on these products without understanding what these products are. It doesn’t make sense.”

CBD RS employee Jenn Hubal was one of the employees present at the meeting. Hubal estimated that 70% of CBD RS’s customers are over the age of 45 and seeking sleep supplements and pain relief. Fellow employee Anna Gordon agreed.

“They come to us because they’re hurting,” Gordon said. “It’s a natural remedy that helps with a ton of different situations. There needs to be more education on all of it.”

ABC Newspapers met with employee Nick Winn earlier that Tuesday as he was running the CBS RS store counter. He stated that as things stood, the shop would be running at “minimum capacity.” He also said that he observed two out of every ten sales were CBD products, with the rest being THC products. He said that store owners and staff were committed to following city laws, no matter the outcome of the vote later that day.

“We’ve been very strict with that,” Winn said. “Our owners are being very compliant. We want to be a part of the solution and an ally to the city as they are to us.”

Winn made his statements prior to the council’s vote to deny the appeal. The council and city administrator were invited by Moss to visit the shop prior to their vote, but the offer had not been followed up on.

“We always get feedback saying our store is so clean, so bright, so classy,” Winn said. “‘Not like a regular smoke shop,’ people say. A lot of customers have never stepped into a store like this. We try to provide a positive, safe environment for people to learn about our products. Even if nothing is purchased, we still want them to walk away with some knowledge.”

Ian.Wreisner@apgecm.com