Albert Lea revisits cannabis dispensary application

Jacob Schlichter has been ready to open his cannabis dispensary for nearly a year.

Instead, he’s watched empty shelves collect dust.

“I get emails every day of people trying to sell me their product,” Schlichter said. “You pretty much had to be ready to operate to even pass your inspection with the OCM. So I’ve been ready to go for a year now.”

Schlichter’s business, The Smoking Tree, became the first non-tribal cannabis dispensary to receive a license from Minnesota’s Office of Cannabis Management last summer. But the city denied his registration.

After a nine-month legal battle, the Minnesota Court of Appeals ruled in May the city’s denial was arbitrary — a decision in his favor.

“Councilmembers expressed both clear understanding and dissatisfaction that their role in the cannabis registration process is limited, yet they disregarded those limitations by denying Schlichter’s application, despite city staff’s evaluation that it complied with all requirements of the city’s ordinance,” wrote Minnesota Court of Appeals Judge Lisa Beane in May.

The city is now reconsidering Schlichter’s dispensary. City manager Ian Rigg said in an emailed statement that Albert Lea is following the court ruling and sent a new application to Schlichter. Albert Lea did not file an appeal to the Minnesota Supreme Court on the court ruling.

The city currently has four registered cannabis dispensaries and Rigg said the majority of the city council supports legal cannabis businesses operating in the city.

“We have to consider his registration per the court ruling,” Rigg said. “I cannot speak as to any guaranteed result as the council will consider the facts and legal advice before making a decision.”

The dispute around Schlichter’s dispensary centered on how the city evaluated his application. During the review process, council members raised concerns about his past criminal history — in 2017 he was convicted of a misdemeanor that has since been expunged. Council members also expressed frustration about cannabis policy and a lack of local control before denying him.

The appeals court found Albert Lea did not follow its own ordinance that dispensary registrations would be handled on a first-come, first-served basis and considered issues beyond the requirements of Schlichter’s application.

Susan Burns, a Minneapolis-based cannabis attorney who’s followed the case, said state law doesn’t allow municipalities to prohibit cannabis business.

“Cities certainly can design their own registries and processes,” she said. “They’re permitted to do that, but they can’t use their discretion as a backdoor to deny applicants for reasons the ordinance doesn’t authorize, which is what happened in the Albert Lea case.”

Cities and counties can only govern time, place and manner of cannabis businesses through zoning ordinances.

Schlichter and his attorney are now reviewing the new application the city sent him. He said Albert Lea should instead reconsider his original one, since it was already determined that it complied with local ordinances.

“The worst case scenario is that filing a new application would essentially erase all of the progress I’ve made because then they could have more discretion with how it’s handled compared to my initial application, which was noted to have met all the criteria,” he said.

Rigg said in his statement the new application is needed to “satisfy requirements of the ordinance and inform the Council in order to consider the registration.”