Tall Grass Liquor, Marshall’s municipal liquor store, is currently the only retailer in the city selling lower-potency THC drinks and edibles. However, this week the Marshall city council introduced ordinances that could allow other businesses to register to sell lower-potency THC edibles.

MARSHALL — For the past year, sales of edible THC products in Marshall have been limited to the municipal liquor store. But on Tuesday, the Marshall City Council took steps that could open up retail sales of lower-potency edibles to other businesses.

Council members voted to introduce a city ordinance that would allow businesses to register with the city to sell hemp-based THC products. The ordinance would also update Marshall’s zoning code to prohibit sales of THC products in homes, and near schools.

Because it would affect city zoning, the proposed ordinance will go before the Marshall Planning Commission for a hearing on June 12.

Council members and city staff emphasized that the ordinance would only make it possible to sell the lower potency, hemp-based edibles that have been legal in Minnesota since 2022.

“So we’re clear on this, what we’re doing here is creating the ability to license and recognize for the lower concentration of THC,” said council member Craig Schafer. “We’re not approving or licensing anybody for the stronger cannabis.”

In a separate action on Tuesday, the council also introduced a moratorium on “higher-level” cannabis businesses, while the city studies potential local regulations for them. The moratorium would remain in effect until January 1, or until the city repealed it, whichever came first.

A public hearing on the cannabis moratorium was set for the June 25 city council meeting.

At Tuesday’s council meeting, City Attorney Pam Whitmore said creation of the registration and zoning ordinance came after Marshall took steps to allow breweries to manufacture limited amounts of THC drinks, and to allow businesses with on-sale liquor licenses to serve them.

“That spurred the desire of the Legislative & Ordinance committee to have a larger discussion about the lower-level THC products and the sale of those within the city,” she said.

“We used the guidance of Pam and her colleagues, and hashed this over, and we think that we’ve got a pretty good thing that we recommend to the council,” said council member and L&O committee member Steven Meister.

The proposed ordinance in front of the council would allow businesses to register with the city to sell “lower-level THC edible products,” Whitmore said. Businesses registering to sell THC would need to renew their registrations with the city annually, for a fee.

“The purpose of that registration system is to allow the city to know where these products are being sold, because there’s required compliance checks under (state) statutes,” Whitmore said.

The ordinance would also update city zoning rules to prohibit sales of THC products within 500 feet of a school, or as a home business.

“The 500-foot setback, is that the same as for alcohol and tobacco sales?” asked Mayor Bob Byrnes.

“Yes, it is,” said Marshall city clerk Steven Anderson.

Tall Grass Liquor was the only business in Marshall that was originally allowed to sell lower potency hemp-derived THC drinks and edibles. Tall Grass manager Eric Luther said that while sales of THC products had grown since they first became available last summer, they currently account for about 4% of the store’s sales.

“Things have kind of leveled out,” Luther said.

It was still uncertain what kind of effect the new ordinances would have on availability of THC products in Marshall. “We don’t know what the impact will be, and how many other retail businesses will get into it,” Luther said.

Whitmore said one positive thing about the lower-level THC registration ordinance was that it provided a framework for when the city looks at sales of higher-level cannabis products. “It should translate well, so it’s not confusing for the public. There will be a lot of similarities,” she said.

Part of the discussion of regulating cannabis businesses would have to wait until Minnesota’s new Office of Cannabis Management starts to set licensing and other rules, council members said.

Whitmore said part of the reason the city was introducing a moratorium on higher-level cannabis sales was recent action at the state Legislature.

“In the last hours of this most recent session, the Legislature made quite a few changes,” Whitmore said. “It still doesn’t have the licensing structures set up yet, but allowed for the Office of Cannabis Management . . . to be able to grant preliminary licenses. They set forth a structure on how to do that.”

Whitmore said the new moratorium ordinance “still puts a temporary hold on that higher-level cannabis business for the city of Marshall, until we could some more research, and we can see what the Office of Cannabis Management is intending.”