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Home My WebLink AboutX-C-01 Special Use Permit – Retail Cannabis – Leonard McQuen (1304 Vermillion St)City Council Memorandum To:Mayor Fasbender and City Council From:Amelia Thibault, Community Development Intern Date:August 4, 2025 Item:Resolution: Special Use Permit (SUP) –Cannabis Retail Sales –Leonard McQuen, Kailua Cultivation -1304 Vermillion St Council Action Requested: Consider adoption of the attached resolution granting a Special Use Permit (SUP) for cannabis retail sales to Leonard McQuen, Kailua Cultivation on property located at 1304 Vermillion St., Hastings MN. Approval of an SUP requires six of seven council members. Advisory Commission Review: The Planning Commission voted 7-0 to recommend approval of the request as presented at the July 28, 2025 meeting. Community Development Intern, Amelia Thibault provided a summary of the staff report. During public hearing Stephen Weik asked if the number of retail cannabis permits will increase. Public hearing closed with no further comments. Commissioners discussed the location of the retail space and the existing low potency cannabis permit held by the business next door, which would need to cease. Special Use Permit (SUP) Determination Certain activities within zoning districts are identified as “Special Uses” requiring issuance of a Special Use Permit (SUP) prior to operation. The Planning Commission must hold a public hearing and provide a recommendation to the City Council on the issuance of a SUP. SUP’s may be approved subject to the establishment of conditions and safeguards as appropriate under the zoning code. SUP’s may be denied when the use is determined not to be in harmony with the purpose and intent of the Zoning Code. Specific written reasons for the denial must be adopted to support the denial. Written reasons for denial must relate to the inability to establish conditions to ensure protection of public health, safety or general welfare. Issuance of SUP Does Not Guarantee Right to Operate The following actions are necessary prior to operating a retail cannabis business: •Special Use Permit from the City –Necessary to demonstrate compatibility with the City’s Zoning Code on the general licensing application through the Minnesota Office of Cannabis Management (OCM). •License from OCM –Includes submittal of application and completion of background check. •Registration with the City –Chapter 117 of the City Code regulates registration through the City Clerk’s office. X-C-01 Attachments: •Resolution –SUP •Planning Commission Staff Report –July 28, 2025 X-C-01 HASTINGS CITY COUNCIL RESOLUTION NO._________ A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF HASTINGS GRANTING A SPECIAL USE PERMIT FOR THE RETAIL SALE OF CANNABIS AT 1304 VERMILLION STREET FOR LENONARD McQUEN, KAILUA CULTIVATION WHEREAS, Leonard McQuen, Kailua Cultivation has applied for a Special Use Permit for the retail sales of cannabis on property owned by Invest Group, located at 1304 Vermillion St, PID 19-77300-05-121. The property is legally described as The South 6 feet of Lot 10, and Lot 11, and the North 30 feet of Lot 12, all in Block 5, TRIPPS ADDITION, Dakota County Minnesota.; and WHEREAS, on July 28, 2025 the Hastings Planning Commission held a public hearing and recommended approval of the action as presented; and WHEREAS, the City Council reviewed the request and concurs with the recommendation of the Planning Commission. NOW THEREFORE BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF HASTINGS AS FOLLOWS: The City Council hereby approves the action as presented subject to the following conditions: 1)Obtaining a license for retail cannabis sales through the Minnesota Office of Cannabis Management (OCM). 2)Low potency cannabis retail sales must cease at H Tobacco located at 1310 Vermillion Street in accordance with minimum cannabis distance requirements of Hastings City Code 3)Registering the license for retail cannabis sales with the Hastings City Clerk’s Office. 4)Adherence to Hastings City Code Chapter 117 –Cannabis Businesses and Chapter 155.07, Subd. J –Cannabis Businesses. X-C-01 5)Retail sales of cannabis are allowed from 10:00am to 9:00pm only. 6)Cannabis use cannot violate City Code Chapter 95 regarding public nuisances. 7)The cannabis use shall have no more than two signs 8)Blinking, moving, and flashing signs that are visible from the exterior of the building are prohibited. 9)No interior sign shall be visible from the exterior of the building. 10)Approval shall not be implied as preference of or granting permission to operate a retail cannabis facility in conjunction with OCM licensing and City registration. 11)Approval of the Security Plan by the Hastings Chief of Police. 12)Approval is subject to a one-year Sunset Clause; if significant progress is not made towards implementation of the proposed use within one year of City Council approval, the approval is null and void. Adopted by the Hastings City Council on August 4, 2025. ATTEST:__________________________ Mary Fasbender, Mayor ________________________________ Kelly Murtaugh, City Clerk (City Seal) X-C-01 I HEREBY CERTIFY that the above is a true and correct copy of resolution presented to and adopted by the City of Hastings, County of Dakota, Minnesota, on the 4th day of August, 2025, as disclosed by the records of the City of Hastings on file and of record in the office. ________________________________ Kelly Murtaugh, City Clerk This instrument drafted by: City of Hastings (JH) 101 4th St. E. Hastings, MN 55033 X-C-01 Planning Commission Memorandum To:Planning Commission From: Amelia Thibault, Community Development Intern Date:July 28, 2025 Item:Public Hearing –Special Use Permit (SUP) –Cannabis Retail Sales –Leonard McQuen, Kailua Cultivation -1304 Vermillion St REQUEST The Planning Commission is asked to take the following actions related to the Special Use Permit (SUP) application of Leonard McQuen, Kailua Cultivation to conduct cannabis retail sales on property owned by Invest Group located at:1304 Vermillion St., Hastings MN. 1)Hold a public hearing. 2)Review the SUP application and provide a recommendation to the City Council. BACKGROUND INFORMATION Cannabis Retail vs. Lower Potency Hemp Edible On December 2, 2024 the City Council adopted an ordinance amendment for cannabis and lower-potency hemp edible uses. The ordinance established parameters for retail sales, manufacturing, and wholesaling of cannabis products. Regulations for lower-potency hemp edible uses (which were established by the Council in November 2023) were further clarified. “Cannabis Businesses” in the 2023 code are now classified as lower-potency hemp edible uses and subject to potency limits. Special Use Permits issued for cannabis retail businesses in 2024 are now classified as “lower-potency hemp edible” businesses. Issuance of SUP Does Not Guarantee Right to Operate The following actions are necessary prior to operating a retail cannabis business: •Special Use Permit from the City –Necessary to demonstrate compatibility with the City’s Zoning Code on the general licensing application through the Minnesota Office of Cannabis Management (OCM). •License from OCM –Hastings City Code 117.07, Subd. D –Cannabis Business Registration Approval, states registration will be approved by the City Council if the applicant “has a State License issued by OCM for the business requested”.Preliminary approval of a state license does not meet the requirements of obtaining a State License required by Hastings City Code.License applications will not be considered for registration until State License requirements are complete. X-C-01 •Registration with the City –Chapter 117 of the City Code regulates registration through the City Clerk’s office. The Ordinance only allows one retail cannabis business within the City.The first application for registration fully meeting the requirements of Hastings City Code Chapter 117.07 –Approval, will be considered for registration by the City. Notification and Public Hearing Notification of the request was mailed to all property owners within 350 feet. The notice included an invitation to the Planning Commission public hearing. Staff have not received any comments at this time. Comprehensive Plan Classification The 2040 Comprehensive Plan designates the property as commercial. The proposed use is consistent with the plan. Zoning Classification The property is C-3 Community Regional Commerce. The C-3 District allows for cannabis retailers as a special use. Adjacent Zoning and Land Use Direction Property Use Zoning Comp Plan North Super Nails/Connell’s/Dot C-3 Commercial East Vermillion St. C-3 Commercial South Liquid Vape C-3 Commercial West Stotko Speedling C-3 Commercial Existing Condition The selected site is currently being used as office space and is occupied in part by Unlimited Chiropractic Hastings. The building is surrounded on three sides by a shared parking area. SPECIAL USE PERMIT REVIEW Background Hastings City Code Chapter 155.30, Subd. C.10 –allows cannabis retailers as a “special use” within the C-3 Zoning District, subject to the requirements of 155.07, Subd. J.5 as follows: 5.Performance Standards. All cannabis businesses must comply with the following: a.Retail sales of cannabis and lower-potency hemp edible products are permitted from 10:00 a.m. to 9:00 p.m., seven days a week. Retail sales of lower-potency beverages associated with an on-sale or off-sale liquor license are permitted during the hours of operation of the associated liquor license. b.No cannabis use shall be allowed as part of any Adult Use Establishment business, as defined in City Code Section 114.21. X-C-01 c.Cannabis uses cannot violate City Code Chapter 95 regarding public nuisances. d.Distance Restrictions. Distances from a cannabis use or lower-potency hemp edible use are measured from the storefront of a retail use and from the property line of all other cannabis uses and shall comply as provided below. (1) There must be at least one thousand feet (1,000’) between each cannabis use. (2)The location of the use must be located: (a)More than five hundred feet (500’) from a school as measured from property line of the school to the use; (b)More than five hundred feet (500’) from a residential treatment facility, as measured from the property line of the facility to the use; (c)More than five hundred feet (500’) from an attraction within a public park that is regularly used by minors, such as, but not limited to a playground, athletic field, athletic court, picnic area or restrooms, pavilion or park building, disc golf features, as each is measured from the location of the public park attraction to the use. However, such distance restrictions shall not extend across Highway 61 or Highway 55 but shall terminate if it intersects with such highways. (d)All buildings used for manufacturing, production, testing, processing, or warehousing of cannabis must be setback a minimum of five hundred feet (500’) from a residential zoning district or residential use as measured from the property line of the cannabis use to the property line of the nearest residential zoning district or residential use. (3)Exceptions to distance restrictions: (a)Lower-potency hemp edible retail uses shall be five hundred feet (500’) from other lower-potency hemp edible retail uses and five hundred feet (500’) from all other cannabis uses but otherwise shall be exempt from the distance requirements in City Code 155.07.J.5.e.(2). (b)On-sale and off-sale liquor establishments selling lower-potency beverages and that have a lower-potency hemp edible City Registration and State License shall be exempt from the distance requirements in City Code 155.07.J.5.e.(1) and 155.07.J.5.(2) and they do not count against other uses for purposes of City Code 155.07.J.5.e.(1). (c)Cannabis retail uses located east of Vermillion Street and north of 4th Street and west of Bailey Street in the DC Downtown Core or C-3 Community Regional Commerce zoning districts shall be exempt from the distance requirements of City Code 155.07.J.5.e.(2)(c). (d)Cannabis cultivation uses shall comply with the distance requirements in City Code 155.07.J.5.e.(1) but shall be exempt from the distance requirements in City Code 155.07.J.5.e.(2). e.Signs must comply with the standards in City Code 155.08 for the relevant zoning district in which the business is located, except for the following: (1)No cannabis use shall have more than two (2) signs; (2)Blinking, moving, and flashing signs that are visible from the exterior of the building are prohibited; (3)No lower-potency hemp edible use shall advertise the lower-potency hemp edible products on more than one (1) exterior sign; (4)No interior sign shall be visible from the exterior of the building. X-C-01 f.Cannabis uses must meet the minimum parking requirements for each type of use as stated in City Code for that use, for example, retail must meet the retail requirements, manufacturing must meet the manufacturing parking requirements. If there is a combination of uses at the same location, the use that requires the largest number of spaces must be met. g.A security plan must be submitted to and approved by the Chief of Police to address security issues in order to protect the public health, safety, and general welfare. The security plan must include, but is not limited to, addressing issues surrounding parking, traffic, securing monetary transactions, building security and alarm systems both internal and external, screening, lighting, window and door placement, landscaping, and hours of operation. Analysis •The site meets the 1,000-foot minimum distance requirement between retail cannabis uses. •The site is within the 500-foot minimum distance requirement from lower-potency hemp edible businesses. H Tobacco located at 1310 Vermillion Street holds a license for retail sale of low potency cannabis and have agreed to cede their license in order to operate a cannabis retail location at 1304 Vermillion. •The site meets the 1,000-foot minimum distance requirement between retail cannabis uses. •The site is more than 500 feet from a school, and residential treatment facility. •The site is more than 500 feet from a playground, athletic field, athletic court, picnic area or restrooms, pavilion or park building, or disc golf. •A preliminary security plan has been approved by the Chief of Police. Special Use Permit Requirements Special Use Permit review is outlined in Chapter 30.02, Subd. E.2.b.5 of the City Code and subject to adherence to the following (staff analysis appears in red). The review is based on the Concept Plan and may be subject to change during a future Site Plan Application. 1.Ingress and egress to property and proposed structures thereon with particular reference to automotive and pedestrian safety and convenient traffic flow and control, and access in case of fire or catastrophe; Ingress and egress to the property will be unchanged and is served by Vermillion St.The sale of cannabis products on site will not require changes to ingress and egress. 2.Off-street parking and loading areas where required, with particular attention to division (E)(2)(b)5.a. above, and the economic, noise, glare, or odor effects of the special use on adjoining properties and properties generally in the district; Proposed parking and loading is adequate. The property is connected to a shared parking lot and surrounded by other commercial uses. 3.Refuse and service areas, with particular reference to items divisions (E)(2)(b)5.a. and (E)(2)(b)5.b. above; The sale of cannabis products will not increase the need for refuse areas. 4.Utilities, with reference to locations, availability, and compatibility; Utility service is adequate and will not change with cannabis sales. 5.Screening and buffering with reference to type, dimensions, and character; Screening and buffering is adequate and will not change with cannabis sales. X-C-01 6.Signs, if any, and proposed exterior lighting with reference to glare, traffic safety, economic effect, and compatibility and harmony with properties in the district; No cannabis use shall have more than two signs, blinking and flashing signs are prohibited, and interior signs may not be visible from the exterior of the building. 7.Required yards and other open space; Yards and open space are included on the Concept Plan. 8.General compatibility with adjacent properties and other properties in the district. Property abuts commercially zoned properties to the North, West, and South with Vermillion Street Recommendation Approval of the Special Use Permit is recommended subject to the following requirements: 1)Obtaining a license for retail cannabis sales through the Minnesota Office of Cannabis Management (OCM) 2)Low potency cannabis retail sales must cease at H Tobacco located at 1310 Vermillion Street in accordance with minimum cannabis distance requirements of Hastings City Code 3)Registering the license for retail cannabis sales with the Hastings City Clerk’s Office. 4)Adherence to Hastings City Code Chapter 117 –Cannabis Businesses and Chapter 155.07, Subd. J –Cannabis Businesses. 5)Retail sales of cannabis are allowed from 10:00am to 9:00pm only. 6)Cannabis use cannot violate City Code Chapter 95 regarding public nuisances. 7)The cannabis use shall have no more than two signs 8)Blinking, moving, and flashing signs that are visible from the exterior of the building are prohibited. 9)No interior sign shall be visible from the exterior of the building. 10)Approval shall not be implied as preference of or granting permission to operate a retail cannabis facility in conjunction with OCM licensing and City registration. 11)Approval of the Security Plan by the Hastings Chief of Police. 12)Approval is subject to a one-year Sunset Clause; if significant progress is not made towards construction of the proposal within one year of City Council approval, the approval is null and void. Attachments •Location Map •Preliminary Security Plan •Application X-C-01 LOCATION MAP SITE PICTURE SPRINGS!, X-C-01 Security Plan for Kailua Cultivation LLC Retail Recreational Cannabis Dispensary Location: 1304 Vermillion St, Hastings, MN 55033 Prepared by: Kailua Cultivation LLC Date: June 30, 2025 1. Purpose This Security Plan outlines the comprehensive security measures implemented by Kailua Cultivation LLC (“Applicant”) to ensure the safety of employees, visitors, cannabis inventory, and the facility at 1304 Vermillion St, Hastings, MN 55033. The plan complies with Minnesota Statutes, including MINN. STAT. 342.27.9, MINN. STAT. 342.27.10, MINN. STAT. 342.27.12, and MINN. STAT. 342.24.6, to maintain a secure environment for the retail recreational cannabis dispensary. 2. Security Monitoring 2.1 Overview Applicant’s security monitoring system is designed to prevent unauthorized access, diversion, theft, and loss of cannabis inventory while ensuring compliance with state regulations. The system includes: 1.Nonstop alarm and video surveillance. 2.Employee monitoring procedures. 3.Strict facility access controls. 4.Comprehensive inventory tracking. All areas of the microbusiness facility ("Facility") will be closely monitored for potential security issues, with immediate law enforcement contact if suspicious activities are identiﬁed. 2.2 Electronic Security Systems •Continuous Oversight: Electronic security systems will provide 24/7 monitoring of restricted and limited access areas to ensure regulatory compliance. •Professionally Monitored System: Applicant will deploy a licensed security company to manage a 24/7 alarm and video surveillance system with remote access capabilities for authorized staff. 2.3 Employee Monitoring X-C-01 •Personnel Tracking Software: Logs essential employment information, including mandatory training records. •Point-of-Sale (POS) System: Employees must log in using unique employee numbers linked to every transaction and inventory movement, creating a complete audit trail. •Electronic Badges and Keycards: Tailored to employee roles, these grant access to speciﬁc restricted or limited access zones via electronic readers that record date, time, and employee number for each entry and exit. 2.4 Consumer Access •Identiﬁcation Veriﬁcation: All consumers must present valid, government-issued identiﬁcation upon entry. •Restricted Areas: Consumers are limited to the waiting area and sales ﬂoor, always accompanied by an employee. •Transaction Monitoring: Purchases are tracked via the POS system to ensure compliance with transaction limits per MINN. STAT. 342.27.12(2). 2.5 Visitor Management •Identiﬁcation and Logging: Visitors (e.g., vendors, contractors) must provide valid government-issued identiﬁcation, sign the Visitor Log, and wear a visitor ID badge. •Visitor Log Details: Captures visitor’s name, date, arrival/departure times, visitor ID number, purpose of visit, and authorized areas. •Escort Requirement: Visitors are escorted by an employee at all times and prohibited from entering restricted or limited access areas without prior approval and a Company escort. 2.6 Video Surveillance •Comprehensive Coverage: Records all activities within the Facility, enabling real-time or subsequent monitoring of all individuals’ actions. •Retention: Recordings are retained for at least 2 years with date and time stamps. 2.7 Inventory Tracking •Statewide Electronic System: Applicant will utilize Minnesota’s electronic tracking system and an integrated seed-to-sale tracking system to monitor inventory movements. •Redundancy: Systems incorporate redundancy for accuracy, tracking lot, batch, and product information through the custody chain, including disposal or destruction. •Daily Reports: Show opening/closing balances, purchases, and sales, reconciled daily and cross-checked with physical counts. •Diversion Response: Suspected inventory diversion is immediately investigated by the General Manager. 2.8 Cannabis Tracking •Unique Identiﬁcation Tags: Each cannabis plant is assigned a scannable tag, remaining with it through cultivation, processing, and sale. X-C-01 •Restricted Area Monitoring: Areas storing cannabis electronically log entries/exits and are under constant video surveillance. 2.9 System Interruptions •Safeguarding Measures: If any security monitoring system is interrupted, Applicant will implement appropriate measures to protect the Facility, employees, visitors, and cannabis inventory. 2.10 Regulatory Compliance All security monitoring protocols comply with MINN. STAT. 342.27.9 and MINN. STAT. 342.24.6. 3. Security Equipment 3.1 Facility Security Features •Doors and Locks: Commercial-grade, nonresidential doors with high-security locks and door contacts. •Motion Sensors: Installed to secure all entry points and detect unauthorized entry. •Emergency Key Box: Discreetly installed outside the main entrance for ﬁrst responder access during emergencies. 3.2 Alarm System •Advanced Components: Includes motion sensors, door contact points, and silent alarms/ panic buttons to alert law enforcement of trespassing. •24/7 Operation: Professionally monitored, operating continuously. 3.3 Video Surveillance System •Camera Placement: Fixed cameras capture all individuals and activities at entrances, exits, operational zones, perimeter, cannabis loading/unloading areas, and restricted/ limited access areas. •Camera Speciﬁcations: ◦Positioned to prevent obstruction, tampering, or disabling. ◦Industry-standard resolution and frame rates for clear still images. ◦Support wireless transmission and hard-wired via CAT6 cables with Power-Over- Ethernet. •Recording Features: Digital archiving device and monitors provide continuous live feed with motion-activated recording. •Remote Access: Authorized personnel can monitor cameras remotely. •Lighting: Exterior and interior lighting maintained per MINN. STAT. 342.27.10 for camera functionality. 3.4 Fire Safety System X-C-01 •Components: Commercial ﬁre alarm system with ﬁre alarms, gas monitoring devices, sprinkler systems, and ﬁre extinguishers. 3.5 Access Control •Restricted Areas: Equipped with automatically locking doors accessible only via role- speciﬁc electronic keycards. •Entry/Exit Logging: Systems log all entries/exits, including individual identities. •Secure Storage: Cannabis and cash inventory stored in a centrally located, locked restricted access area under constant video surveillance with alarm contact points. 3.6 System Maintenance •Routine Inspections: Conducted every 30 days to verify functionality. •Failure Notiﬁcation: Alerts designated security contact within ﬁve minutes of any system failure. •Backup Power: Surveillance systems remain operational for at least 48 hours during power outages; electronically accessed doors have backup systems to prevent unlocking. 3.7 Operational Restrictions •Nonfunctional Systems: Applicant will refrain from selling cannabis if required security or statewide monitoring systems are nonfunctional, per MINN. STAT. 342.27.12(6). 3.8 Regulatory Compliance All security equipment complies with MINN. STAT. 342.27.9 and MINN. STAT. 342.24.6. 4. Implementation and Oversight •General Manager: Oversees security plan implementation, investigations, and compliance. •Training: All employees receive mandatory training on security protocols, access controls, and emergency procedures. •Audits: Regular audits of security systems, inventory, and access logs ensure ongoing compliance. 5. Contact Information •Facility Address: 1304 Vermillion St, Hastings, MN 55033 •Security Contact: To be named after the Special Use Permit is granted. •Licensed Security Company: To be contracted after the Special Use Permit is granted. 6. Conclusion Kailua Cultivation LLC is committed to maintaining a secure and compliant retail recreational cannabis dispensary through robust monitoring, advanced equipment, and strict access controls. This Security Plan ensures the safety of all stakeholders and adherence to Minnesota regulations. X-C-01 City of Hastings Community Development Department Land Use Application Address or PlD of Property:19 77300 05 121 Applicant Name:I 'Property Owner:Invest Group Address:Pre/npirt GSMwVpObJlMa561^1Phone:3QT -4031 Address:3475 Vermillion St Hastings,MN 55033 Phone:651-248-0366 Description of Request: Fax: Email:qregjablonske@edinarealty.comEmail: If requesting site plan review of multi-family units (three or more attached),are the units intended to be for sale or rental units? Check Applicable Line(s)Please Note:All f:ees and Escrows are due at time of application. ||Rezone $500 [|Minor Subdivision $500 ||Final Plat $600 RKI Special Use Permit $500 ||Variance $300 |I Comp Plan Amend.$500 ||Vacation $500 I Lot Split/Lot Line Adj.$75 [|House Move $500 |Annexation $500+8 5,000 escrow ||Prelim Plat $500 +S 5,000 escrow ]O EAW $500 +$5,000 escrow ||Site Plan $500 +S 5,000 escrow ]I Interim Use Permit $500 Total Amount Due:$Make checks payable to City of Hastings. Most credit cards accepted,excluding escrow payments. required documents are attached DateOwnerS(gDateApplicantature Gregory A Jablonske Owner Name -Please PrintApplicantcMameandTitle-Please Print OFFICIAL USE ONLY File #<SuD 5^De Fee Paid:_ Rec'd By:J> Receipt ft Dale Rec'd: App.Complete X-C-01