LINO LAKES — The city’s zoning ordinance regarding cannabis microbusiness and mezzobusinesses will undergo changes following discussion among members of the Lino Lakes Planning and Zoning Board and pending City Council approval.
A mezzobusiness holds a license that allows a single holder to cultivate, manufacture, and sell cannabis products. It can also operate up to three retail locations.
The proposed new ordinance would allow microbusiness or mezzobusiness business with a retail operations endorsement to operate in a business district and be limited to retail operations. On-site consumption would not be allowed. It also states that a cultivation endorsement would be required for a microbusiness or mezzobusiness to operate in a rural district and the business would be limited to that use.
According to the staff report, the same adjustment is recommended for these two types of businesses within the neighborhood business, the limited business and the general business zoning districts. Currently, a cannabis retail business is a permitted use within these districts.
In March 2025, the city amended City Code Section 1007 (its zoning ordinance) to provide for cannabis businesses within the specific zoning districts of the city.
According to City Planner Katie Larsen, the 14 license types were grouped with similar non- cannabis related businesses. She provided an example of what this looks like within Lino Lakes ordinances.
“So right now, cannabis cultivation is equivalent to (an) agricultural use, which we allow in our rural zoning districts. Retail would be in our commercial districts,” Larsen explained.
She added that two of the license categories, microbusiness and mezzobusinesses, allow for cultivation, production and retail sales at different intensities. Both license types have been limited to the city’s industrial district because of the multiple potential uses.
Licensed businesses within these two categories must also receive an “endorsement” from the state Office of Cannabis Management to operate a specific use such as retail on site, Larsen noted.
Recently, 2E Reality LLC submitted a land use application to the city to amend the zoning ordinance to allow cannabis microbusinesses and mezzobusinesses within the rural zoning district (R). The city rejected the certification because 2E Reality LLC is located within a rural zoning district. Larsen said since then, the owner has met with staff to discuss the company’s operation, which is currently a hemp growing operation.
“Our ordinance in our rural zoning district only allows for cultivation,” Larsen explained. “It doesn’t specifically say that you could have a microbusiness because when we adopted the ordinance, we were thinking that they would be, by right, allowed to do cultivation, production and retail sales.”
After review by the city attorney, it was determined that the statutory requirements allow for microbusinesses and mezzobusinesses to be zoned based on each endorsement received. Under the revised city ordinance, the specific endorsement given a microbusiness or mezzobusiness would be the determining factor on zoning conformance.
“I don’t know why they (the state) would allow this, because they (the businesses) can’t have their endorsements within the same area more than likely in any city,” Guthmueller said. “So, it’s kind of confusing to me to why’d we even have these two categories, and why they would make those licenses the most available to people.”
Larsen explained that the purpose of microbusiness and mezzobusiness licenses is to create opportunities for small-scale operators by allowing a company to control multiple stages of its supply chain. She added that under the state’s cannabis licensing requirements, the intensity of endorsed uses for a microbusiness and mezzobusiness is less than or equivalent to what is already allowed under the specific license type.
“I just don’t under these licenses and how we’re going about it and how Lino has to follow this,” Guthmueller said. “I understand the ordinance, but I just don’t understand how these businesses might not come back in the future and say ‘Hey, you know, we do have these permits to do this here.’ And ask for their property to be changed.”
A draft of the ordinance will be presented to the City Council for discussion at its next work session on Monday, Oct. 6.