The Albert Lea City Council may consider expanding the number of retail cannabis registrations in the city during an upcoming meeting in the coming weeks.

First Ward Councilor Rachel Christensen on Monday said she has had people reach out to her who are interested in obtaining registrations in the city, and after the council issued two registrations back in August, she is disappointed that no one is yet operating in the community.

“There’s a large percentage of voters that said let’s proceed with this,” she said.

With all that has gone on in the city with issuing the first two registrations — including the denial of one applicant who has since gone on to sue the city — she said she would like to see city staff put together a draft of a comprehensive ordinance that the council can use to look at expanding the number of registrations.

The council voted Aug. 25 to stop taking registrations for retail cannabis shops after filling its pre-set limit of two, and at that time denied the registration of Benjamin Kapple of New Mexico.

The two registrations the council approved, for Matchbox Farms and Black Husky, were also from out of state, though one of the owners of Matchbox Farms said the family had moved to the area. The Black Husky owner was one of two to operate in Iowa in the medical cannabis industry.

At least a handful of other local residents have also expressed interest in opening their own dispensary in the community.

City Manager Ian Rigg said staff have drafted an ordinance as they have seen what the Minnesota Office of Cannabis Management has been doing to make decisions at the state level before applicants are approved for a license and forwarded to cities for registration.

Rigg said staff have been taking some of the language in city ordinances for off-sale liquor and are applying more of those standards to the cannabis side. They are also looking at items such as background checks. He said he found out recently that the Office of Cannabis Management is going to include a more robust background check on applicants in its approval process.

The biggest concern for the city, Rigg said, is its pending litigation with applicant Jacob Schlichter, owner of The Smoking Tree, who the council voted against approving the registration for at its July 28 meeting. On Aug. 11, the council declined to reconsider the application.

Schlichter, of Albert Lea, has since filed two cases against the city tied to the matter, including one at the district court level and another at the Minnesota Court of Appeals.

He has argued that the Minnesota Office of Cannabis Management approved the cannabis business license for his company and that by law the city of Albert Lea was required to issue his registration as long as certain objective criteria was met. The criteria referenced included holding a valid license, paying a registration fee, completing a preliminary compliance check if the local government chooses to perform one and being current on property taxes and assessments.

He has also referenced the city’s ordinance, which stated registrations would be issued on a first-come, first-served basis, based on the time-stamped Office of Cannabis Management-issued license. Schlichter’s was the first license to be approved for a dispensary in Albert Lea by the Office of Cannabis Management.

When it was faced with whether to approve his registration, the council in its July 28 vote referenced a lack of local control in the state application and approval process, while others cited disapproval with the law that allows recreational cannabis retailers in the first place.

At their next meeting in August, Rigg said they found out that the background checks on applicants were not as extensive as they would have liked and suggested the city conduct a criminal background check on applicants.

They specifically referenced prior criminal charges against Schlichter that were brought to the attention of elected officials a few days before their prior vote, specifically a 2017 conviction, which the city manager said was in conflict with the city’s ordinance that includes the priority to protect the public health, safety and welfare of city residents.

Though he was initially charged with a felony in that case, he pleaded guilty to a lesser gross misdemeanor charge, which has since been reduced to a misdemeanor.

City Attorney Joel Holstad on Monday said the city has motioned to dismiss the district court lawsuit, and he expects appellate court action will be a couple months out,

He said what has been clear in the months that have passed since the council’s action on the cannabis registrations is that there has been a significant change in the pre-licensure application process at the state level, which would now be similar to what the city required for its second and third applicants.

Rigg said he felt confident in the outcomes of the court cases because he strongly believes that what the city did was right and that it was lawful in its actions to vote against approving Schlichter’s registration.

He said the city’s draft ordinance would also allow the city to look more into the applicant’s financial situation as well and its ability to run a store.