The Albert Lea City Council on Tuesday approved how it will approve retail cannabis licenses in the city as additional information comes out of the state of Minnesota Office of Cannabis Management on the process of license approvals.

The council had previously set the limit on retail cannabis establishments in the city to two, and the council on Tuesday voted to fill those two slots on a first-come, first-serve basis.

The council also discussed whether to open up the number of establishments beyond two, but did not take any formal action on doing so. The state is requiring cities allow a minimum of one establishment per every 12,500 people.

City Manager Ian Rigg said the city has been contacted by seven entities looking to open a retail establishment in the community, some of which are local and some of which are from out of the area.

He said to make the selection process less subjective, the best solution they have right now is to rely on the time and date of when the Office of Cannabis Management approves a business for its state license and then turns the business over to the city for registration.

City Clerk Daphney Maras said once a business has been registered at the state and vetted through the Office of Cannabis Management, the office notifies the city.

Rigg said the council, if it chose, could decide to open up the process to more establishments and allow the free market to work for a while and determine how many of the businesses could work in the community.

Sixth Ward Councilor Brian Anderson said if the council is going to change the number of establishments in the community, it should do so sooner rather than later. He said he was afraid of “warping” the market prematurely.

Maras said the state will not put a maximum on how many cannabis businesses the city can have, but she noted the state is concerned about spreading out the businesses geographically.

Rigg said when the council first approved having two retail establishments in the community, there were social concerns about how the businesses would look and their impact on the community. At that time, it was decided to start with two and continue to evaluate it and see if the community would want to add. He said it is always easier to add instead of subtract.

Anderson asked if there was any legal advantage to having more licenses available and have the state limit them.

City Attorney Joel Holstad said he did not see any advantages and said he had some fear of the burden it could have on the city as the city and state learn the impact of having legalized cannabis. He said it is easy to expand the licenses at any time as the process continues.

Albert Lea Mayor Rich Murray said the council also needs to keep in mind all of the citizens who thought two licenses were too many, and he said before the council considers increasing the number he thinks the city should have more clarification from the state.

Anderson said he was concerned with the “first-come, first-serve” approval option, though he respects the city attorney’s opinion that this was the best out of a lot of bad options. The city attorney expressed concern about potential lawsuits coming from entities that are not selected to have their businesses in the community.

Fourth Ward Councilor Reid Olson said he also wished there was a way to look at the entities’ business plans without their names and pick what is the best fit for the community.

Rigg said city staff looked at a number of ways to weigh and consider the applications, and all of the other options they considered could not withstand scrutiny.

Maras reminded the council that applications will be going through an approval process at the state level. Entities have to provide their business, building and security plans, along with their financials.

The amended ordinance also outlines reasons for a license to be revoked. It also removed the specifics about the fees from the ordinance and will have them in the fee schedule. Applications will be required to be submitted 10 days before a council meeting to allow time for review and processing.

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