City-Owned Cannabis Dispensaries? Minnesota Says Yes & May Soon Open First Government-Run Weed Shop

Minnesota is moving towards a movement worth following in the U.S. cannabis industry. For the first time in nearly a decade, Minnesota could soon open cannabis dispensaries run by cities and counties, thanks to a novel provision in its cannabis laws. 

If realized, the initiative would mark a novel experience in the private-sector-dominated cannabis retail space, potentially setting a precedent for municipal involvement in other parts of the country.

A Pioneer Example In Municipal Cannabis Retail

The City of North Bonneville, Washington, is the only example of a city-run cannabis dispensary in the U.S., an endeavor that ended in 2021, Nicole Ki reported at MPR News. Minnesota’s cities, particularly those without liquor stores, view this model as an untapped revenue stream.

The comparison to municipal liquor stores, which have successfully boosted local economies, fuels the argument for city-run cannabis dispensaries. However, the federal classification of cannabis as a Schedule I substance has discouraged other states from undertaking similar models.

Legislative And Community Backing

State Rep. Zack Stephenson (DFL), instrumental in authoring the legislation, underscores the initiative’s novelty. “We weren't copy-pasting from other states… We wanted to enable them [cities and counties] to take the same approach with cannabis that they take with liquor, if they chose to do it and if it was workable.”

Moreover, municipalities like Osseo and Cook County are exploring the idea, attracted by the potential to alleviate property taxes and bolster budgets through cannabis sales. But they face a waiting game as the Minnesota Office of Cannabis Management drafts regulatory frameworks, which are not expected until early 2025.

Challenges And Opportunities For Development

The potential revival of municipal cannabis dispensaries in Minnesota, after North Bonneville’s experience, raises several questions. Concerns range from federal legality and banking issues to public safety and the impact on private businesses. Paul Armentano, the deputy director of NORML says, “The idea has been floated and rejected in various states due to cannabis remaining illegal under federal law, presenting a conflict for state employees.”

Yet, the promise of a new revenue stream to offset rising city service costs is a compelling argument for municipalities considering this route. As Minnesota moves forward, the outcome could serve as a model for other states looking to foster development within their cannabis industry through municipal participation.