Minnesota City Considers Opening The State’s First Government-Run Marijuana Store

The City Council of Osseo, Minnesota is considering whether to open the state’s first municipally run marijuana retailer—a move leaders say would provide more local control over the look, feel and operations of the store.

“There’s not really a way for a community to say, ‘No, we don’t want this type of a store here,’” Councilmember Mark Schulz said in an interview with local TV station FOX 9. “If we are going to have to have a store and our public safety department is apprehensive, why not give them a seat at the table?”

Schulz called the plan “a viable option for the community to be able to have a hands-on, hard stake in how it operates in their community.”

Under Minnesota’s cannabis legalization law adopted last year, municipalities cannot ban marijuana businesses outright. They can set limits on the number of stores, but there must be at least one retail license available for every 12,500 residents.

Osseo, a suburb of Minneapolis, has a population of about 2,700 people, according to the 2020 Census, meaning officials may not necessarily need to allow a store at all.

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Unlike most other states’ cannabis laws, Minnesota’s also specifically allows municipalities to open and operate their own marijuana retail stores. The League of Minnesota Cities said last year that while the provision “is a unique opportunity for Minnesota cities,” more research was needed “to determine the legal ramifications of such an operation.”

While government-owned marijuana stores are rare in the United States, they aren’t entirely unheard of. In 2015, the Washington State city of North Bonneville opened a municipally owned store in March 2015. The store reportedly struggled financially, however, and moved to nearby Stevenson several years ago. A city representative contacted by Marijuana Moment on Monday said North Bonneville was no longer in the cannabis business.

Some jurisdictions in Canada, such as Quebec, also have state monopolies on retail cannabis.

Osseo created an ad hoc committee last year to study the issue, and last month the city administrator gave an update to the council.

One possible option would be to open the store in “a potential future new City Hall and Public Safety building,” which the report notes is the same building where the Osseo Police Department would be headquartered.

The report notes that “there may be a stigma who may be concerned about purchasing marijuana or other THC products if it’s located next to a Police Department (despite being legal to purchase).”

Other locations could include the former Osseo Press newspaper building now that the paper has moved operations and the city is considering buying the buildling.

A city report published last month said officials are currently waiting on the state’s Office of Cannabis Management (OCM) to hire a new director and proceed with opening license applications.

“The City will want to be ready the moment OCM allows for license applications,” the report says. “While we are hopeful that the OCM will allow for municipal cannabis dispensaries, that is not yet a given.”

Products would likely be available April 2025, it says.

OCM officials gave an update on the state’s implementation of cannabis legalization during a webinar late last month, emphasizing that they’re working as quickly as possible to speed the transition to legal sales.

One agency plan, which would require approval from lawmakers, would begin issuing licenses for the state’s legal marijuana industry ahead of schedule—“as soon as this summer”—with an emphasis on prioritizing social equity applicants.

“We want to include a mechanism for temporary licenses, particularly for social equity applicants,” said Charlene Briner, OCM’s interim director. “And when I say temporary licenses, I mean early licenses—so as soon as this summer, depending on if the legislature decides to take us up on that.”

OCM also wants to lower equity ownership requirements from 100 percent to 65 percent, which Briner said “increases the opportunity for social equity applicants to actually acquire capital and secure funding.”

The agency didn’t discuss city-owned stores at the meeting, however.

Minnesota’s cannabis law has already allowed tribes within the state to open marijuana businesses before the state begins licensing traditional retailers, and some tribal governments—including the Red Lake Band of Chippewa Indians, the White Earth Nation and the Leech Lake Band of Ojibwe—have already entered the legal market.

But after a controversy in which a Red Lake Nation Tribal Council member was accused stealing from the store, NativeCare, the tribal government reportedly has pressed pause on cannabis operations.

Minnesota cannabis regulators also recently launched their sixth rulemaking public input survey, which covers laboratory standards and edible products. The deadline for comments is technically February 11, but OCM officials said they’re happy to accept feedback via email even after individual surveys close.

The OCM presentation came after the agency earlier this year recommended a number of changes to the state’s legalization law in order to help consumers make the transition to a regulated system.

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Adults 21 and older in Minnesota can already legally use, possess and grow marijuana for personal use. In August, the governor clarified that homegrown cannabis cannot be sold commercially.

Following legalization, minor violations of possession or home cultivation limits can result in petty misdemeanors, charges some advocates have said should include state-provided legal representation.

Even before the Gov. Tim Walz (D) signed the reform bill, the state launched a website that serves as a hub for information about the new law. Officials have also already started soliciting vendors to help build a licensing system for recreational marijuana businesses.

Walz has also renewed his search for a top marijuana regulator to lead OCM. In September, the office’s former head, Erin DuPree, a cannabis industry consultant, stepped down after one day of work following a Star Tribune report that her hemp shop allegedly sold illegal products. Lab results reportedly showed elevated THC levels and the presence of banned synthetic ingredients.

Also in September, the Minnesota Supreme Court ruled that the odor of marijuana, on its own, does not establish probable cause for police officers to search a vehicle.

Aside from OCM, another body created by Minnesota’s marijuana law is the Cannabis Expungement Board, which will facilitate record sealing for people with eligible marijuana convictions on their records. The review process for eligible cases began in August. In the meantime, officials recently added a new notice to cannabis criminal history records, essentially letting reviewers know that certain marijuana records that appear on records checks may be pending expungement.

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