Recreational marijuana is almost ready for its 2025 debut in Minnesota. Before droves of eager buyers cross the border from Wisconsin, officials in towns along the Mississippi are planning out what it means for their communities.
In 2023, Minnesota became the 23rd state to legalize recreational marijuana for people 21 years and older. Licenses and permits will begin rolling out January 2025 if the state stays on schedule.
The newly-established Office of Cannabis Management has drafted guidelines to help municipalities craft their own rules on how businesses can set up shop.
Cities and villages along the river have varied approaches to the department’s guidance so far, with some considering more restrictions than others.
Dillon Beyer, co-owner of Tree Huggers Cannabis, holds a bottle of ‘Rhu-berry’ flavored THC soda. The soda is brewed in collaboration with Spring Grove Soda, a Minnesota soda company.
Caden Perry, River Valley Media Group
Towns are not allowed to ban marijuana businesses entirely, but they can create rules on distance from public areas, hours of operation and application processes. Local governments may limit the number of retailers and businesses allowed as long as there is at least one retail location per 12,500 residents.
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Municipalities can also impose retail registrations and fees, but cannot alter the state’s tax revenue structure.
The Cannabis Tax is 10% of gross receipts from taxable cannabis products sold in retail. From this tax, 20% goes to local governments and the rest to the state.
Since Illinois started collecting cannabis taxes in 2020, it has collected just over $1 billion in revenue. Illinois holds a 10% for low-potency products (lower than 35% THC), 20% for cannabis infused products and a 25% tax on high-potency products (higher than 35% THC.)
“I still want my piece of the pie out of this for the city,” La Crescent city council member Dale Williams said in a council meeting. “I think that there’s going to be some revenue that’s going to be generated off of this for the time being, until Wisconsin decides to do something, or Iowa.”
Border towns take pause
Some border towns have imposed temporary moratoriums on zoning decisions. With a moratorium in place, towns block cannabis businesses from applying for zoning until the state’s general application opens in early January.
One of the main concerns for border towns is traffic. Officials in other parts of the country separating legal sales and use from prohibited states said they saw a influx of traffic when marijuana sales became legal in one of the states.
This incursion poses some risks to border towns. A continued spike in traffic to unprepared areas could inhibit regular commutes, disrupt neighborhoods and increase crashes.
Stephanie Goetzinger stands behind the counter at Tree Huggers Cannabis in Caledonia, Minn. Goetzinger is a Caledonia resident and moved back after spending several years in Colorado. “I think it’s great. It’s fun,” she said about cannabis’ rising popularity in the Midwest.
Caden Perry, River Valley Media Group
Council members in La Crescent even worry that some will cross into Minnesota, consume their legally purchased THC products and attempt to drive back to Wisconsin under the influence.
“Some people are concerned about the long-term and health effects that go farther out, what that means for our community morally,” said La Crescent mayor Mike Poellinger. “On the philosophical side, as a city, we can’t get involved in that, the morality.”
Other council members saw the business as similar to the alcohol industry. Liquor stores in La Crescent already offer low-potency hemp-derived cannabis products made legal under a federal farm bill.
Caledonia city officials skipped the moratorium period and instead finalized cannabis rules in February 2023.
Former Minnesota governor Jesse Ventura speaks in Lanesboro, MN about his new cannabis brand, wrestling career and acting legacy. Ventura recently launched a new brand of hemp-based THC products under the name Jesse Ventura Farms.
Caledonia elected to approve businesses that are 500 feet away from schools and in one fixed location. Cannabis trucks or mobile stands are not allowed. THC products are not allowed to be sold after 10 p.m. or before 8 a.m.
“When I was 18, it was the reverse. See, Wisconsin, the legal age to buy alcohol was 18. So, we had Minnesota people going over the line all the time,” Poellinger said. “I think we’ll definitely see the flip side of that happening here. It’s a commodity and people will travel for it.”
Border jumping
The state of Illinois sold $32.6 million in adult-use cannabis to out-of-state residents in June 2024. This made up 23% of total adult-use sales in the state that month.
Sales from out-of-state residents have plateaued since April 2021, hovering around $35-$45 million each month. However, sales from in-state residents keep rising. In April 2021, in-state sales generated $79.9 million in revenue. In June 2024, the state brought in $109 million.
Businesses in Minnesota and Wisconsin are gearing up for Minnesota’s turn. While the dust settled in Illinois, there’s a chance for Minnesota businesses to cement themselves into local markets and establish a place for regular tourism.
“Of course we’ll see people jumping the border, so to speak,” said Tree Huggers Cannabis co-owner Dillon Beyer. “We have a lot of people tell us about the relief of not getting busted in the parking lot for buying cannabis for their health. It’s a big deal for a lot of people to have normal access to this.”
Stephanie Goetzinger points to a THC chocolate bar manufactured by Jesse Ventura Farms. Former Minnesota Gov. Jesse Ventura launched his own cannabis business in March 2024.
Caden Perry, River Valley Media Group
Without a cemented date for Minnesota cannabis access, business owners are not jumping the gun to prepare for a license they might not get as early as they thought. Beyer is confident having shops set up in both Wisconsin and Minnesota gives the business an opportunity to be flexible and reach two unique markets.
His greatest curiosity is around Minnesota’s potential regulations on cannabis delivery businesses. According to the Office of Cannabis Management, 10 licenses for delivery companies will be considered in the preapproval round.
Businesses work with hazy timeline
Applications for pre-approved licenses closed Aug. 12. The Office of Cannabis Management set aside a process for businesses owned by veterans, people affected by previous cannabis laws, people in high poverty areas and smaller cannabis business owners.
The process was intended to let disadvantaged people break into the industry before larger corporations set up shop. State officials received about 1,800 submissions for pre-approval.
More than half of the applications came from outside of Minnesota. The department will have to narrow down the applicants to 282 before general applications can begin.
Tree Huggers Cannabis recently applied for a pre-approved cannabis license. Beyer said the timeline is a bit hazy right now.
“The process they’re starting now with applications, it should’ve started a year ago,” Beyer said. “We’re thinking the general application process will actually open closer to March 2025.”
The pre-approval lottery will go through a lot of discretion. Applications are dozens of pages long, and the state is working to verify information.
Dillon Beyer looks at a poster chronicling the history of cannabis and its uses.
Caden Perry, River Valley Media Group
With many applications coming from outside the state, officials got their work cut out for them in weeding out businesses that legitimately qualify for pre-approval versus larger entities looking to sneak in under false guises.
Low-potency hemp-derived cannabis is already widely available across Wisconsin and Minnesota. The Winona Planning Commission reported 26 businesses are permitted to sell hemp-derived cannabis products in the city.
Beverage companies such as La Crosse-based Sensi have exploded in the last year, and the product is even sold in 30 Kwik Trips around Wisconsin. The company regularly sells 15,000 cans of its popular orange cream soda in a week.
Winona’s inspections and police departments have reported zero cannabis-related complaints with the businesses since they arrived.
Winona officials are also working to write zoning rules in preparation for cannabis licensing. The planning commission has identified schools, playgrounds, day cares and residential treatment centers as areas where cannabis businesses may not locate.
Rapid changes
New changes to the rules for current hemp licenses and future cannabis licenses are happening frequently in preparation for the full rollout of adult-use cannabis.
Presently, hemp-derived products sold in Minnesota are required to have less THC than products sold in Wisconsin. Hemp business owners say they’re getting a lot of “hurry up and wait” direction from Minnesota’s Office of Cannabis Management.
Hemp businesses in Minnesota are no longer allowed to sell flower products until the licensing process takes off in January. Retailers looking to sell hemp flower will need to apply for different licenses.
“Other businesses aren’t following the rules as they come out,” Beyer said. “It’ll get them cash in the short-term, but they can not expect to get a full license when the time comes. We’re in it for a long haul.”
Tree Huggers Cannabis’ retail store in Caledonia, MN. The shop sells low-potency edible hemp products. With new hemp regulations being advised alongside upcoming adult-use cannabis laws, shops in Minnesota cannot sell cannabis flowers or edible products with more than 10 milligrams of THC.
Caden Perry, River Valley Media Group
Many hemp businesses will need to change the looks of their storefronts if they are granted more expansive cannabis licenses. Windows need to be obscured, package labels need to add more warnings and security must be beefed up for retailers looking to add adult-use cannabis.
The changes are already affecting prospective business owners such as former Minnesota Gov. Jesse Ventura. With his long career in wrestling, Ventura planned to use his likeness to promote his Jesse Ventura Farms line of cannabis products. The state ruled against this and said his wrestling persona and likeness will not be allowed in his marketing.
Ventura broke into the low-potency cannabis business mid-March with hopes of expanding into adult-use cannabis once licenses in Minnesota roll out. The former governor has been a long-time proponent of cannabis legalization and was present when Gov. Tim Walz signed the bill in 2023.
“We’re gonna make all the money that you get on fireworks,” Ventura told the La Crosse Tribune in a June 15 interview. “All the money we waste over there and give you on fireworks, we’re gonna recoup on cannabis.”
Will Wisconsin legalize it?
By the end of the year, Wisconsin will share borders with three states that have fully legalized recreational cannabis. Iowa still criminalizes possession, but has legalized medical marijuana since 2014. Marijuana is still illegal medically and recreationally in Wisconsin.
Cannabis businesses have made headway in Wisconsin since the federal 2018 Farm Bill was passed. The amended bill allowed for the production and sale of hemp-derived cannabis below 0.3% THC.
The hemp plant is largely similar to marijuana, just with much less THC chemicals that are known for intoxicating marijuana users. By growing larger amounts of hemp and distilling the small amounts of THC into consumable products, businesses can create THC derivatives without growing the illegal marijuana plant.
Some cannabis businesses have found success despite the tight constraints. An amendment to the Farm Bill could put an end to what some have called a loophole in the law.
U.S. Rep. Mary Miller, R- Illinois, introduced a Farm Bill amendment that would make all cannabis products, regardless of potency or plant-base, illegal in states that have not established their own hemp and cannabis laws.
Sensi President Dan Schmidtknecht said a change in the Farm Bill would limit what cannabis businesses and retailers can produce.
“I hear mixed reviews, but I think a lot will depend on just how the elections go this fall,” Schmidtknecht said regarding the legalization of marijuana in Wisconsin. “For now, we’re following the regulations as best we can.”
Wisconsin did not set up its own hemp department or regulator after the 2018 Farm Bill passed. Instead, state officials informed cannabis businesses to test their products with the U.S. Department of Agriculture.
“It still feels like we’re still, you know, three, four years away. But I hope it’s less. It seems silly when all the states around you go recreational and you don’t,” Schmidtknecht added.
With a timeline for Minnesota licenses still not nailed down, the potential for a cannabis boom is still on the horizon. What won’t change is the eagerness cannabis businesses along the Mississippi River have got set up and their capitalizing on a model that has produced billions in revenue for similar businesses in other states.
Inside the Stacks Family Farms indoor cannabis farm
Mature Cannabis plants grow in a hermetically sealed room at Stacks Family Farms in La Crosse.
Saskia Hatvany, River Valley Media Group
Saskia Hatvany, River Valley Media Group
Saskia Hatvany, River Valley Media Group
Saskia Hatvany, River Valley Media Group
Saskia Hatvany, River Valley Media Group
Saskia Hatvany, River Valley Media Group
Gio Donisi tends to the hemp plants at Stacks Family Farms in La Crosse on Tuesday, April 16. The farm produces a form of cannabis which contains levels of THC at or under the state’s legal limit of 0.3%.
Saskia Hatvany
Dan Schmidtknecht, co-owner of Stacks Family Farms, stands in a storage room at the company’s facilities in La Crosse on Tuesday, April 16. The company produces an array of products including edible gummies, beverages and smokable flower.
Saskia Hatvany
Gio Donisi sorts clones of a hemp plant at Stacks Family Farms in La Crosse on Tuesday.
Saskia Hatvany, River Valley Media Group
Jamey Wing makes pre-rolled joints with Cannabis produced at Stacks Family Farms in Wisconsin.
Saskia Hatvany, River Valley Media Group
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Publish date : 2024-09-10 00:15:00
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