Cook County government considers opening municipal marijuana dispensary
Local government officials in Cook County are considering rolling their way into the marijuana industry.
During a meeting of the Cook County Board of Commissioners Sept. 26, Commissioner Dave Mills suggested the county should operate a municipal marijuana dispensary. The arrangement would be similar to a municipal liquor store, such as the one operated in downtown Grand Marais.
Marijuana became legal in Minnesota Aug. 1. There are only two dispensaries open statewide at this time, both of them on tribal lands in northern Minnesota. The Red Lake and White Earth nations both operate dispensaries as of Oct. 3.
Mills said if the county were to operate a municipal marijuana dispensary, the earliest it could likely open such an operation would be Jan. 1, 2025.
County Administrator James Joerke said he supports the idea to at least explore if and how the county could operate a marijuana dispensary. According to the League of Minnesota Cities, the new Minnesota law about marijuana authorizes cities to operate a municipal cannabis retail store.
“The reason that we’re interested in this is because it would create a new revenue stream for county government that potentially we could use to offset the county levy,” Joerke said during a recent WTIP interview.
Despite being in its infancy, the cannabis industry has proven to be financially rewarding for both business and the state. According to the state’s first month of receipts, the Minnesota Department of Revenue received nearly $600,000 in sales tax alone through Aug. 21. According to the Department of Revenue, the sales tax is projected to provide $15.4 million in additional funding to the state’s General Fund in Fiscal Year 2024. In 2025, the projection climbs to $50 million, and in 2026, $84 million is projected statewide.
If the county were to open a marijuana dispensary, they would purchase the cannabis products from a non-county entity, most likely a grower not affiliated with any form of local government. Mills described the buyer-seller scenario to that of the liquor store operated by the city of Grand Marais, in that the city does not distill its own liquor, it buys it from someone else and then sells it.
Mills has been engaging with county and state officials across Minnesota to determine the legality of having a city or county operate a cannabis operation. On the federal level, for example, marijuana remains a schedule I substance. Under this classification, which falls under the Controlled Substances Act, marijuana remains illegal as it “has a high potential for abuse.”
With that in mind, Mills said it’s his understanding that municipalities could be accountable under federal law if they sell cannabis.
“There are discrepancies between the state and federal levels,” Mills said.
To curb the federal law, Mills suggested that the Cook County Economic Development Authority (EDA) could be the local organization that actually has claim to the dispensary. However, most, or all, of the proceeds collected in the form of profits and taxes would still trickle back to the county’s budget.
Mills recently discussed with the EDA Board of Directors the concept of having the municipal dispensary fall under their authority, noting that there was not “a whole lot of comfort there.” The EDA, Mills said, want more information about how the county would operate a municipal marijuana dispensary, including a business plan.
Further complicating matters, the county did not budget for a municipal marijuana dispensary in next year’s budget. Earlier in September, the county board voted to approve a 9 percent levy increase for the 2024 budget. This figure cannot be raised, but it can be lowered. Mills said the county would need approximately $250,000 to explore the possibility of, and potentially start a municipal marijuana dispensary. Where that funding would come from remains unknown at this time, according to county officials.
During the Sept. 26 meeting, Commissioner Ginny Storlie questioned what could or would prevent a private enterprise from also opening a dispensary in Cook County. Mills said that counties with a population of 12,500 or less are only required to have one dispensary. Mills said that gives the county the right to deny any private entities a chance at owning and operating a marijuana dispensary. That being the case, there could be a scenario where the county has a dispensary, as does the city of Grand Marais, Mills suggested.
Operating a marijuana dispensary would be largely uncharted territory for any city or county in Minnesota that opts to navigate such a plan. To date, there is only one municipally-run dispensary that has operated nationwide, that in Washington state, where marijuana has been legal since 2012.
Mills told Cook County Attorney Molly Hicken that numerous cities and counties across Minnesota are currently exploring the option of operating a municipal marijuana dispensary. Joerke, meanwhile, insisted that such a consideration remains only in an “exploratory phase” in Cook County.
To listen to the full interview with Joerke and WTIP’s Joe Friedrichs, listen to the audio below. Other topics discussed in the interview include ongoing maintenance issues in county buildings, the county’s Capital Improvement Plan, and the EDA budget for 2024.
Joe Friedrichs October 3, 2023
