Anoka opens the first government-run cannabis dispensary in Minnesota, one of the few of its kind in the country

The City of Anoka is entering the Minnesota recreational cannabis market with the opening of its new dispensary, making it one of the first municipal operations in the country and the first in the state.

Anoka Cannabis prepared for a soft opening Thursday in front of cannabis industry insiders. The store is now stocked with cannabis flower, gummies, drinks and pre-rolls. The store is located in a 3,000-square-foot building at 839 East River Road, next to the City Hall liquor store.

From Friday to Sunday, the public can purchase adult products at the store but will have to do so Online booking.

Starting Monday, the store will be open to receive customers.

The dispensary gets its supplies from the Prairie Island Indian Community and the Mille Lacs Band of Ojibwe, said Kevin Morelli, the city’s director of liquor and cannabis operations. Anoka intends to use revenue from the cannabis store to help fund city parks and reduce taxes.

The store is believed to be one of the only government-run dispensaries currently operating in the country. But it is not the first of its kind.

In 2015, the city of North Bonneville, Washington, opened a city-operated retail cannabis store that eventually closed in 2021.

“Although the store performed better in the larger market, sales never exceeded break-even, negating the promise of a financial windfall for the city,” North Bonneville Mayor Brian Sabo told MPR News in March 2024.

While some cities are still months away before cannabis stores open, others have abandoned their plans.

Twelve other cities have applied for a cannabis retail license from the Minnesota Office of Cannabis Management. Anuka was the first to break ground on a cannabis store last May and will run the store herself in the city.

Some cities like Osseo and Mounds View are still putting the finishing touches on the site. They both partner with companies to handle day-to-day operations.

In Osseo, Voyager Cannabis Services will operate a dispensary located in a building formerly occupied by a local newspaper. City Manager Shane Mickelson said the goal is to open by summer.

“We get to some final design areas and then we hire contractors and things like that,” he said. “So we’re not there yet, but I would say within the next month or so, we’ll be working on getting the building up and running.”

Osseo does not operate a municipal liquor store, and sees the cannabis store as a way to lower taxes and make improvements throughout the city. In Mounds View, the city is still in the process of closing a property and will work with its partner to open a dispensary by July.

For the city of St. Joseph, there is still a waiting game to obtain the license. Mayor Adam Skepaniak says their cannabis store is ready to open but the Office of Cannabis Management has not yet issued a retail license.

“We have already decided and figured out everything. We are just waiting for the OCM. Everything is on hold, waiting for them,” he said.

At least two cities have halted their plans to operate a dispensary. City Manager Cal Bortner says Elk River’s initial plans were to rebuild one of the city’s municipal liquor stores and use adjacent space for a cannabis operation.

But City Council members decided in December that they no longer wanted to establish a dispensary, citing public health concerns and uncertainty about the rollout of adult-use cannabis in the state.

“In my view, this board has spoken, and they have no interest in moving forward,” Portner said. “Boards change, and that does not prevent a future board from going in a different direction at another time.”

The City of Buffalo has also paused the cannabis store indefinitely. City Manager Taylor Gronau says city officials have lost interest.

“Once we knew we couldn’t set it up as a municipal liquor store par excellence, and once we realized there was particular interest in opening cannabis dispensaries, it lost its appeal;" He said.