As some Minnesota cities fret over regulating newly legalized and normalized marijuana sales, others see an opportunity.
Elk River is among 13 Minnesota cities considering opening municipally owned cannabis stores. They would
be blazing new trails in this regard, as government-run pot shops aren’t currently in use anywhere else in th
e country. City Administrator Cal Portner talks about Elk River’s approach as making the most of a situation.
“I don’t sense that our council is enthusiastic about the law to legalize, but they’re accepting of reality,” he said.
Revenue potential from cannabis sales, and how it can be put to use in the community, is part of the appeal. Assuring compliance is also part of it.
“Our liquor stores never fail compliance tests, whether for tobacco or liquor,” Portner said. “We feel we can do the same thing within the cannabis industry.”
Liquor munis as a model
The only state with any track record of a government-run
cannabis shop is Washington, where a store in North Bonneville opened in 2015 and operated until 2021. Where Min
nesota differed from Washington and other legalized-cannabis states was in the defined path it created for cities to pursue cannabis munis.
Despite being a new concept, Minnesota’s established muni model for liquor, also novel nationally, gives Por
tner confidence in the feasibility. Cities have entrepreneurial experience on their sides, he said, including already selling hemp-based THC products in liquor stores.
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“We’ve had practice time basically to understand the products and understand the customer service side of it,” Portner said.
Municipal liquor sales add nearly $1 million to Elk River’s annual budget.
The city’s two liquor munis keep profits home, Portner said, rather than going to corporations based out of town or state.
“We’re among the top Minnesota liquor store operations within the state and are proud of that,” he said. “It puts a lot of money back in our community.”
Minnesota had 176 cities running liquor munis as of 2023, according to the latest annual report on them by the Office of the State Auditor. Most munis come out ahead, combining for $31.6 million in net profits in 2023. Elk River generated $962,190 of it. Buffalo brought in $710,505. St. Anthony Village was $426,385 in the positive.