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CHRONICLING LEGAL CANNABIS IN MINNESOTA

By Matt DeLong

In this week’s Nuggets: Minnesota cities sell alcohol. Should they sell cannabis?; Minnesota Court of Appeals schedules arguments in canceled preapproval lottery case; Racket wants to know what’s really going on with weed in Minnesota; save the dates for a trio of major Minnesota cannabis events; Worthington City Council approves cannabis ordinance; Albertville amends code for registration of pot businesses; remember to submit your comments about OCM’s draft cannabis rules by Feb. 12; and as Island Peži launches a new cannabis flower brand, we get an early look at its “regenerative” cultivation facility.

Minnesota cities sell alcohol. Should they sell cannabis? Many Minnesota cities already sell booze, thanks to a Prohibition-era law allowing municipalities to control the sale of alcohol. Some have been more successful at that than others. For cities like St. Anthony, where the liquor operation consistently turns a profit, officials hope their retail skills will translate to selling pot. But city leaders are quickly learning that cannabis is a completely different industry, with complicated regulations and shifting restrictions, Sarah Ritter reports. Read more. 

Minnesota Court of Appeals schedules arguments in canceled preapproval lottery case: A three-judge panel of the Minnesota Court of Appeals has scheduled oral arguments for March 25 to consider two key procedural questions related to the Office of Cannabis Management’s (OCM) decision to cancel a preapproval lottery for social equity cannabis licenses in November. We discussed the relevant issues at length two weeks ago. Basically, the panel will decide whether the OCM’s cancellation of the preapproval lottery renders moot the lawsuits filed by social equity applicants who were denied entry. It may also make a ruling on who has jurisdiction over disputes about OCM decisions — District Courts or the Court of Appeals. Once the arguments are heard, the panel has 90 days to issue a ruling. Last week, a group of social equity applicants who were granted entry to the preapproval lottery asked the Appeals Court to order the OCM to reinstate the canceled lottery. The court has yet to respond to that motion. Meanwhile, the OCM is pressing forward with the regular lottery process. A window to submit applications for social equity and general cannabis business licenses will open Feb. 18, with two lotteries expected to be held later this spring.

What’s really going on with weed in Minnesota? Racket asked a small group of business owners, advocates and journalists (including yours truly) to share their thoughts about the current state of cannabis legalization in Minnesota and where things are likely to go in 2025. It’s an informative read that is well worth your time. Read more. 

Save the dates! In recent weeks, organizers of several of Minnesota’s most popular cannabis-themed events made announcements about this year’s festivities. Minnesota Monthly’s CannaFest is coming to Machine Shop in Minneapolis’ St. Anthony Main on April 24. Looking out a bit further, Dabbler Depot’s Doobie Dabbler returns to Sever’s Festival Grounds in Shakopee on Sept. 5-6. Just three weeks later, the sixth annual Legacy Cup will be held Sept. 27 in Minneapolis, though no word about whether it will grace Surly Brewing’s Festival Field for a third consecutive year.

Worthington City Council approves cannabis ordinance: “The Worthington City Council approved its first reading of the city’s proposed cannabis ordinance at Monday’s meeting. Regulations and clarifications in the ordinance include business registration processes, enforcement penalties, operating hours, the prohibition of its public usage and more. Registration fees will cost new businesses $1,000 while renewals will cost them $500,” Samuel Martin reports for the Worthington Globe. Read more. 

Albertville amends code for registration of pot businesses: “The Albertville ordinance approved at the Dec. 16 meeting, set the hours a cannabis business is allowed to operate, the amount of businesses that are allowed in the city and more. It allows for a maximum of one cannabis business, but the council agreed to possibly discuss this amount further later on, since it would be easy to amend the ordinance once the state starts issuing cannabis licenses. Four THC businesses in Albertville that sell lower THC content hemp products have expressed interest in obtaining a cannabis license from the state. To address this, an amendment to city code related to the registration of cannabis businesses was proposed at the most recent Jan. 21 meeting,” Jessica Charpentier reports for the Press & News. Read more.

Remember to submit your comments about OCM’s draft cannabis rules by Feb. 12: The public comment period for the regulations that will govern Minnesota’s adult-use cannabis market will be open for two more weeks, closing Feb. 12 at 4:30 p.m. You can find a PDF of the draft rules here. Cannabis law firm Vicente LLP has compiled some highlights. You can also submit a comment or see comments others have already submitted here. (Reminder: Anything you submit will be public.) 

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Feb. 1 (Sat.): Minny Grown THC Tasting - "Free in-store tasting event featuring Minny Grown THC products." 1-3 p.m. Haskell's Plymouth Wine & Spirits, 4130 N. Berkshire Lane, Unit G, Plymouth. More info.

Feb. 6 (Thu.): Minnesota Dual-Training Pipeline Virtual Legal Cannabis Forum: "The legal cannabis industry forum is a great opportunity to learn about Minnesota Dual-Training Pipeline, review and discuss new draft competency model information for any potential new occupation(s) for the program in this industry, learn from others in the industry and network too." Registration required. 9-10 a.m. More info.

Feb. 16 (Sun.): Light 'Em Up The Bong Show - "A unique and interactive comedy improv experience for Twin City comedy and cannabis fans." 7-10 p.m. Hook and Ladder Theater, 3010 Minnehaha Av., Minneapolis. Tickets and more info. 

Feb. 18 (Tue.): Exclusive Cannabis Law Meet-Up - "We’ll dive into the dynamic world of cannabis law in Minneapolis and help you expand your professional network." Open to cannabis business owners, entrepreneurs, compliance managers and more. 4:30-6 p.m. Modist Brewing, 505 N. 3rd St., Minneapolis. More info. 

Kurt in Stillwater sent us this CC 38 (Key Lime Pie x Blueberry Muffin) x CC 29 (Dosido Blueberry Muffin) flower from breeder Canna Country Farms. Grown in coco coir under an LED light, it "gives off a potent dessert bouquet, but we usually just call it Blueberry due to its heavy berry scent and blue hue." Thanks for sharing!

Homegrowers, show off your plants! Share your best photo with us by clicking the button below and we'll publish one each week in Nuggets. By submitting a photo you affirm that you own the rights to it and you are granting permission to the Star Tribune to publish it on its platforms.

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The Prairie Island Indian Community’s Island Peži cannabis business this week unveiled a 13-acre cultivation and production compound on tribal land near Welch. The tribally owned Island Peži dispensary, located near the Treasure Island casino outside Red Wing, is also hosting a launch party today for its new house cannabis brand, Grasslandz. An assortment of prerolls and vape cartridges are available, including strains like Jelly Breath, Rainbow OG, Jack Herer and Unicorn Poop.

The tribe broke ground on the facility last April, said Justin Hesse, partner with MN River Holdings, the company contracted to run the cultivation operation. Utilizing regenerative farming practices (more on that in a minute) with a focus on sustainability, the facility’s first outdoor crop was harvested in the fall. An indoor growing operation is currently underway.

Island Peži invited the Minnesota Star Tribune to tour the new facility last week. With temperatures stubbornly stuck in the single digits, we made the one-hour drive from Minneapolis to the site. Here’s what we saw.

About the facility

Island Peži’s cultivation and production facility sits on a 13-acre parcel of land the Prairie Island Indian Community has owned for 30 years, Hesse said. The cultivation side includes a 12,000-square-foot building that houses about 2,500 square feet of indoor canopy, as well as rooms for drying, processing and packaging cannabis products. 

Parts of the building were still being outfitted when we visited (it’s expected to be completed in mid-February). When it's finished, it will include space for research and development and a tissue culture library to preserve genetics. Island Peži has partnered with Northstar Hemp, which owns Minnesota THC brands You Betcha! and Carpe Diem, to handle the manufacturing and packaging of pre-rolls, edibles, tinctures, topicals and other products.

Cannabis plants grow under lights in a flower room at the Prairie Island Indian Community’s Island Peži cannabis cultivation facility in Welch. (Alex Kormann/The Minnesota Star Tribune)

In addition to the main building, Island Peži cultivated 3.2 acres of outdoor canopy in 2024, including 4,500 plants grown in living soil. The first harvest totaled about 2,500 pounds, Hesse said. Some of the flower will be sold at Island Peži’s dispensary. The rest will go through an ice water extraction process and ultimately be turned into oils, tinctures and edibles. Eight greenhouses are being installed at the site.

Prairie Island tribal members compose about a third of the operation’s 30 employees, Hesse said. Island Peži plans to continue building out the compound with up to 30,000 square feet of additional facilities. 

'Like organic on steroids'

Island Peži practices regenerative farming, Hesse said, which aims to improve rather than deplete the quality of the soil and the environment over time. Plants are grown in a proprietary blend of organic living soil using locally sourced amendments and teeming with beneficial microbes, insects and worms, with the goal of recreating a food web similar to natural ecosystems. Unlike other mediums, living soil is reamended and used repeatedly, not replaced for each new grow. Synthetic chemical fertilizers and pesticides are eschewed in favor of natural nutrition sources and pest management methods.

“We’re a fully regenerative grow, like organic on steroids,” Hesse said. “Nothing goes to waste. All the trimmings go right back into our tea that we make, and our tea feeds the plants.”

MN River Holdings partner Justin Hesse is surrounded by cannabis in a temporary greenhouse at the facility. (Alex Kormann/The Minnesota Star Tribune)

The plants we saw growing indoors were in pots sitting in empty fabric beds that will soon be filled with soil. Each grow room will have three tiers of plants, allowing growers to maximize canopy space. The facility is currently cultivating 79 strains of flower.  Hesse said he hopes to harvest two outdoor crops next year, one in midsummer and one in the fall.

The products

Island Peži said it will offer about 40 strains of sun-grown flower, prerolls and vape cartridges under the Grasslandz brand. Once the manufacturing facility is completed, it plans to expand its in-house offerings to include live and cured rosin concentrates, a broad array of edibles, as well as tinctures and topicals. 

All of its cannabis receive a full panel of third-party testing, Hesse said, which includes tests for potency and terpenes, as well as a range of potential contaminants such as mold, pesticides, heavy metals and foreign matter.

From 'Operation Golden Gofer' to one of Minnesota's largest legal cultivators

The vision for Island Peži’s sustainable farming comes from MN River Holdings’ CEO, Tri Trong Nguyen, a 49-year-old Rochester native who spent years working in Colorado and has consulted around the world, Hesse said. Nguyen made headlines in 2015 when he was indicted as the ringleader of a 32-person smuggling operation that used vehicles and sky-diving planes to ship up to 400 pounds of marijuana per month from Colorado to Minnesota. Then-Colorado Attorney General Cynthia H. Coffman described it as “one of the largest and most sophisticated criminal enterprises uncovered” since the state legalized recreational marijuana the previous year. The investigation was named "Operation Golden Gofer" by law enforcement.

Trong was initially sentenced in 2017 to 11 years for trafficking and money laundering. However, when his sentence was revised by the courts four months later, he was released and placed on probation, according to court documents.

55-gallon pots used for growing cannabis outdoors in the warmer months and under-construction greenhouses are seen through a window in the main building. (Alex Kormann/The Minnesota Star Tribune)

Trong’s story highlights a reality for the nascent legal cannabis industry: Many of the most-experienced and sought-after cultivators gained their experience in the black market and may have complicated legal histories. 

Island Peži’s parent company, Prairie Island CBH Inc., said in a statement that Trong and MN River Holdings were thoroughly vetted prior to licensing. The partnership dovetails with the company’s support of social equity efforts and “non-discrimination against those disproportionately affected by prior marijuana prohibition,” the company said. 

“Having partners with cultivation expertise is integral to our success,” the statement read. “We are learning from our partners’ expertise and recognize that many of the environmental practices they bring to our cannabis operation, including restorative farming, align with the Tribe’s environmental values and relationship to the land.”

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