Anoka Breaks Ground on One of the First Government-Run Cannabis Dispensaries in the Nation Since 2015
In a move that signals a bold new chapter in municipal enterprise, the City of Anoka, Minnesota, has broken ground on what could become one of the first government-owned cannabis dispensaries in the U.S. in nearly a decade. On Thursday, city officials gathered at 839 East River Road for a ceremonial groundbreaking to launch the $2.7 million construction project. The dispensary is poised to be a historic step forward, not only for Anoka but for municipal cannabis retail nationwide.
Thirteen Minnesota Cities and Counties Pursue Public Cannabis Sales Under New State Laws
Anoka is one of 13 municipalities in Minnesota that applied for a license to operate a cannabis retail store through the state’s Office of Cannabis Management (OCM). The new legislation allows cities and counties to open government-run dispensaries, offering a publicly managed alternative to private retail.
Kevin Morelli, Anoka’s liquor and cannabis operations manager, noted that the city is taking a proactive approach by starting construction ahead of license approval. “We might be waiting around for it,” he said, “but at least we’ll be ready to go, and we’ll have that in hand, and we can hit the ground running.”
Minnesota’s Office of Cannabis Management Anticipates Summer Openings as Licensing Advances
The OCM, which received 3,500 cannabis business applications and is preparing for a statewide license lottery on June 5, has 90 days to approve or deny municipal applications once all documentation is complete. According to OCM spokesperson Josh Collins, municipalities are guaranteed a license if they meet all the statutory requirements.
Washington’s Past Provides Lessons: First City-Run Dispensary Closed Due to Competition and Margins
Minnesota is learning from the experience of Washington, the first state to authorize municipal cannabis sales. North Bonneville opened a city-run cannabis shop in 2015, but the business struggled to stay afloat amid growing competition and slim margins, ultimately closing in 2021.
Minnesota’s legislation attempts to strike a balance by requiring municipalities to allow at least one cannabis store per 12,500 residents while giving them the authority to limit the number of dispensaries.
In Anoka—population 18,000—the city council voted to allow only one private cannabis retailer, helping position the municipal store for long-term sustainability. The new dispensary will be strategically located across from Anoka’s existing city-owned liquor store.
City-Owned Dispensaries Aim to Reinvest Cannabis Profits into Local Communities
Mayor Erik Skogquist expressed confidence in the public model, citing Anoka’s long history of municipal liquor sales since 1937. “The logic is very similar,” said Skogquist. “The city is the one in control, making sure that we are operating well, responsibly, and setting a good example.”
City officials estimate the cannabis store will become profitable by its third year of operation, eventually generating an estimated $1.5 million annually. Those profits, much like liquor store revenues, would be reinvested into the community to support services like parks, policing, and infrastructure—relieving pressure on property taxpayers.
Other Municipalities Hope to Replicate the Model to Fund Local Infrastructure Needs
Other Minnesota cities, such as Osseo and St. Joseph, are also pursuing government-run dispensaries. Unlike Anoka, these cities don’t operate liquor stores, but leaders are viewing cannabis retail as a way to generate much-needed funding.
Federal Cannabis Laws Still Pose Risks, but Cultural Shift and Banking Support Bolster Local Efforts
Despite growing local support, municipal cannabis dispensaries still face challenges due to cannabis’s Schedule I classification under federal law. This classification creates hurdles for banking, though the landscape is rapidly shifting.
Low-Dose THC Sales Provide a Preview of Changing Consumer Habits and Growing Demand
Anoka has already seen consumer behavior shift since Minnesota legalized adult-use cannabis in 2023. Its municipal liquor store began selling low-dose THC beverages and products last year and has witnessed increasing demand.
Anoka Eyes January 2026 Opening, But All Hinges on Licensing Timelines
Construction on Anoka’s dispensary is slated for completion by December 2025, with a hopeful public opening in January 2026. However, the timeline depends entirely on when the state finalizes the city’s cannabis license.
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