Archive · 2026-02-17

If you thought the U.S.-based cannabis industry was all out of unique business models, think again! Minnesota is now home to the only operating government-run cannabis dispensary in the United States. (Washington State had the first ever, which operated from 2015-2021.) The city of Anoka, Minn., holds the honor now, although multiple other Minnesota cities are aiming to manage their own government marijuana dispensaries. “We see this as a natural evolution of our long-standing commitment to responsible municipal retail and reinvesting profits back into the community,” said Anoka Mayor Erik Skogquist to Marijuana Moment in late January. “Every cent of net profit will stay here - it will go towards revitalizing our parks and lifting the collective weight off our neighbors’ shoulders by easing the tax burden and helping keep our city affordable,” he said. “While Minnesota legalization has prioritized social equity ownership, all too often wealthy out-of-state corporations move in and extract maximum profit from communities,” the mayor said. “The Anoka model that the benefits of legalization directly improve the quality of life for the people who live here.” “Our residents want a safe, vibrant, and well-maintained community while keeping taxes as low as practicable,” Skogquist said in a press release. “Anoka Cannabis Company allows the City of Anoka to do just that. We aim to safely control the sale of a regulated substance, set a high bar for others to follow, and use profits to lessen taxpayer burdens while further investing in the community,” the mayor said. “These opportunities rarely come along, and in Anoka, we are capitalizing on it to make sure that all 18,000 residents see the benefits.”

Inside the Anoka Government Dispensary

Anoka Cannabis Company hosted a community open house and a ribbon cutting ceremony in early February before officially opening the Anoka government dispensary Feb. 6, 2026. The business is now open to the public from 10 a.m. to 9 p.m., Monday through Saturday, and from from 11 a.m. to 5 p.m., Sunday. More information can be found at AnokaCannabis.com. Anoka Cannabis Company occupies a 3,000-square-foot building on 839 East River Road, next to the city’s municipal liquor store. As the dispensary is fully owned and operated by the City of Anoka, 100% of profits are to be reinvested directly back into the community. “At Anoka Cannabis Company, education is at the heart of our mission,” said Stephanie Rietz, the dispensary’s manager. “We want to set a new standard for what community-centered, responsible cannabis access can look like.” Flower, vapes, edibles, drinks, accessories and more are offered for sale. Kevin Morelli, city manager of liquor and cannabis operations, said the Anoka cannabis dispensary will carry products from Prairie Island Indian Community and Mille Lacs Band of Ojibwe.

More Minnesota Cities Are Pursuing Government Cannabis Dispensaries

The Office of Cannabis Management (OCM) has received 12 other applications for government cannabis dispensaries via retail licenses, including:
  • City of Mounds View
  • City of Elk River DBA Cannabound
  • City of Osseo DBA Osseo Municipal Cannabis Store
  • City of Byron
  • City of Owatonna DBA Owatonna Cannabis Dispensary
  • Saint Anthony Village Cannabis Dispensary
  • Grand Rapids Municipal Dispensary
  • City of Buffalo
  • City of Blaine
  • City of St. Joseph DBA St. Joseph Municipal Dispensary
  • City of Wyoming
  • City of Lauderdale
A cannabis store in Osseo, housed in a former newspaper building, is attempting to open for business by Summer 2026. In St. Joseph, a cannabis store is ready to open but still waiting for final permitting from the state OCM, according to St. Joseph Mayor Adam Scepaniak. However some communities have already abandoned plans to open a store, intending to keep an eye on the city of Anoka instead for now. Hesitation stems from the potential of changing political views, which comes when elected officials move in and out of positions. If government-run dispensaries are to be successful, a generally pro-cannabis stance is beneficial. As of Feb. 1, 2026, the state of Minnesota has seen 1,405,712 licensed cannabis transactions, with market sales totaling $134.41 million.

Why Washington State's Government Dispensary Closed - and What Anoka Can Learn From It

The city of North Bonneville, Washington opened the Cannabis Corner in March 2015, becoming the first government-owned cannabis store in the United States. The store was operated through a public development authority - a municipal corporation created specifically to run the retail operation - with the original intent of pouring profits back into a community that was, by its own city administrator's description, "so destitute that we have resorted to selling drugs to stay alive." The concept drew national attention and genuine optimism, but the execution fell short of projections. A consultant had estimated roughly $4 million in annual revenue; the store ultimately brought in closer to $1.5 million, with most of that absorbed by rent and loan repayments. By 2019, the Cannabis Corner posted a $53,000 net loss, significant for a city operating on an annual budget of just over $1 million. Increased competition from Oregon retailers and an oversaturated local market compounded the pressure, and by 2021, North Bonneville was no longer operating the store. Minnesota legislators appear to have studied that outcome carefully. Unlike Washington, Minnesota's cannabis law explicitly authorizes cities and counties to "establish, own and operate a municipal cannabis store" - language that removes the regulatory ambiguity North Bonneville navigated and gives Minnesota municipalities a clearer legal foundation. Anoka's proximity to the Minneapolis-St. Paul metro, a larger consumer base, also fundamentally changes the financial calculus.

Not Everyone Is Celebrating: The Case Against Government-Run Dispensaries

The Anoka model has drawn genuine enthusiasm from municipal leaders, but it has also surfaced a debate that is likely to grow louder as more Minnesota cities move toward government cannabis dispensaries. The core concern from private cannabis operators is straightforward: government-owned retail businesses do not pay state income tax, may have access to public land and infrastructure at reduced cost, and can absorb early losses in ways that a private small-business owner simply cannot. Industry advocates and social equity applicants - the very populations Minnesota's legalization framework was designed to prioritize - have raised pointed questions about whether municipal stores create an uneven playing field. A private dispensary owner carrying the full weight of licensing fees, buildout costs, compliance overhead, and market risk competes directly with a city-backed store that returns its losses to a municipal budget rather than a personal one. Mayor Skogquist has addressed the concern directly, framing the Anoka Cannabis Company as a complement to, rather than a competitor with, private licensees. Whether that framing holds as more municipal stores enter the market remains an open question. Minnesota's Office of Cannabis Management has not issued formal guidance on how it will weigh equity considerations when municipal and private applications compete for licenses in the same geographic area.

See the Anoka Model in Action - Then Join the Industry Conversation at CannaCon St. Paul

Curious how the Minnesota government dispensary experiment is playing out in real time? Anoka Cannabis Company is less than 30 minutes from downtown St. Paul - making it an easy stop while you're in the area for CannaCon St. Paul, June 26-27, 2026. Walk the floor of the only operating government-run dispensary in the U.S., then bring what you see into the larger industry conversation happening at the conference. CannaCon is the nation's leading B2B cannabis conference, built specifically for cannabis business owners, operators, and entrepreneurs. Whether the municipal model expands, stalls, or reshapes how private licensees compete, those conversations will be front and center in St. Paul. Don't miss it - register to attend CannaCon St. Paul.