Minnesota’s cannabis industry is booming following the legalization of recreational marijuana in May 2023 and the recent awarding of adult-use dispensary licenses in 2025. For cannabis retail entrepreneurs looking to capitalize on this growing market, securing a compliant property is one of the most critical steps in launching a successful dispensary.
Understanding Minnesota’s Cannabis Property Requirements
Minnesota’s Office of Cannabis Management (OCM) has established strict regulations for adult-use dispensary locations to ensure compliance with state and local laws. To operate a dispensary, your property must meet the following key requirements:
Zoning Restrictions: Dispensaries must be located in areas zoned for commercial or industrial use. Local zoning ordinances may impose additional restrictions, so it’s essential to verify compliance with both state and municipal regulations.
Distance Requirements: Properties must be at least 500 feet away from schools, public parks, and libraries to protect sensitive areas from cannabis retail operations.
Local Government Limits: Some municipalities, like Woodbury, limit the number of cannabis retailers to one per 12,500 residents, which can affect property availability in certain areas.
Security and Infrastructure: Dispensaries must have state-mandated security systems, including surveillance and access controls, which may require specific property layouts or upgrades.
By understanding these requirements, licensees can identify properties that align with Minnesota’s regulations, streamlining the licensing process and avoiding costly delays.
Steps to Find a Compliant Property in Minnesota
Securing a compliant property for a Minnesota dispensary involves careful planning and strategic execution. Here’s a step-by-step guide to help you navigate the process:
1. Conduct Thorough Market Research
Before scouting properties, analyze the Minnesota cannabis market to identify high-potential locations. Consider:
Consumer Demand: Research areas with high foot traffic or underserved markets, such as regions with limited dispensary access. For example, projections estimate Minnesota’s cannabis sales could reach $426 million in the first year of adult-use legalization, growing to $1.2 billion by year five.
Competitor Analysis: Identify existing dispensaries, including those operated by tribal nations, such as NativeCare on the Red Lake reservation or Waabigwan Mashkiki in Moorhead and St. Cloud.
Demographic Trends: Focus on areas with a strong customer base of adults aged 21 and older.
2. Partner with Local Real Estate Experts
Collaborate with cannabis industry consultants and realtors who specialize in commercial properties and understand Minnesota’s cannabis regulations. These professionals can:
Identify properties in compliant zoning districts.
Verify distance requirements from restricted areas like schools or parks.
Negotiate leases or purchases that align with your budget and timeline.
3. Verify Zoning and Local Compliance
Once you’ve identified potential properties, confirm compliance with local zoning laws and OCM regulations. Some Minnesota cities previously imposed temporary moratoriums on cannabis businesses, but these expired on January 1, 2025, allowing dispensaries to operate under state law. Always check with local authorities to ensure there are no additional restrictions or registration requirements, such as those in Woodbury, where a specific cannabis business registration process will open once licenses are issued.
4. Assess Property Suitability for Dispensary Operations
Evaluate each property for its suitability to meet dispensary needs, including:
Size and Layout: Ensure the space can accommodate retail displays, secure storage, and customer flow while meeting accessibility standards.
Security Infrastructure: Confirm the property supports state-mandated security systems, such as cameras, alarms, and restricted access points.
Renovation Costs: Factor in expenses for retrofitting the property to meet compliance standards, such as installing ventilation systems or secure vaults.
5. Secure Preliminary Approval and Finalize the Property
After receiving preliminary approval from the OCM, applicants have 18 months to secure a compliant property and meet additional licensing requirements. Work closely with your team to finalize the lease or purchase, ensuring all documentation aligns with OCM standards. This includes providing a legal property description and proof of compliance with zoning laws.
Navigating the 2025 License Awards
The OCM began accepting applications for adult-use cannabis licenses in February 2025, with the application window closing in March 2025. Licenses were awarded through a lottery system, with successful applicants notified later in the spring. Social equity applicants, including those with prior cannabis convictions, veterans, or individuals from low-income areas, are prioritized for half of the 150 available dispensary licenses.
As industry experts, Growball is here to assist clients in navigating the competitive lottery process and securing compliant properties. Key considerations include:
Social Equity Support: Help social equity applicants prepare documentation and business plans to strengthen their applications.
Timeline Management: Guide clients to act quickly after preliminary approval to secure properties within the 18-month window.
Compliance Expertise: Offer services to ensure properties meet OCM standards, such as security plans and zoning verification.
Overcoming Challenges in Property Acquisition
Finding a compliant property in Minnesota can be challenging due to:
Limited Availability: High-demand areas like Minneapolis or St. Paul may have limited commercial properties that meet zoning and distance requirements.
Competition: With 3,800 businesses registered to sell low-dose THC products, competition for prime locations is fierce.
Cost Considerations: Application fees ($2,500), initial license fees ($2,500), and renewal fees ($5,000), combined with property costs and compliance upgrades, can strain budgets.
To overcome these challenges, Growball can:
Leverage networks to access off-market properties.
Provide cost estimation services to help clients budget for property acquisition and compliance.
Offer compliance audits to ensure properties meet all regulatory requirements before finalizing agreements.
Why Work with Growball?
Navigating Minnesota’s complex cannabis regulations and competitive property market requires expertise. Growball can:
Streamline the property search process by identifying compliant locations.
Ensure all licensing and zoning requirements are met.
Provide strategic guidance to maximize your chances of success in the $1.5 billion Minnesota cannabis market.
Buildout the facility
Operate a profitable business
Securing a compliant property for a Minnesota adult-use dispensary is a critical step in launching a successful cannabis business. By understanding OCM regulations, conducting thorough market research, and partnering with Growball, you can position your dispensary for success in 2025 and beyond.
Contact us at Info@Growball.net for more information.