Old, Unused Lumber Facility in Minnesota Set To Become Cannabis Cultivation, Manufacturing Facility
HWY35 was recently approved for a public financing loan of $10 million to fund the cannabis business.
One company called HWY35, LLC, currently based in Missouri, recently received funds from the Minnesota Department of Iron Range Resources and Rehabilitation’s Advisory board (IRRR) voted 5-3 to approve a loan to be used to build a cannabis cultivation and manufacturing site in Grand Rapids, Minnesota.
The department’s goal is “…to invest in resources to foster vibrant growth and economic prosperity in northeastern Minnesota by enhancing livable communities, maximizing collaborations and partnerships and strengthen businesses and worker education.” It provides low or no interest loans and grants to businesses who plan to relocate into Minnesota, or are currently based in the state and are seeking to expand.
The department recently approved a $10 million loan for HWY35 to build a cannabis grow and manufacturing facility in Grand Rapids. “While launching the cultivation and manufacture of cannabis products as a new industry in the state of Minnesota is exciting, the opportunity to create positive economic impacts in northeastern Minnesota and, in particular the Grand Rapids and greater Iron Range communities, for generations to come is both thrilling and rewarding,” said HWY35 Lead Minnesota Investment Partner, John Hyduke. “We will revitalize the 138-acre former Ainsworth site into a high-tech, state-of-the-art, cannabis cultivation and manufacturing facility that our communities will be proud of and that will serve as an industry leader for the state of Minnesota.”
According to Rob Mattei, City of Grand Rapids Director of Community Development, HWY35 has exhibited great success in operating cannabis facilities in similar states as well, which is why their proposal was approved.
The property was once home to Canada-based Ainsworth Lumber Company, which made oriented strand boards used in single-family home construction. The company initially bought the Grand Rapids location in 2004, which it sat idle as of 2006, and closed permanently in 2008. According to the Grand Rapids Herald Review, the house market was part of the reason for the closure.
At its peak, 190 people were employed at the facility. HWY35 on the other hand estimates it will create hundreds of new jobs with its cannabis business, according to IRR Commissioner Ida Rukavina. “The HWY35 project is expected to benefit northeastern Minnesota through the creation of 400 jobs and increased tax revenues that can be reinvested back into the region,” Rukavina said. “Because the project is based in both manufacturing and agriculture, it has the potential to significantly diversify the local economy, which is one of our agency’s primary goals.” According to MPR News, the jobs will pay an average of $24 an hour, and offer a range of salaries between $40,000 to $160,00 per year.
HWY35’s licenses are not in hand yet, but IRRR director of business development, Mathew Sjoberg, said that they should be up and operating by the end of 2024.
Rukavina told MPR News that approving cannabis in the area will help add diversity to the region’s industries, mainly mining and timber. “We know that not everyone may agree with this type of industry,” said Rukavina. “But it is now legal in the state of Minnesota. This type of manufacturing, if it doesn’t happen here, it is going to happen somewhere else in our state.”
The IRR and HWY35 came to the agreement that $5 million of the loan will be forgiven if the company can reach 150 employees within five years, or 175 employees within the next 10 years.
Of course, there is traditionally opposition from some parties regarding the growth of cannabis in a new market. Minnesota Rep. Ben Davis said that he used cannabis in his youth, and claims that it is addictive. “I’m absolutely for free market capitalism,” said Davis. “But that does not mean I need to put my stamp of approval on us taking $10 million of people’s money, of government money, and putting it towards basically subsidizing this industry.”
Sen. Justin Eichorn also opposed the public financing support, and said that the public should have been able to voice their opinion about how the money was being used. “I’m surprised it’s going to take darn near 33 percent of the total project cost and government money to get this thing off the ground, based on conversations I had with other people that are in the industry and other states,” Eichorn said.
HWY35’s IRRR loan application stated that this was a “remarkable market opportunity,” and that “industry is poised for explosive growth, offering an unprecedented chance for HWY35 to become a dominant force in the emerging market.”
Recreational cannabis is new in Minnesota, thanks to Gov. Tim Walz signing a cannabis legalization bill in May. “We’ve known for too long that prohibiting the use of cannabis hasn’t worked. By legalizing adult-use cannabis, we’re expanding our economy, creating jobs, and regulating the industry to keep Minnesotans safe,” Walz said. “Legalizing adult-use cannabis and expunging or resentencing cannabis convictions will strengthen communities. This is the right move for Minnesota.” The program began on Aug. 1, but dispensaries won’t be ready for at least a couple of years.