A high-profile legal fight in Albert Lea, Minnesota, is drawing attention to the challenges faced by the state’s growing micro-cannabis retailer market. Jacob Schlichter, owner of “The Smoking Tree,” a state-licensed cannabis shop, has filed a civil suit after the city denied his registration for the second time.
In August, the city council approved two cannabis registrations but again denied Schlichter’s, citing his criminal history and public safety concerns. Schlichter argues that the denial violates state legislation, which was designed to support small operators like him and other micro-cannabis retailer licensees.
If the civil suit succeeds, the courts could compel Albert Lea to issue Schlichter the local registration he needs to operate as a micro-cannabis retailer. According to Minnesota Statute §342.13, local governments cannot prohibit licensed cannabis or hemp businesses unless the operation poses an immediate threat to public health or safety. This statute is often cited as a protection for the micro-cannabis retailer model, which was created to help small entrepreneurs enter the market.
Schlichter said, “Hopefully, when this is all over, I’ll be able to walk away with my registration, start my business, create some local jobs, and move on with my life.” His case has become a touchpoint for many other operators hoping to open their own micro-cannabis retailer shops in Minnesota.
To manage legal costs, Albert Lea hired outside counsel through the League of Minnesota Cities. City Attorney Joel Holstad maintains that the council acted legally, saying the city has an obligation to protect public health and safety. Holstad also noted that the Office of Cannabis Management (OCM) confirmed the city has broad discretion in its registration process—even when dealing with a licensed micro-cannabis retailer.
Schlichter’s past, including a 2017 misdemeanor conviction, was central to the council’s decision. While city ordinance Sec. 5.029 allows denial if an applicant has violated laws related to cannabis business operations, Sec. 5.030 also states that cannabis businesses will be registered on a first-come, first-served basis using time-stamped OCM licenses. Schlichter was not only first in line locally but also the first micro-cannabis retailer licensed in the entire state.
With at least 19 similar cases statewide, this lawsuit could shape how Minnesota treats its burgeoning micro-cannabis retailer sector. For now, Schlichter’s fight highlights the tension between state licensing and local control, a dynamic that will influence every future micro-cannabis retailer in Minnesota.