In Minnesota Small Cities Are Racing to Become the Nation’s Next Pot Dealers

OSSEO, Minn. — In a modest 7,480-square-foot brick building in downtown Osseo — once home to the local newspaper — city officials are preparing for a very different kind of daily circulation. If all goes as planned, by mid-2026 the building at 33 2nd Street NE will open as a municipal cannabis dispensary, placing this small Minneapolis suburb at the forefront of a bold, and untested, experiment in American drug policy.

While more than two dozen U.S. states have legalized adult-use cannabis sales, Minnesota is attempting something different: a “public option” model, allowing local governments to operate their own cannabis shops. The move is styled after the state’s long tradition of municipally owned liquor stores — a model familiar to many Minnesota towns.

A New Frontier for Municipal Retail

In November 2025, the City Council of Osseo, Minnesota approved a plan to convert the former offices of the now-defunct local newspaper into a cannabis dispensary. The facility will operate under a public–private partnership: the city holds the required state license and will collect all profits, while a private retail-management company will handle day-to-day operations. According to the City Council’s agreement, Voyageur Cannabis Services — a Minnesota–based retail firm — will manage staffing, training, compliance, inventory, and security.

In comments to local media, Osseo Mayor Duane Poppe described the move as “an attempt to be responsive to residents and try to find ways to help fund government that [does] not fall on the backs of the people living here.” The hope is that revenue from cannabis sales will fund municipal services — such as fire trucks, park maintenance, and road repairs — without raising property taxes.

A Race to Be First: Osseo vs. Anoka

Osseo’s initiative is not happening in isolation. Several Minnesota municipalities are vying to open their own publicly run dispensaries. One notable contender is Anoka, Minnesota, which in May 2025 broke ground on its own city-owned cannabis dispensary, the Anoka Cannabis Company. Situated at 839 East River Road — adjacent to the city’s existing municipal liquor store — the new shop aims for a December 2025 launch. If that timeline holds, Anoka could become the first municipality in modern U.S. history (outside tribal governments) to run a public cannabis store.

For its part, Osseo remains on track for a mid-2026 opening, once renovations are complete and all state licensing and compliance requirements are met.

Public + Private: A Dual-Market Approach

Unlike municipal liquor stores — which often operate under local monopolies — state law governing adult-use cannabis prohibits a complete government lockout of private industry. Under this framework, cities must allow at least one private retailer for every 12,500 residents.

Osseo has already embraced this dual-market approach. In addition to its planned municipally run outlet, the City Council granted a license to a private retailer, Roz Chunks, which is slated to open at 332 Central Avenue. Officials argue that offering both public and private cannabis retailers will foster competition, broaden consumer choice, and drive foot traffic to Osseo’s downtown corridor — potentially boosting overall economic activity in the city.

A Cautionary Tale from the Pacific Northwest

Supporters of the municipal cannabis model often point to control, community oversight, and potential revenue streams. But the only significant precedent for a non-tribal, government-run cannabis store in the United States offers a cautionary tale. Between 2015 and 2021, the small town of North Bonneville, Washington operated a government-owned shop known as “The Cannabis Corner.” Over time, the store struggled — facing challenges with banking, competition from private retailers in neighboring towns, and regulatory complexity. In 2019 it reportedly suffered a substantial financial loss, and local officials eventually deemed the venture unsustainable.

The North Bonneville experience underscores the risks cities face when entering a competitive consumer market — particularly one as heavily regulated and volatile as cannabis retail.

Minnesota officials and municipal leaders believe they may avoid those pitfalls in part because of the state’s long history with municipally run liquor stores — giving cities institutional familiarity with regulated retail, public oversight, and revenue management.

What Osseo’s Gamble Could Mean

For Osseo, the planned dispensary represents more than a new retail outlet: it’s a strategic test of whether legal cannabis sales can be integrated into the traditional public-services funding model. If successful, the dispensary could offer a template for other municipalities seeking to replicate the model: leveraging existing municipal property, partnering with private firms for operations, and balancing public accountability with market demand.

But many questions remain. Will cannabis sales generate enough profit to justify the costs — including renovation, security, compliance, and management fees? Will demand be sufficient in a small suburb? Can local governments avoid the regulatory and financial pressures that sank past municipal examples?

As Minnesota’s municipalities position themselves to become the nation’s next “pot dealers,” all eyes will be on Osseo and Anoka — to see whether their bet on a public-option cannabis model pays off, or ends up as a cautionary footnote in U.S. drug-policy history.

MinneapoliMedia