First ‘craft cannabis’ products hit recreational dispensaries in Minnesota
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Six years ago, Gabriel Hanson began his hemp extraction business with the dream of one day producing Minnesota’s first recreational cannabis products.
That day came last Tuesday, when Hanson sent out 7,000 cannabis vapes to eight Twin Cities dispensaries out of his small manufacturing facility in Isanti. He’s a microbusiness cannabis extractor and owner of Loon Labs.
Hanson says his “d’Ope cannabis” vape is the first independently manufactured cannabis product to hit Minnesota’s adult-use market. So far, a few state-licensed cultivators have been able to deliver cannabis flower to some dispensaries, but Hanson appears to be the first small business owner to bring a vape to the market.
The vape was made from cannabis flower grown by an outdoor cultivator last fall.
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“It’s exciting,” Hanson said. “Everything’s getting more real as we're getting products ready to go out the door here.”
It’s one of the first signs of “craft cannabis” in Minnesota, a vision state legislators had for the adult-use market in 2023 when cannabis was legalized. In the coming months, cannabis entrepreneurs expect small businesses to lead the market in that vision of locally grown and produced cannabis.
Cannabis moving through supply chain, but stuck at testing
Cannabis flower from non-tribal cultivators is beginning to trickle into the market. Last month, Office of Cannabis Management (OCM) director Eric Taubel said the first sale of cannabis flower from a small business “micro” cultivator was made at a dispensary in Roseville.
“We’re actually in an exciting place,” Taubel said. “We’re seeing that small craft cannabis market starting to come into shape. We're also seeing a really good consistent amount of licenses being issued.”
More than 160 businesses have cannabis licenses. So far, the supply landscape has been dominated by tribal cannabis operations and the state’s two medical cannabis companies.
But Taubel says OCM is now seeing regular movement through the supply chain, particularly from micro cultivators. Some microbusinesses that grew cannabis last fall are also manufacturing their own product into vapes and edibles.
“As with anything, there's the first one to land, and then shortly after that first one we start to see additional product move in,” he said.
But the biggest holdup in the supply chain is testing. Micro cultivator Shawn Weber, who runs an indoor growing operation in Redwood Falls, has been sitting on 120 pounds of flower for eight weeks. He’s one of several cultivators waiting on test results at one of the state’s two cannabis testing labs.
And the longer the testing takes, the longer his cannabis sits in storage.
“We've got 52 stores waiting for it, and we're just patiently waiting for the test to let us release it,” he said.
For Hanson, it took nearly six weeks to get his first round of samples through testing. He’s hoping more testing labs will open soon to help ease some of the “growing pains” microbusinesses like his are facing.
“It feels good to be flowing in production, but we're not flowing at 100 percent capacity yet while we're still waiting on these lab results to come back,” he said.
Dispensaries feel some relief as they begin filling empty shelves
Aurora Cannabis in Prior Lake was one of a few Twin Cities dispensaries that is selling Hanson’s vapes. Receiving the order marked an important milestone for co-owner Randy Beuc, who was finally able to make his first sale of recreational cannabis.
“It feels really rewarding, fulfilling, relieving,” he said. “This is kind of the symbolic reach to the bottom and now we can kind of scratch out and dig.”
Beuc got his cannabis retail license in late October and is one of many dispensary owners across the state who have struggled with the limited cannabis supply. As a retailer who’s looking for investment money, he’s optimistic about future business after receiving his first order from Hanson.
Josh Wilken-Simon and his brother Joel at Legacy Cannabis have been some of the frontrunners in Minnesota’s adult-use cannabis industry. In September, Legacy Cannabis’s Duluth dispensary became the first microbusiness in the state to sell recreational cannabis.
The pair run three dispensaries in Duluth, Woodbury and Minneapolis. Even with seven suppliers — which include a few tribal cannabis enterprises, the two medical cannabis companies and, most recently, two micro cultivators — supply ebbs and flows.
“It's still been hard to keep products on the shelf,” Wilken-Simon said.
Legacy Cannabis typically sells out of pre-rolls, vapes and carts. But Wilken-Simon said he’s optimistic about more products coming from small business Minnesotans soon.
In the last few weeks, his dispensaries have already started selling cannabis flower from two state-licensed cultivators, Unbound Cannabis in Grand Rapids and Greenest Pastures in Hinckley.
“I think that Minnesota really is going to stand out across the country and have a really unique market. We did this first on the hemp side of things and we're geared to do this on the adult-use cannabis side,” he said.
Minnesotans love buying local and want to see a mature market that can offer more products at various price points, Wilken-Simon said. And while he predicts that won’t come for another nine months, he said customers are more than willing to back Minnesota’s emerging cannabis market.
