Old, unused lumber mill in Minnesota is set to become a cannabis cultivation and production facility

A company called HWY35, LLC, currently based in Missouri, recently received funding from the Minnesota Department of Iron Range Resources and Rehabilitation. The Advisory Board (IRRR) voted 5-3 to approve a loan to be used to build a cannabis cultivation and production facility in Grand Rapids, Minnesota.

The department’s mission is “to invest in resources to promote dynamic growth and economic prosperity in northeastern Minnesota by promoting livable communities, maximizing collaborations and partnerships, and strengthening businesses and workforce training.” It provides low-interest or interest-free loans and grants available to businesses planning to move to Minnesota or currently located in the state and looking to expand.

The department recently approved a $10 million loan for HWY35 to build a cannabis cultivation and production facility in Grand Rapids. “While it is exciting to launch the cultivation and manufacturing of cannabis products as a new industry in the state of Minnesota, there is an opportunity to create positive economic impact in Northeast Minnesota, and particularly in the Grand Rapids and greater Iron Range communities, for generations to come “Very big.” “both exciting and rewarding,” said John Hyduke, Lead Minnesota Investment Partner of HWY35. “We will transform the 138-acre former Ainsworth site into a state-of-the-art, state-of-the-art cannabis cultivation and production 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, community development director for the city of Grand Rapids, HWY35 has also shown great success in operating cannabis facilities in similar states, which is why their proposal was approved.

The property was once home to the Canadian-based Ainsworth Lumber Company, which manufactured Oriented Strand Boards for the construction of single-family homes. The company initially purchased the Grand Rapids location in 2004, which was idle as of 2006, and permanently closed it in 2008. According to the Grand Rapids Herald Review, the real estate market was one of the reasons for the closure.

At its peak, the facility employed 190 people. However, HWY35 expects to create hundreds of new jobs through its cannabis business, according to IRR Commissioner Ida Rukavina. “The HWY35 project is expected to benefit northeastern Minnesota by creating 400 jobs and increasing tax revenue that can be reinvested 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 key goals.” According to MPR News, the jobs will average $24 per hour paid and offer a salary range between $40,000 and $160,00 per year.

The licenses for HWY35 are not yet available, but Mathew Sjoberg, director of business development at IRRR, said they should be operational by the end of 2024.

Rukavina told MPR News that allowing cannabis in the region will help diversify the region’s industries, particularly mining and logging. “We know that not everyone may agree with this type of industry,” Rukavina said. “But it’s now legal in the state of Minnesota. If this type of manufacturing doesn’t happen here, it will happen elsewhere in our state.”

The IRR and HWY35 agreed 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 has always been resistance from some parties to the growth of cannabis in a new market. Minnesota Rep. Ben Davis said he used cannabis in his youth and claimed it was addictive. “I’m all for free-market capitalism,” Davis said. “But that doesn’t mean I have to give my approval for us to take $10 million of public and government money and essentially use it to subsidize this industry.”

Sen. Justin Eichorn also rejected public funding support, saying the public could have had their say on how the money was used. “I’m surprised that it takes almost 33 percent of the total project cost and government money to get this thing off the ground, based on conversations I’ve had with other people in the industry and other states,” Eichorn said.

HWY35’s IRRR loan application said this was a “remarkable market opportunity” and “the industry is poised for explosive growth, providing an unprecedented opportunity for HWY35 to become a dominant force in the emerging market.”

Recreational cannabis is new to Minnesota, as Gov. Tim Walz signed a bill legalizing cannabis in May. “We have known for too long that banning cannabis use has not worked. By legalizing adult-use cannabis, we are expanding our economy, creating jobs and regulating the industry to keep Minnesotans safe,” Walz said. “Legalizing cannabis for adults and expunging or resentencing cannabis convictions will strengthen communities. This is the right move for Minnesota.” The program began Aug. 1, but the pharmacies won’t be ready for a few years.