18 October 2023
GRAND RAPIDS, Minn. — A former wood plant in northern Minnesota may turn into a $67 million indoor cannabis grow and manufacturing facility after landing more than $20 million in public financing.
The Iron Range Resources and Rehabilitation Board on Tuesday voted to award a $10 million loan to HWY35 LLC, which plans to employ 400 people and equip the former Ainsworth Lumber Co. oriented-strand-board manufacturing facility in Grand Rapids, closed since 2008, with “LED grow lights, HVAC systems and automated nutrient delivery systems.”
The project has also received a $10 million loan from the Minnesota Department of Employment and Economic Development and $2 million in tax-increment financing from the city of Grand Rapids, according to the IRRRB’s Tuesday meeting agenda.
HWY35, led by Jack Mitchell, a Missouri-based cannabis entrepreneur, and John Hyduke, the lead Minnesota investment partner, is among the first businesses trying to capitalize on the state’s burgeoning recreational marijuana industry after it became legal in August.
In a news release, Department of Iron Range Resources and Rehabilitation Commissioner Ida Rukavina celebrated the facility’s potential for jobs and increased tax revenue.
“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,” Rukavina said.
Minnesotans can now possess and grow their own cannabis, but it’ll take at least a year for the industry to start evolving.
The IRRRB, an advisory board made up of state legislators in northeastern Minnesota’s Taconite Assistance Area as well as one senator selected by the Senate majority leader, backed the loan in a 5-3 vote.
Rep. Ben Davis, R-Merrifield, and Sens. Justin Eichorn, R-Grand Rapids, and Robert Farnsworth, R-Hibbing, each cast “no” votes.
Farnsworth said he struggled with giving public money to an industry of a drug that kids are told to avoid. He noted that he was “libertarian” on the issue and wasn’t opposed to someone smoking a joint in their basement as long as they don’t drive.
“This is a free market sort of idea,” Farnsworth said. “We don’t need to use public money to support an industry that — up until now — we have said we haven’t even wanted to encourage.”
Rep. Spencer Igo, R-Wabana Township, voted against legalizing marijuana earlier this year, but ultimately supported the loan Tuesday.
“It’s 400 jobs in a county that’s frankly looking at an energy transition and needs tax base like no other,” Igo said, noting the upcoming retirement of Minnesota Power’s last two coal-fired power plants in Cohasset by 2030 and 2035.
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