Updated: Oct 27
When Minnesota legalized marijuana last year, lawmakers claimed they were doing it in part to empower those most impacted by the war on drugs. Last week the Iron Range Resources and Rehabilitation Board (IRRRB) recommended giving $20 million in loans to a Missouri-based entrepreneur to grow marijuana on the Iron Range, up to $15 million of which could be forgiven. The final vote to approve the grant was passed 5-3.
Two Minnesota Republicans, Sen. Justin Eichorn and Rep. Ben Davis, who serve on the IRRRB have sent a letter to Gov. Tim Walz asking him to intervene in the matter, saying that the investment is too large, and that state money should not be used to support an out-of-state competitor.
Legalization advocate Leili Fatehi says the investment was the result of a significant education gap on the part of the IRRRB.
“It's been Minnesota public policy that, for decades, removed opportunity and created economic harm for certain segments of the population. Ensuring that when we've legalized, that the wealth created by the industry doesn't go to a bunch of already well capitalized corporate enterprises is just fundamental,” Fatehi said.
Minnesota is poised to hand out millions in aid to an out-of-state cannabis business, with the IRRRB approving another $10 million loan to help the Missouri-based marijuana company acquire a massive facility in Grand Rapids, where a resolution by the Grand Rapids City Council would grant another $2 million in tax increment financing.
Jack Mitchell, the businessman in question, has come under fire in his home state for questionable business practices. The Missouri lawyer is the founder of the Besa Group of Companies and is the President of Missouri Hemp Improvement Company. The Kansas City Star reported that Mitchell had effectively taken over a small municipality in order to push through a plan for a massive entertainment district. Shortly after that story was published, the village area's head of zoning - who is also an employee of Mitchell - resigned, and Mitchell withdrew redevelopment plans. Mitchell has not responded to requests for an interview.
Fatehi says Mitchell’s business plan is based on the hope that Minnesota businesses fail. She says funding Mitchell’s business goes against the stated actions of Minnesota’s goals for legalization. She says that Mitchell’s firm does not have the ability to meaningfully engage with the community it is trying to set up shop in, nor does it have as deep of an interest in the safety and wellbeing of the community as a local business would have.
“We have local industry members that can satisfy [regional economic benefits and economic diversification], not just as well, but better than an out-of-state company can,” Fatehi said. “So I think that's going to be our collective responsibility now, to really proactively engage with the regional development organizations and agencies to help them integrate our local cannabis economy into their planning.”