In accepting a dispensary business plan and approving consulting work for a municipal cannabis feasibility study, some members of the Wayzata City Council expressed reservations, given that the original goal of being the sole operator in Wayzata may no longer apply because municipal licenses don’t count toward population limits for licenses. The City may still seek to “diversify” revenues.
Acceptance of Municipal Dispensary Business Plan
On August 7, the Wayzata City Council accepted the first phase of the City’s Municipal Dispensary Business Plan, prepared by Point Seven Group.
The plan represents a significant step in the city’s efforts to explore the feasibility of operating a municipal cannabis dispensary, aligning with Wayzata’s strategic goals of diversifying revenue and maintaining community character and safety in the wake of Minnesota’s legalization of adult-use cannabis in 2023.
The Council reviewed findings from the dispensary business plan, which evaluated four scenarios for establishing the dispensary.
These scenarios included options ranging from utilizing a third-party delivery partner to managing delivery internally, with choices for either fully building out the dispensary or renovating a leased site.
All scenarios were projected to be profitable by year five, with the second scenario—using a third-party delivery partner and renovating a leased site—identified as the most feasible due to its lower barriers to entry and reduced upfront costs.
The first phase of the study was authorized at $15,000, funded by the city’s 2024 Capital Improvement Plan.
In a workshop held on June 4, the council had reached a consensus to continue exploring the feasibility of a municipal dispensary, which led to the acceptance of the first phase of the plan on August 7.
The City’s exploration of a municipal dispensary is part of its broader response to Minnesota’s cannabis legalization and aligns with its strategic priorities of revenue diversification and public safety.
The council’s acceptance of the plan indicates a cautious yet proactive approach to evaluating this new economic opportunity.
Prior to the vote council member Alex Plechash voiced his opposition to the City being in the recreational cannabis business, “…I’m philosophically opposed to the City getting into the business, so regardless of how good the business plan may be laid out, I’m not philosocally aligned with that, but I will vote to accept the report.”
Community Development Director Emily Goellner and City Manager Jeffrey Dahl reviewed the plan and recommended its acceptance, highlighting the importance of continued analysis to refine the financial model and stress-test the scenarios.
Feasibility Study
Shortly after accepting the Dispensary Plan, the Wayzata City Council voted 3-1 to approve a professional services agreement with Point Seven Group for the continuation of a feasibility study on a potential municipal cannabis dispensary.
The agreement, which encompasses Phases 2A and 2B of the study, totals $17,000 plus travel expenses and will be funded by the city’s Facilities Capital Improvement Plan.
The study, aimed at assessing the financial and operational viability of a municipal dispensary, is part of the city’s strategic priorities to diversify revenue and sustain community character and safety.
Phase 2A will involve updating the financial model, while Phase 2B will focus on operational preparedness.
The city anticipates making a final decision on whether to apply for a dispensary license in late 2024.
The council’s decision follows initial feasibility studies reviewed in June 2024 and reflects ongoing efforts to refine the financial model based on updates from the state’s Office of Cannabis Management.
Staff have also begun preparing for potential zoning ordinance updates to incorporate cannabis businesses, regardless of whether the city ultimately pursues the dispensary.
Council discussion
During the discussion, Mayor Johanna Mouton supported the approval of the contract, “We hire a lot of consultants as a small town, because we take on a lot of robust projects, we want the best to come to the table and assist us, we don’t have all of the staff for the grandiose ideas that we put forth, and Point 7 is so incredibly impressive, with their knowledge, with their professionalism, skillset, business oriented and minded, very impressive group.”
Council member Alex Plechash again voiced his opposition, “As I stated earlier, I have a philosophical opposition to the City or any government entity being in the business of endorsing or maybe even promoting the use of cannabis. I’ll say it again, I think this was a misguided piece of legislation that was passed, but it is what it is right now…. Just because we can do this doesn’t mean that we should do this, in my opinion.”
Plechash expressed displeasure that the City’s original plan to prevent another cannabis store from operating within city limits—similar to how the municipal liquor store operates—won’t work.
“…maybe the community doesn’t want it. We are going to get one, but do we really want two?”
Jeff parkhill
Council member Jeff Parkhill indicated more input from the community is needed, “I do think that maybe as a community, as a council, that there should be some sort of workshop that involves the police, and maybe the social worker that is with the police to get more information on how this is going to impact our community. It’s not just a financial decision, it’s potentially a moral and ethical decision also. I don’t know if I have a big problem with cannabis, but a lot of people do, I really think having a good chunk of our community supporting this next step would have been ideal, but definitely when we go for the application, that we should be really diligently working on that this fall with getting buy-in from our community because Alex [Plechash] may be completely right, maybe the community doesn’t want it. We are going to get one, but do we really want two [cannabis shops]?”
Further study by City staff showed that even if the City opens its own cannabis store, at least one other license may be granted because the municipal license doesn’t count against the license and population limits prescribed by the State of Minnesota.
City of Wayzata Community Development Director Emily Gellner clarified, “Now what has changed in the last few months is at first we thought we would be part of the lottery system, and we thought we would need to get in there and apply first, or we were confused where we would land, but where we have landed is that we are kind of in our own process completely, we are not part of that cap of one per town, we are not in that, we are on our own. So we could have a municipal store and one private retailer in town.”
After those comments, Council member Molly MacDonald questioned the projections, “I was very relieved to the stress testing portion of this agreement, on staff’s end. It’s crucially important for how their plans have shaken out, I see some serious red flags in there, it’s their business, so I have to trust it but I’m taking it with a rather large grain of salt… I’m very, very concerned about their revenue projections, I’m concerned about the lease agreements, I don’t think that’s right, so when you guys stress test, just test it hard.”
Approval
The feasibility study contract was subsequently approved 3-1 with Plechash voting against.
The work by Point 7 is expected to be completed by December of 2024.
Stay tuned to Wayzata.com on this developing story.
