Albert Lea's 'The Smoking Tree' cannabis shop opens doors but with nothing to sell

ALBERT LEA, Minn. (FOX 9) - After being rejected by the city council last week, the owner of The Smoking Tree cannabis shop in Albert Lea says the store is now open – but he doesn't yet have product to sell.

The Albert Lea City Council voted to not approve the business' registration last week despite it being the first non-tribal shop in Minnesota to receive a cannabis license from the state. 

The business owner says there is also a delay in getting approved, Minnesota-grown product from local tribes. Minnesota law requires retail cannabis sold in the state to be grown in the state. 

READ MORE: This is Minnesota's first license for a recreational cannabis cultivation business

‘The Smoking Tree’ opens in Albert Lea 

Big picture view:

The Smoking Tree cannabis shop is open for business in Albert Lea on Sunday, August 3, but its owner, Jacob Schlichter, says he is currently using the space to educate people about cannabis laws in Minnesota.

A 3-4 vote by the city council last week prevented the business from being registered in the city. However, it's unclear if the Albert Lea decision followed state law, which says cities have little power to restrict cannabis businesses. For the most part, cities can only restrict where a cannabis business can operate.

Schlichter says he's "testing the waters" and hopes to begin selling cannabis later this week. 

For now, the hurdles presented by the Albert Lea City Council and state laws regulating supply continue to prevent any legal cannabis sales at the store. State law says that retail cannabis sold in Minnesota to be grown in Minnesota.

The backstory:

A bill approved in 2023 set the framework for legalizing recreational cannabis in Minnesota. So far, only tribes have been able to open dispensaries as the state worked to set up the licensing process, which has faced delays.

This summer, the state held two lotteries for some business licenses and began issuing licenses for uncapped categories – like small retailers.

READ MORE: Minnesota tribes may soon create cannabis businesses off reservations

Tribal cannabis products could be in high demand from retail shops

Dig deeper:

Tribal cannabis is where retail shops will soon get their supplies from. It's why the owner of The Smoking Tree didn’t have any products yet. With other shops soon to open around the state, it could cause an issue in supply and demand with everyone going to the same sources.

"I think maybe in the beginning we'll be fine, but as more licensees actually get operational, that's where you're going to see a thinning out of the product that's available to all of us. But the tribes haven't really led on that they're maybe facing any form of shortage," said Jacob Schlichter, The Owner of the Smoking Tree.

Albert Lea owner's vision

What they're saying:

Schlichter believes he will have clients who want the product. So we asked him what his vision for the store is up and running.

"It's nothing complicated. We're going to line the walls here with some displays. This yellow line is going to be where we're going to line up more displays. We just sanctioned it off like that, just so it would be easily identifiable, so you know where the public can go and where they cannot," said Schlichter.

What's next:

Schlichter tells Fox 9 that when he does get cannabis products, he plans to sell it, regardless of not having the city registration, because he says he will be following state law. As for his registration, he will have another chance for approval at the City Council meeting next week.

Albert Lea City Council cannabis shop vote

What they're saying:

Before voting to reject the Smoking Tree's registration, city leaders blasted the state law for failing to give local governments more control over cannabis businesses.

"When we had looked at this, we looked at what ways we could maintain local control," explained Albert Lea City Manager Ian Rigg. "We have always looked at whenever the state passes something ways in which we maintain local control. I've been a very big proponent of local control just for the fact that I feel that local government knows its citizenry best and can adapt and make changes as necessary to to meet the needs of its citizens. However, this process did not involve local control or people speaking on behalf or for local control. I think overall the legislature's problem –  this is conjecture – hey were assuming that they were afraid of local control in this matter."

Rigg continued: "Our only option is to defy the state and see lawsuits, which they asked, ‘Well, what could the penalty be?’ Well, there are a number of penalties that they can impose. One of their favorite ones is to withhold local government aid for not meeting certain other requirements."

Rigg said state aid is one-third of the city's general fund revenue. Rigg's also acknowledged the city could face lawsuits.

"I've not been a fan of this since the subject first came up a year ago," added Mayor Rich Murray. "It seems like just two years ago, we were locking people up for this very thing, smoking cannabis. And now we're promoting it. I do not like the way that the state legislature and the governor has rammed this down our throats without very little say in the whole process, all because they're hungry for more revenue. Not only are they hungry for more revenue. But in those last days of the legislature, I believe they increased the amount of revenue they're gonna take out of this by 50%… I don't think two is the right number. As I've said before, I believe zero is the number."

The other side:

Council member Brian Anderson made it clear the city doesn't have a choice in the matter.

"The fact that this is on the agenda tonight is giving a lot of people the illusion that we have a choice in this matter," said Anderson. "Sixmillion [in state aid] is on the line, basically, if we think we're going to defy that. I would love to say no, too, just simply to appease the people with the emails that I've gotten. But I think it's up to me sitting up here to do the responsible thing and actually say that this is going to happen, whether we want it to or not. And I think we have to just embrace it… Maybe it isn't going to be as bad as some people think it is."

The city attorney also pointed out that even if the city were to reject registration, tribes have the authority to approve themselves.

"So, in theory, we could have – even if the council said we're I'm not going to take action on any – we could still have 10 retail operations here as dictated by the state by the state legislature," the attorney explained.

CannabisBusiness