Osseo Council Approves $3M Tax Abatement for Cannabis Dispensary

Will the city of Osseo build a municipal cannabis dispensary?

The answer to that question is unclear.

The city council took an important step toward financing the project on July 13 — but some council members are hesitant to throw their full support behind the concept.

The council approved a $3 million tax abatement, a required step ahead of issuing a general obligation tax abatement bond that would finance the construction of a dispensary. 

That means city staff members and consultants can bring back formal bonding proposals with interest rates and other terms for consideration.

“We’ve got to figure out a way to pay for this if we’re going to move forward with it, and I would like to see what kind of numbers we can get from a bank moving forward with this project, and then make a decision based on those numbers,” Council Member Mark Cook said.

Osseo has been planning to develop a municipal cannabis dispensary for years, but recently ran into significant pushback from some community members.

“I can’t even think maybe of a dumber thing than a weed store,” one resident said during a June 22 public hearing. “And I don’t trust any of you to be able to make sure it works. I don’t think any of you are smart enough.”

Other residents questioned the ability of the shop to meet its financial obligations.

“I know how to read numbers, I know when the math doesn’t add up,” said another resident. “And I can’t make these numbers add up. More concerning, I can’t discern what the city and taxpayers are potentially going to held responsible for if this goes sideways.”

Press and News Building

The city already owns a site that could host the shop: the former Osseo Press and News building, located at 33 2nd St. N.E.

The structure has been gutted anticipating a full-scale remodel.

If the project moves ahead, the city would likely borrow money to cover the costs of the remodeling project, then pay back the loan using revenue from cannabis sales.

Meanwhile, the Press and News building would also house a second tenant, Heavy Rotation Brewing Co., which is planning to relocate from Brooklyn Park to Osseo.

The council recently approved a 10-year lease for Heavy Rotation.

According to some council members, that means the city has a legal obligation to move ahead with redeveloping the building.

“If we don’t come clean on that, that could have some disastrous effects to us potentially via litigation, because I don’t know exactly where they’re at with giving notice on their old space, but all of the sudden they’re homeless and we’re going to end up paying for that,” said Council Member Mark Schulz.

Opposition to Plan

Council Member Nick Torres spoke in opposition to the cannabis dispensary plan, saying the council should consider redeveloping the former Press and News building for another use.

He suggested rewriting the bond proposal to strip away language tying the remodeling project to the dispensary.

“I am not willing to put my name on [a dispensary] at that location,” he said.

His motion to table the discussion until the city’s bond attorney could rewrite the proposal failed.

“I think if we try to package it under a different — wolf in sheep’s clothing — I think we’re going to run into issues on the issuance side,” said Mayor Duane Poppe.

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