
At Latitude Real Estate Advisors, our Cannabis Practice Group keeps a close eye on legislative changes that impact the industry. Minnesota’s House Bill 2426 is one such development that could have a significant effect on cannabis cultivation in the state.
If passed, this bill would increase the allowable plant canopy for licensed medical cannabis businesses from 60,000 square feet to 90,000 square feet. Even more promising, businesses would be able to apply for further canopy expansions by proving market demand and compliance. Additionally, the bill paves the way for medical cannabis cultivators to enter the adult-use market, allowing them to use up to half of their prior year’s medical cultivation space for recreational production—with room for further expansion based on sales growth.
Another key aspect of the bill is its repeal of restrictions that currently allow the Office of Cannabis Management to limit manufacturing based on cultivation size. This change would provide much-needed flexibility to cannabis operators, enabling them to scale their production to meet market demands more efficiently.
How Would This Impact the Cannabis Real Estate in Minnesota?
House Bill 2426 has the potential to significantly impact cannabis-related real estate in Minnesota in several ways:
1. Increased Demand for Cultivation Space With the allowable plant canopy expanding from 60,000 to 90,000 square feet—and the possibility of further expansion—existing cultivators may need to acquire or lease additional industrial or agricultural properties to scale their operations.
2. More Industrial & Warehouse Leasing Opportunities The ability to grow adult-use cannabis in spaces previously dedicated to medical cultivation will likely increase demand for commercial warehouses and industrial properties suited for cannabis cultivation and processing. This could drive competition for high-quality, properly zoned facilities.
3. Zoning & Municipal Considerations As businesses seek to expand, zoning laws and municipal approvals will play a critical role. Cities and counties may need to adjust their regulations to accommodate the growing industry, which could open up new locations for cannabis operations.
4. Increased Investment & Development Activity With greater production flexibility, investors and developers may see new opportunities in the cannabis sector, from repurposing existing industrial sites to developing state-of-the-art cultivation facilities.
5. Higher Property Values in Cannabis-Friendly Zones Areas where cannabis businesses are allowed may see an increase in property values due to heightened demand from operators looking for compliant real estate.
6. Dispensary Growth & Retail Expansion Although this bill focuses on cultivation, an increase in supply could lead to a broader adult-use market, potentially driving demand for more retail dispensary locations.
The bipartisan support for HB 2426 signals a strong commitment to growing Minnesota’s cannabis industry, making it an exciting time for operators and investors alike. At Latitude Real Estate Advisors, we understand that with legislative expansion comes new real estate opportunities, whether it’s acquiring additional cultivation space, securing industrial properties for processing, or navigating zoning laws for dispensary locations.
For those looking to capitalize on this evolving landscape, our team is here to help. Whether you’re a cultivator seeking expansion space or an investor exploring opportunities in this growing sector, we provide the expertise and market insight to guide your real estate decisions.
Stay tuned as we monitor HB 2426’s progress and its potential impact on Minnesota’s cannabis market. If you have questions about how this bill might affect your business strategy, reach out—we’d love to discuss how we can support your growth in this dynamic industry.