$22 million in public financing aims to turn shuttered Iron Range wood mill into cannabis factory – Twin Cities

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GRAND RAPIDS, Minn. — A former lumber mill in northern Minnesota could be transformed into a $67 million indoor cannabis cultivation and manufacturing facility with more than $20 million in public financing.

The Iron Range Resource and Rehabilitation Commission voted Tuesday to award a $10 million loan to HWY35 LLC. HWY35 LLC plans to employ 400 people and equip the former Ainsworth Lumber Company oriented strandboard manufacturing facility in Grand Rapids, which has been closed since 2008. “LED grow lights, HVAC systems, and automatic nutrient supply systems.”

The project also received a $10 million loan from the Minnesota Department of Employment and Economic Development and a $2 million tax increment loan from the City of Grand Rapids, according to the IRRRB’s Tuesday meeting agenda.

HWY35, led by Missouri-based cannabis entrepreneur Jack Mitchell and lead investment partner John Heiduke of Minnesota, is a fast-growing recreational cannabis company that became legal in the state in August. It is one of the first companies looking to capitalize on the cannabis industry.

In a news release, Iron Range Resources and Rehabilitation Secretary Ida Rukavina praised the facility’s job and tax revenue potential.

“This project has the potential to significantly diversify the local economy, as it is based on both manufacturing and agriculture, which is one of our agency’s main goals,” Rukavina said.

Minnesotans can now own and grow their own cannabis, but it will take at least a year for the industry to start evolving.

The IRRRB, an advisory board made up of state legislators from northeastern Minnesota’s taconite-supporting region and one senator selected by the Senate majority leader, supported the loan by a 5-3 vote.

Rep. Ben Davis (R-Merrifield), Sen. Justin Eichhorn (R-Grand Rapids) and Sen. Robert Farnsworth (R-Hibbing) each voted “no.”

Ms Farnsworth said she struggled to provide public funding to the drug industry that children are told to avoid. He said he’s a “libertarian” on the issue and doesn’t object to someone smoking a joint in their basement, as long as they don’t drive a car.

“This is a free market kind of idea,” Farnsworth said. “We don’t need to use public funds to support an industry that we’ve been reluctant to encourage.”

Rep. Spencer Igo, R-Wabana Township, voted against marijuana legalization earlier this year but ultimately supported the loan on Tuesday.

“We need 400 jobs in a county that is openly considering the energy transition and needs a tax system like no other,” Igo said, adding that Minnesota Power’s last two coal plants in Cohasset He noted that thermal power plants are scheduled to be phased out by 2030 and 2035.

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