Olmsted County firms up cannabis lottery plan, gives small shops an earlier start

ROCHESTER – Olmsted County officials will set up a lottery of their own once the state of Minnesota starts licensing cannabis businesses.

The Olmsted County Board on Tuesday approved changes to its cannabis ordinance to allow a registration lottery for up to 14 retailers in the area. The board also allowed an earlier start for small shops.

Additional retailers specializing in medical marijuana could also sell recreational cannabis, but they would still need county licensing.

County officials deliberated more than two months over how best to license potential retailers. At least 120 businesses in the area sell low-dose, hemp-based THC products; those will continue. The county previously capped registrations for marijuana dispensaries at 14, the minimum number of licenses under state law.

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Minnesota mandates that counties allow at least one retail license per 12,500 people. Olmsted County has more than 160,000 residents, including close to 130,000 in Rochester alone.

Olmsted’s plans have drawn attention and criticism for enacting its own lottery after Minnesota’s licensing lottery takes place, as critics decry adding more steps to what they see as an already tedious registration process. Officials have defended the plan as a fair way to allow would-be business owners access to the market instead of a first-come, first-served approach.

Sagar Chowdhury, an associate director with Olmsted County Public Health, said a recent meeting with eight potential licensees found most business owners supportive of the county’s plans, though he expects future tweaks to come before the board.

Under Olmsted’s current rules, two random lotteries will take place at public meetings later this year with at least two weeks’ notice.

The lotteries will be held for three categories of licenses based on how large the businesses are, and will reserve applicants in case those businesses don’t open or give up registrations.

Some business owners hope those lotteries come sooner. Mitch Daniels, who co-owns a prospective microbusiness, told commissioners at a special meeting last week that a lottery for small-business retailers would help level the playing field for owners.

“An early microbusiness lottery set for late June ensures cultivation time for stores to open for retail purchases in the first quarter of 2026,” Daniels said.

Olmsted County is planning to award eight licenses to microbusinesses, which will be allowed to grow, process and sell marijuana products on a relatively small scale from a single storefront. The county is looking at a July lottery just for small businesses.

“That’s a lot of registrations that are ready right now,” Commissioner Michelle Rossman said last week. “Let them start down the process.”

Once businesses are registered with the county, they have up to six months to start operations with an additional 90-day extension if needed.

Commissioners have debated more than just license lotteries in recent weeks as county officials set up enforcement mechanisms similar to local tobacco and alcohol sales.

Municipalities and counties are preparing to take on age-compliance enforcement from state officials. Olmsted County passed enforcement guidelines in March.

Rochester, Minnesota’s third-largest city, opted last fall to allow Olmsted County to take over cannabis regulations. Two smaller cities, Byron and Pine Island, have opted out of Olmsted’s process to oversee enforcement themselves.

Byron also applied for a state license earlier this year to run a municipal cannabis dispensary. City officials said in March they had spoken with someone who was interested in running the retailer but were keeping their options open as questions arise over the application process.

“We’re just preparing ourselves to be in the best position possible for our community to manage what we believe is coming,” Byron City Administrator Al Roder said.