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The Iron Range Resources and Rehabilitation Advisory Board on Tuesday voted down a proposed agency loan and grant for a start-up Fond du Lac Band of Lake Superior Chippewa cannabis operation.
On a 5-2 vote, the advisory board disapproved of a $2.5 million loan and a $250,000 business development grant to Fond du Lac Cannabis Corp.
However, Iron Range Resources and Rehabilitation Commissioner Ida Rukavina said she plans to overrule the board and move the project forward.
“The Fond du Lac manufacturing project successfully completed the application according to the agency’s guidelines,” Rukavina said in a release.
“Furthermore, the agency’s proficient team exerted considerable effort to thoroughly evaluate the project before presenting it to the board. That said, this project will support new manufacturing jobs in a rural area of St. Louis County that will further diversity and strengthen our region’s economy. For these reasons, I will move this project forward.”
All five Republican members of the board, Sen.’s Rob Farnsworth of Hibbing and Justin Eichorn of Grand Rapids, along with Rep.’s Roger Skraba of Ely, Spencer Igo of Wabana Township, and Ben Davis of Merrifield, voted against the loan and grant.
Two Democrats, Sen. Grant Hauschild of Hermantown and Sen. Bobby Jo Champion of Minneapolis, voted in favor of the project.
Rep. Dave Lislegard, DFL-Aurora, was absent from the meeting.
Questions about the Fond du Lac Band of Lake Superior Chippewa’s support of mining, whether other area tribal governments would in the future also come to the state of Minnesota economic development agency for cannabis funding, the state’s delays in getting cannabis up and running, and whether the Fond du Lac Band had talked with neighboring townships about the project, added up to a no vote.
Robert Abramowski, Fond Du Lac Band of Lake Superior Chippewa secretary/ treasurer said the project would create employment in an area lacking jobs and that it could lead to a partnership with Iron Range Resources and Rehabilitation.
“I see this as an opportunity to open some doors and partnerships,” Abramowski said. “This is something the state made legal, not Fond du Lac. If we don’t do it, someone else will.”
But a majority of the board was uncomfortable with the project. “I can’t use the people’s money for getting people high,” Davis said. “I don’t support the people’s money going for funding the recreational use of marijuana.”
Farnsworth asked Abramowski and Fond du Lac Vice Chairperson Roger Smith if the Fond du Lac Band supports mining.
Iron Range Resources and Rehabilitation programs and operations are funded by Taconite Production Taxes paid by Iron Range mining companies.
Smith said the tribe isn’t opposed to responsible mining.
“We understand the need for mining and we understand the need for the jobs it creates in northern Minnesota,” Smith said. “We are worried about the downstream water quality standards. That is our concern.”
Farnsworth, who along with two other board members in October opposed a $10 million loan for cannabis project in Grand Rapids, said he wants to be consistent.
“I did not vote for it before,” Farnsworth said. “I don’t want to be spending mining money on recreational marijuana.”
Igo said he’s concerned with the state’s direction on cannabis.
“I am worried about how frankly the state has been broken after the last (legislative) session,” Igo said. “With delays in cannabis now within the state, I am concerned it could go bad.”
Hauschild said he hoped the project would be a step in setting politics aside to create jobs.
“While I may have concern with Fond du Lac on certain projects, I hope this is a first step and put politics aside,” Hauschild said. “We need all the jobs we can get.”
“But politics were not set aside in the last session and that left a lot of heads hanging around here,” Davis said, referring to Hauschild/ Lislegard legislation that requires the agency to bond for $80 million in community, infrastructure and non-profit projects.
Cannabis cultivation and manufacturing would occur in the town of Brookston within Culver Township on Fond du Lac land, Abramowski said.
Skraba asked whether the band had talked with neighbor townships about the project.
Abramowski replied it had not and that the band has its own zoning rules.
Abramowski said the band has already budgeted for the facilities.
As proposed, an 18,000 square-foot building would house cultivation and manufacturing activities.
A separate building along the Highway 210 corridor in Carlton County would house retail operations.
About 120 to 240 pounds of cannabis flower would be produced each month along with about 15,000 edibles and concentrate products per month.
Fifty-five new jobs would be projected.
It’s the second cannabis manufacturing facility project to come before the Eveleth-based state of Minnesota economic development agency.
In October 2023, the board on a 5-3 vote moved forward a $10 million loan to Highway, 35 LLC, a company seeking to construct a cannabis manufacturing facility at the former Ainsworth wood products facility in Grand Rapids.
Projections are that the $67.7 million project would create 200 jobs initially and 400 eventually.
In separate business Tuesday, the board approved a $950,000 loan to Finnegan’s Farm LLC in Two Harbors to support a $1.9 million project to expand in-house hemp operations at the facility.
The loan would allow the hemp producer to buy equipment that would extract oils from hemp plants and allow for local processing rather than sending its product to the metro area for processing.
Other projects approved are:
• A $4.5 million loan to Hibbing Economic Development Authority for a $9 million construction of a 34,000 square-foot manufacturing facility on a city-owned lot to be leased to Advanced Machine Guarding Solutions. Twelve new jobs are planned by 2025.
• A $275,00 loan to Cast 7 LLC in Hibbing toward a $550,000 project to buy a new waterjet machine and pneumatic manipulators. No new jobs would be created.
• A $1 million loan to L& M Supply Inc. to help cover a financing gap in construction of a $54.3 million new distribution center project. 35-50 new jobs are planned.
• A $365,579 grant to Bois Forte Band of Chippewa for an $854,508 rehabilitation of three housing units on the Vermilion Sector of the Bois Forte Reservation.
• A $1.9 million grant to Center City Housing Corp. (Cobb Cook Place) for a $25.5 million project to construct 52 new workforce housing rental unit, including a three-story apartment building and town homes to replace blighted housing units at Haven Court (Greenhaven) Apartments. The new development, Cobb Cook Place, will be about ten blocks from Haven Court Apartments.
• A $298,171 grant to Center for Energy and Environment toward a $1.4 million pilot owner-occupied rehabilitation program targeting five communities with the oldest housing stock on the Iron Range, Hibbing, Chisholm, Eveleth, Ely and Aurora. A minimum of 45 low interest housing rehabilitation loans would be provided to homeowners.
• A $350,000 grant to Lake County Housing & Redevelopment Authority for a $6.7 million construction of a new two-story, 27-unit market rate workforce housing apartment building.
• A $20,000 grant to East Range Joint Powers Board toward a $40,000 funding of the East Range Seller Readiness Program, creating a fund to help a minimum of 10 home sellers to make home repairs that would be repaid at closing.
• A $350,000 grant to Lake County Housing & Redevelopment Authority in support of a $6.7 million project to construct a new two-story, 27-unit market rate workforce apartment building.
• A $140,000 grant to the city of Coleraine toward infrastructure and site work for a $1.7 million development of a 6,000 square-foot addition to Home and Comfort Assisted Living. Ten permanent jobs would be created.
• A $200,000 grant to the city of Beaver Bay toward a $1 million new water intake project for the city’s municipal water system.
• A $150,000 grant to the city of Biwabik for $1.5 million in infrastructure and facility upgrades to the Vermilion Trail Campground including a new lift station, trail and road reconstruction and bathroom facility upgrades.
• A $180,000 grant to the city of Eveleth for an $857,785 installation of new water meters throughout the city. The new meters will allow for direct transmission of water use data.
• A $15,000 grant to Gunflint Trail Society toward a $30,000 project to build an accessible boardwalk, update other trails and add a kiosk and interpretative signage at Chik-Wauk Museum and Nature Center near the end of the Gunflint Trail.
• A $37,600 grant to the city of Hoyt Lakes for a $75,200 repaving of biking and walking trails and resurfacing the park at Midway Recreation Area. Picnic tables will also be added at the newly built Midway Shelter Building. Tennis courts, pickleball court, skate park, and disc golf course will also be improved.
