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Cannabis businesses hopeful for license lottery
The recreational cannabis industry in Minnesota is taking a step forward during the next few weeks, as hopeful business owners hope to win licenses through a social equity lottery that will offer 282 licenses – to more than 3,100 applicants.
MINNEAPOLIS (FOX 9) - A first-of-its-kind restaurant in Minnesota that allowed patrons to dose their entrées and drinks with THC tinctures will close its doors in Minneapolis on Dec. 5 after less than two years in service, citing issues with fines and licensing that made it hard for the business to keep margins high enough to survive.
What happened
Hi Flora, owned and operated by chef Heather Klein, opened its doors in June 2023 at 2558 Lyndale Ave. S, offering vegan fare and water-soluble THC tinctures that can be added to either food or drinks served.
However, despite the genre-bending concept, the establishment was still under the purview of several Minnesota laws already on the books – one of which requires a liquor license to operate a low-dose hemp business, despite the restaurant not having alcohol bottles on its premises.
The license proved costly for Klein, who said on social media the restaurant had been operating on temporary permits in the meantime.
Another roadblock appeared in August, when its tinctures were pulled due to state restrictions mandating new labeling regulations. As of Aug. 1, 2024, Hi Flora’s sales had dropped 50% as a result.
"Unfortunately, this beautiful space we have built has not proven to bring in enough revenue without the hemp tincture concept," Klein said in a social media statement. "This reality has been hard to accept, especially since we’ve built a one of a kind safe space that’s all about plants, wellness, healing and connection without alcohol."
Despite its closing, Klein says the location has been a "true restaurant ownership school" in which she’s worn "every hat imaginable and learned so much about running a restaurant."
State complaints
According to Office of Cannabis Management (OCM) interim director Charlene Briner, its offices received complaints about an incident involving a customer who experienced a serious adverse health event after consuming a hemp-derived cannabinoid product at the restaurant in August.
As part of its response, the OCM conducted an inspection that identified numerous non-compliant products and practices that the department says were voluntarily destroyed.
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"This was not the first instance of complaints about this business leading to inspectors finding violations, including on-site consumption without an alcohol license, selling products exceeding the legal amount of THC, and permitting customers to leave the establishment with open cannabinoid products," Briner said in a statement to FOX 9.
The repeated violations resulted in a final penalty of $7,500 for the business.
What’s next
Although scarce on details, aside from a sale of the remaining product, Klein hinted in her social media post that she’s "actively exploring new options and opportunities."
In January 2024, Klein presented THC-infused cooking demonstrations during the Lucy Leaf Expo – a conference and trade show for the cannabis industry held in Minneapolis.
The Source: FOX 9 reviewed a Hi Flora social media post and reached out to the Office of Cannabis Management for the information contained in this story.