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November 26, 2024 St. Anthony Council Work Session - 3 Patrick Hurley from Voyageur Cannabis Services reviewed a PowerPoint including Executive Summary, Market Insights, Strategic Alignment, Financial Strategy, Marketing and Growth Strategy, Organizational Structure, Implementation Timeline, and Next Steps. Mr. Erley noted St. Anthony is not subject to the lottery system and allows St. Anthony to shape how cannabis is distributed. He reviewed the strategic benefits of a municipal dispensary being enhanced local revenue, improved public health and safety and community engagement and development. Minnesota’s legal marijuana sales are projected to reach $1.5B by 2029. Councilmember Randle arrived at the meeting at 5:38 p.m. Councilmember Elnagdy arrived at 5:40 p.m. Mr. Erley reviewed the regulatory considerations. The six building blocks for developing the business case for St. Anthony’s dispensary were reviewed. In reviewing the business model, he noted there is a potential for a delivery service. Store location, facilities, and utility expenses were reviewed for the two locations. The recommendation is to exclude the 2945 Pentagon Drive location due to zoning restrictions near schools, proposed location is very close to a Montessori. Comprehensive Security Measures are necessary for dispensary safety and compliance. The best partners for optimized operations need to be selected. Metric Tracking System is the industry standard and is State-mandated. The revenue projections were reviewed. Revenue is forecasted for immediate growth and market adoption with year 1 estimates exceeding $3 million. Total estimated investment costs are >$500,000 over five years over three phases. Marketing Strategies for Cannabis Dispensary were reviewed. Mayor Webster asked when was it originally on the timeline for licenses to be granted. Mr. Erley stated November was when the drawing was to be held. She asked if cities would be contacted prior to the lottery “winners” being announced. Mr. Erley stated once someone was selected they would reach out to the City. Councilmember Jenson asked if there is a deadline for applying for a license and Mr. Erley noted there is no rush as there is nothing in the Statute about when a municipality with a license needed to act. Councilmember Randle asked what social equity applicant means. Mr. Erley responded there are a lot of different qualifiers (military veteran, social-economic variables, been charged with a crime related to cannabis). The first round was for social equity applicants to enter the lottery. Councilmember Jenson referred to the executive summary stating St. Anthony needs to move fast. Mr. Erley stated it would be advantageous to have the first dispensary in St. Anthony to obtain the most market share. Councilmember Jenson stated he feels that competitive advantage is based on price and quality of the product. Councilmember Elnagdy stated there is a huge benefit to be first up and running. Mayor Webster stated our liquor stores have a huge following. Mr. Erley stated Minnesota is the first state to allow cannabis sales in municipal liquor stores. Councilmember Doolan referred to the revenue curve and compared it to the business case for operating net cash. She asked what is built into the net margins and what drives the profit margins. Mr. Erley stated the first graph was looking at state-wide trends. 4