Cannabis Facility Design in Minnesota: From Legalization to Implementation

Minnesota’s cannabis market is open for business, but many projects are running into red tape before they break ground. Cities are applying buffers, registration limits, and interim moratoria while the state sets licensing rules. The result? A patchwork process where cannabis businesses must navigate zoning, permitting, and occupancy classifications all at once. This article unpacks the most common challenges and how an experienced architect can help you avoid them.

Here’s how the state’s new framework has unfolded so far and why it matters for projects getting underway.

What's New in Minnesota Cannabis Permitting?

In the past few months, Minnesota’s cannabis framework has shifted from legislation to implementation, and the ripple effects are showing up in city planning departments.

• OCM rules adopted (April 2025) The Office of Cannabis Management finalized its rules and published a Local Government Guide spelling out how cities should handle retail registrations, buffers, and zoning approvals. For the first time, local governments and applicants had a clear step-by-step process to follow.

• First licenses issued (June 2025) The OCM awarded its first business license this summer. Soon after, cities began seeing applications from preliminarily approved operators seeking local retail registration—a process the state now allows even before final state licensure. That detail is critical: it puts local governments on the front line of cannabis permitting before the state is fully ready.

• Fragmented rollout Despite these guardrails, implementation has been uneven. Some municipalities adopted de-facto prohibitions by drawing expansive buffers or delaying updates to their ordinances. Others moved quickly, establishing clear zoning districts and intake procedures. The result is a fragmented rollout where one project can move forward with minimal conditions while another sits idle a few miles away.

Navigating City vs State Cannabis Rules

There is a disconnect between what the state has legalized and how comfortable cities are with welcoming cannabis businesses into their communities. The Office of Cannabis Management (OCM) has made one thing clear:

CITIES CANNOT BAN CANNABIS BUSINESSES

But they can still shape where and how they operate through zoning and registration.

State law sets three main guardrails:

• Population-based limits. Cities must allow a minimum number of retail registrations, such as one for every 12,500 residents.
  

• Distance buffers. Cannabis businesses must be at least 1,000 feet from schools and 500 feet from day cares, residential treatment centers, or park attractions for minors.
  

• Other restrictions. Cities may adopt “time, place, and manner” rules, but not outright prohibitions.

  
  

In practice, how those guardrails are applied has looked very different from one city to the next. Blaine extended its moratorium into early 2025, halting applications entirely. St. Anthony restricted retail in most commercial corridors during its zoning rewrite. Minneapolis, by contrast, clarified zoning districts early and began processing registrations, giving applicants a clearer path forward.

What’s most important to know here is that the statute may set the floor, but each city sets the rules you will actually be judged by. The way buffers, registrations, and zoning are applied can look very different from one community to the next. And with OCM unwilling to step in on zoning disputes, it is up to each developer to figure out the process city by city. No two applications end up looking the same, which is why it helps to have an architect who can translate shifting policies into clear design and permitting strategies that keep projects moving.

What Occupancy Type Is a Cannabis Facility?

Once a project has secured zoning approval and passes local registration, the next hurdle is occupancy and building code. Minnesota’s 2020 Building Code does not yet have a dedicated category for “cannabis occupancy.” Instead, facilities are classified by function, and each category comes with its own requirements for fire separation, egress, ventilation, and cost. Getting this right early is critical, because missteps are one of the biggest reasons projects stall.

Occupancy Types

• Retail dispensaries → Group M (Mercantile)

  Treated like any other retail space, with full life-safety requirements such as accessibility and egress. NFSA

  
  

• Cultivation → Group F-1 (Factory, moderate hazard)

  Frequently misclassified as S-1 storage. Because cultivation involves irrigation, lighting, and CO₂ enrichment, it is considered industrial, not storage. Some simple greenhouses may qualify as Group U, but most are reclassified as F-1 once mechanical systems and workers are introduced. NFSA
  

• Processing/packaging → Group F-1, sometimes H-3

  Typically falls under F-1. However, dust, fibers, or certain chemicals can tip these spaces into Hazardous occupancy, requiring separation from adjacent areas. SNICC

  
  

• Extraction labs → Group H-2 or H-3

  Solvent-based extraction can exceed maximum allowable quantities (MAQs), triggering High Hazard classification. Depending on solvents used and thresholds crossed, these spaces require explosion control, fire separations, and classified electrical systems. SNICC
  

• Storage → Group S-1

  Fertilizers, growing media, and packaged product may trigger high-piled storage provisions that drive sprinkler design and racking requirements.

Common Mistakes That Stall Projects

One of the biggest pitfalls is assuming cultivation is the same as storage. Most jurisdictions will not accept an S-1 classification for grow rooms; they expect F-1 because of the lighting, irrigation, and CO₂ systems involved. Another common error is underestimating the hazards of extraction. Even ethanol extraction can trigger hazardous occupancy, adding significant cost and review time. And finally, many projects stumble by overlooking mixed occupancies. A single facility might combine M, F-1, S-1, B, and H spaces under one roof, which means fire separations and exits have to be designed in from the very beginning.

Getting occupancy right is critical because it shapes cost, schedule, and the entire approval timeline. Missteps here can add months to permitting and hundreds of thousands of dollars in redesigns or change orders. The most successful projects map occupancies early, confirm them with the AHJ, and use that clarity to guide design from the start.

Image Source: “Top Ten Cannabis Compliance Issues,” HdL Companies

What Fire and Life-Safety Issues Do Inspectors Flag?

When cannabis facilities reach review, fire marshals often focus on issues developers do not see coming. These requirements can be expensive to fix if they are not designed for up front.

The issues inspectors flag most often include:

• Solvent extraction. Closed-loop system listings, maximum allowable quantities (MAQs), classified electrical, and explosion control are non-negotiable.
  

• CO₂ enrichment. Grow rooms using enrichment require monitoring, alarms, and dedicated ventilation.
  

• High-piled storage. Packaging, fertilizers, or growing media may trigger higher sprinkler densities and stricter storage plan submittals.
  

• Odor control. Treated as a nuisance issue by many cities, so filtration and exhaust placement must be designed with intent.
  

• NFPA 420 (emerging). Not yet adopted in Minnesota, but increasingly referenced by insurers and inspectors as best practice for cannabis facilities.

Energy and HVAC Challenges in Cannabis Facilities

Cannabis cultivation is unusually demanding on mechanical systems, and Minnesota’s 2024 Commercial Energy Code makes those demands stricter.

• Lighting loads: Flowering rooms can exceed 20–30 watts per square foot, far above typical office or warehouse levels.
  

• Latent loads: Every gallon of irrigation water eventually becomes humidity that must be removed.
  

• Electrical demand: Many projects require utility service upgrades or new gear.
  

• Cold climate complexity: Minnesota winters make heat recovery and integrated dehumidification especially important.

Projects that skip early energy modeling often discover undersized HVAC systems mid-construction, leading to costly change orders and delays. Coordinating MEP loads from the outset is the only way to avoid these pitfalls.

Pre-Lease Collaboration

Before signing a lease or investing in design, it is critical to understand how zoning, registration, occupancy, fire protection, and energy loads will affect your project. A parcel that looks promising on paper can quickly run into problems if it fails a buffer test, exceeds registration caps, or triggers unexpected building code requirements. Collaborating with an architect early helps uncover these issues before they become costly surprises. From mapping occupancies and maximum allowable quantities to confirming moratorium status and energy demands, we can help you evaluate sites with confidence and move forward knowing the fundamentals are in place.

At AWH, we are continuing to track this evolving landscape, and we are here to guide developers, growers, and operators. Whether your focus is retail, cultivation, processing, or extraction, we help translate shifting rules into clear design and permitting strategies.

Reach out before you sign a lease so we can help ensure your project starts on solid ground.