January 2026
BY OLIVIA HINES
For a budding market, the recreational cannabis industry in the U.S. has hit some major roadblocks. Small businesses across the country trying to capitalize on the legalization of marijuana in their states now find themselves struggling to stay afloat.
New rules, new taxes, a major shift in marijuana’s federal classification, and a tightening of hemp regulations have licensed dealers irate. As a result, some pot users are turning back to the black market, where the unlicensed product is more affordable—and more dangerous.
“It is an unfair sandbox, and there’s no possible way for me to compete,” says Mark Eide, owner of a Minneapolis, Minnesota store called In-Dispensary.
Three years ago, Eide was selling hemp-derived products at music festivals and fairs. But he says it didn’t take long to realize his one-man venture could become a serious commercial enterprise once the state legalized recreational marijuana in August 2023.
“It kinda just started out as a fun thing to do, and then I thought I could make something of this,” Eide says.
To grow his company, Eide bought an 1,800-square-foot downtown space and followed state requirements by installing a safe room to store his inventory and cameras to monitor customers. In-Dispensary soon became the 11th licensed store of its kind in Minnesota. There are now more than one hundred.
“I sunk a lot of money into getting the license,” Eide says.
Fast-forward to 2026 and Eide’s business, he says, is on the verge of going under—because he still can’t actually sell pot. He blames the problem on what he calls the state’s “ridiculous processes.”
Dispensaries like Eide’s are licensed to sell all marijuana products, but most can currently only stock edibles, THC drinks and paraphernalia. They cannot legally sell the bud or “flower” of a marijuana plant yet because supply is limited. A new Minnesota law that took effect January 1 requires all marijuana flower to be cultivated in the state—and as a result there is not enough being grown yet.
Flower is the most potent part of the cannabis plant, where most of the active compounds (cannabinoids like THC and CBD) are concentrated.
Even though marijuana flower is now legal to grow and smoke on an individual level in Minnesota, for years it was only legal for the state’s medical dispensaries to sell it. Medical marijuana became legal in Minnesota in 2014, and it was originally only available to people enrolled in the state’s medical cannabis program. As of September 2025, however, the 16 medical marijuana dispensaries licensed by the state can now sell to any consumer over 21.
“When you put all of that together, I basically understand that the government is telling me ‘we don’t care about you,’” Eide says. “How could I think of it any other way?”
Minnesota’s regulatory system for commercial marijuana sales only began issuing business licenses in June 2025. The state says it needed more time to create and implement a comprehensive licensing system.
In-Dispensary, known as “In-D” for short, calls itself “a boutique recreational retail cannabis store” that offers “one of the largest selections of THC products and accessories in the Midwest.” Yet the store is tucked away on the second floor in the downtown Minneapolis, Minnesota skyway system, projecting a low-profile image.
This involved developing rules for cultivators (people who grow cannabis), manufacturers (people who make and package cannabis products) and retailers (people who sell those products), such as product testing and seed-to-sale tracking.
As of January 2026, Minnesota’s Office of Cannabis Management (OCM) had approved 124 cannabis licenses (the majority of which are retail licenses), and approximately 1,400 businesses have “pre-approved” status and are expected to enter the market eventually.
In approving licenses, Josh Collins, the communications director for OCM, says the state also needs to consider the “supply-demand equation” when establishing a legal cannabis market.
If there’s too much legal cannabis product on the market, he says, then the price “falls through the floor” and legit businesses can’t meet profit margins. Conversely, if consumer demand outweighs product availability then prices skyrocket, and consumers will return to the illicit market.
A RETURN TO THE BLACK MARKET FOR SOME
Matthew Foley, 44, who lives in the Minneapolis suburb of Edina, says he started smoking marijuana as a teenager.
“It was pretty scary sometimes having to try and buy a bag in a parking lot or some sketchy dealer’s apartment,” Foley said. “I would drive down to Minneapolis and go pick up weed from kids who were like five years younger than me. That was pretty fucked up.”
Today, he legally purchases flower at a medical dispensary, and says he never goes to shops like Eide’s.
The Rise Dispensary located in Eagan, Minnesota is one of 16 medical marijuana dispensaries in the state.
“Ten milligrams per gummy or drink is fine if you’re new,” Foley explains, “but for crying out loud I’ve been doing it for almost 30 years that I need to eat a whole bag.”
The situation grew worse for Minnesota’s non-medical dispensaries this past July when the state raised taxes on all marijuana products by 5%—meaning products that used to have a 10% state tax rate are now taxed at a 15% rate.
This, in turn, has raised dispensaries’ expenses, reduced their revenue, and further shrunk the amount of available legal products on the market.
“You’re setting yourself up for the black market when your taxes are so high,” complains Dale, a 48-year-old St. Paul, Minnesota resident. He’s one of several Minnesota pot smokers interviewed for this story who asked us not to use their last name. They all say there’s still a stigma about pot use in some circles and point to the fact that cannabis is still federally illegal.
Continued here https://thereporters.org/reefer-madness/
BY OLIVIA HINES
For a budding market, the recreational cannabis industry in the U.S. has hit some major roadblocks. Small businesses across the country trying to capitalize on the legalization of marijuana in their states now find themselves struggling to stay afloat.
New rules, new taxes, a major shift in marijuana’s federal classification, and a tightening of hemp regulations have licensed dealers irate. As a result, some pot users are turning back to the black market, where the unlicensed product is more affordable—and more dangerous.
“It is an unfair sandbox, and there’s no possible way for me to compete,” says Mark Eide, owner of a Minneapolis, Minnesota store called In-Dispensary.
Three years ago, Eide was selling hemp-derived products at music festivals and fairs. But he says it didn’t take long to realize his one-man venture could become a serious commercial enterprise once the state legalized recreational marijuana in August 2023.
“It kinda just started out as a fun thing to do, and then I thought I could make something of this,” Eide says.
To grow his company, Eide bought an 1,800-square-foot downtown space and followed state requirements by installing a safe room to store his inventory and cameras to monitor customers. In-Dispensary soon became the 11th licensed store of its kind in Minnesota. There are now more than one hundred.
“I sunk a lot of money into getting the license,” Eide says.
Fast-forward to 2026 and Eide’s business, he says, is on the verge of going under—because he still can’t actually sell pot. He blames the problem on what he calls the state’s “ridiculous processes.”
Dispensaries like Eide’s are licensed to sell all marijuana products, but most can currently only stock edibles, THC drinks and paraphernalia. They cannot legally sell the bud or “flower” of a marijuana plant yet because supply is limited. A new Minnesota law that took effect January 1 requires all marijuana flower to be cultivated in the state—and as a result there is not enough being grown yet.
Flower is the most potent part of the cannabis plant, where most of the active compounds (cannabinoids like THC and CBD) are concentrated.
Even though marijuana flower is now legal to grow and smoke on an individual level in Minnesota, for years it was only legal for the state’s medical dispensaries to sell it. Medical marijuana became legal in Minnesota in 2014, and it was originally only available to people enrolled in the state’s medical cannabis program. As of September 2025, however, the 16 medical marijuana dispensaries licensed by the state can now sell to any consumer over 21.
“When you put all of that together, I basically understand that the government is telling me ‘we don’t care about you,’” Eide says. “How could I think of it any other way?”
Minnesota’s regulatory system for commercial marijuana sales only began issuing business licenses in June 2025. The state says it needed more time to create and implement a comprehensive licensing system.
In-Dispensary, known as “In-D” for short, calls itself “a boutique recreational retail cannabis store” that offers “one of the largest selections of THC products and accessories in the Midwest.” Yet the store is tucked away on the second floor in the downtown Minneapolis, Minnesota skyway system, projecting a low-profile image.
This involved developing rules for cultivators (people who grow cannabis), manufacturers (people who make and package cannabis products) and retailers (people who sell those products), such as product testing and seed-to-sale tracking.
As of January 2026, Minnesota’s Office of Cannabis Management (OCM) had approved 124 cannabis licenses (the majority of which are retail licenses), and approximately 1,400 businesses have “pre-approved” status and are expected to enter the market eventually.
In approving licenses, Josh Collins, the communications director for OCM, says the state also needs to consider the “supply-demand equation” when establishing a legal cannabis market.
If there’s too much legal cannabis product on the market, he says, then the price “falls through the floor” and legit businesses can’t meet profit margins. Conversely, if consumer demand outweighs product availability then prices skyrocket, and consumers will return to the illicit market.
A RETURN TO THE BLACK MARKET FOR SOME
Matthew Foley, 44, who lives in the Minneapolis suburb of Edina, says he started smoking marijuana as a teenager.
“It was pretty scary sometimes having to try and buy a bag in a parking lot or some sketchy dealer’s apartment,” Foley said. “I would drive down to Minneapolis and go pick up weed from kids who were like five years younger than me. That was pretty fucked up.”
Today, he legally purchases flower at a medical dispensary, and says he never goes to shops like Eide’s.
The Rise Dispensary located in Eagan, Minnesota is one of 16 medical marijuana dispensaries in the state.
“Ten milligrams per gummy or drink is fine if you’re new,” Foley explains, “but for crying out loud I’ve been doing it for almost 30 years that I need to eat a whole bag.”
The situation grew worse for Minnesota’s non-medical dispensaries this past July when the state raised taxes on all marijuana products by 5%—meaning products that used to have a 10% state tax rate are now taxed at a 15% rate.
This, in turn, has raised dispensaries’ expenses, reduced their revenue, and further shrunk the amount of available legal products on the market.
“You’re setting yourself up for the black market when your taxes are so high,” complains Dale, a 48-year-old St. Paul, Minnesota resident. He’s one of several Minnesota pot smokers interviewed for this story who asked us not to use their last name. They all say there’s still a stigma about pot use in some circles and point to the fact that cannabis is still federally illegal.
Continued here https://thereporters.org/reefer-madness/
