GRAND RAPIDS, Minn. — Angel Bursch’s business is licensed to grow cannabis at one site and sell it nearby.

Although the sites are within a 20-minute drive from each other, the Grand Rapids woman said it feels like they’re awfully far apart these days. With so few companies licensed to transport cannabis in Minnesota, getting her product from point A to point B isn’t so simple.

“We’re totally stuck,” said Bursch, owner of Loonatixz Genetixz. “The whole state of Minnesota is pretty much stuck because no one can transport anything.” 

Two years after Minnesota legalized recreational cannabis, Bursch and others who have high hopes for cannabis dispensaries in Greater Minnesota say this transportation bottleneck is contributing to supply shortages, stymying independent businesses as they attempt to get a foothold in the industry.

So close yet so far

Loonatixz Genetixz has cannabis clones ready to sell if it could get them to the dispensary. Clones are genetically identical but immature cuttings taken from a mother plant, which, when potted, gives someone a head start on growing cannabis at home.

“People love them because it gives them a faster growing experience than a seed,” Bursch said.

Related: As hemp THC industry lobbies Congress for regulations, could Minnesota be a national model?

The clones are at the business’ cultivation facility. She’d like to be selling them at her dispensary immediately before adding more products from mature cannabis plants once the business completes its first harvest in December. 

Bursch could take two routes to get clones and other cannabis products from the cultivation site to the dispensary. Both are rife with obstacles.

Route one entails finding a licensed transporter. She’s come up empty trying to find one.

Within industry circles, she hears echoing sentiments from other dispensary owners looking to move or secure products. As of late November, three licenses had been issued in the state to businesses to transport cannabis, according to the Office of Cannabis Management (OCM). About 30 prospective transporters have preliminary approvals.

Since opening on Halloween, Voyager Cannabis Co. in Mankato hasn’t been able to offer a full complement of products. It does have a suite of strains from the White Earth Nation, the options including a sativa known as Lemon OG Haze, an indica named High Society and a hybrid dubbed Blu Wabooz.

Walk into Voyager and staffers can talk you through each strain’s effects, potency and taste. Ryan Rutjes, who works at Voyager, said the store will in time have pre-rolled joints and THC carts for vaping, among a larger line of products.

Customers come in wanting these products, but the store can only get what its supplier has available.

“We’re revving up to start our own grow,” Rutjes said. “We plan on having a full menu, but really we’re at the mercy of the Minnesota market right now.”

Many dispensaries, Voyager included, eventually plan to sell their own lines of cannabis products as a way to establish a distinct brand from what customers could find at chain dispensaries, similar to how microbreweries distinguish themselves from bars. 

Just as people seek out microbreweries in Mankato, Grand Rapids and St. Cloud because they want a unique beer, they may seek out an independent dispensary for a unique cannabis product. Imagine how hard it would be for microbreweries to brew unique beer if few transporters were licensed to deliver hops — a plant that happens to be closely related to cannabis.

Not cheap to cut out the middleman

Bursch’s other option for getting cannabis from her cultivation site to her dispensary entails obtaining her own transport license. Cutting out the middleman sounds appealing on the surface. The problem, Bursch said, is the requirements aren’t fair to small businesses. 

By law, she’d need a surety bond or insurance covering at least $300,000 for lost or damaged cargo plus at least $1 million in liability insurance. Companies intending to transport cannabis for multiple businesses can meet those requirements much easier than Bursch could. To put the $300,000 cargo insurance in perspective, Bursch expects to only be transporting about $25,000 worth of cannabis per harvest. 

“My whole complaint is why do we have to pay the same premium as what the big people are?” she said.

“Limited transportation options,” as OCM described it in a Nov. 19 guidance memo, prompted the agency to temporarily lighten regulations on transporting cannabis products, although it doesn’t allow transport from a cultivation site to a dispensary. Instead, for 90 days, business licensees can transport their own cultivated or manufactured products to a licensed testing facility. 

State law requires all licensed cannabis businesses to test products before sales. Minnesota has three licensed testing facilities, two in St. Paul and one in Waseca.

Justin DeMarais briefly looked into a transport license for his MN Grass Hero dispensary in Rice, a small town in Benton County about 15 miles north of St. Cloud. He didn’t go any further once he found out he couldn’t go directly to a supplier to transport cannabis to his store. A licensed microbusiness can only transport cannabis from a cultivation site owned by the same licensee.

Unable to transport cannabis himself, DeMarais said his store hasn’t had any supply since getting licensed in mid-November. His store only has low-dose hemp for sale, the same products that customers can find at any smoke shop.

About 15 calls come in every day, mixed in between about five to 10 people walking in, to ask when the store will have cannabis flowers for sale. Other dispensary owners are directing the same questions to suppliers, DeMarais said. In social media groups composed of cannabis dispensary operators, he sees new licensees asking for leads on suppliers.

“We’re all running into the same problems,” he said. “Every one in the group is singing the blues. People are saying, ‘I got the license, where can I get product?’ We say, ‘Good luck.’” 

DeMarais got into the cannabis industry after benefiting from medicinal use to lighten his Crohn’s disease symptoms. Before medicinal cannabis, he said he was losing weight and having trouble getting through a full work day without vomiting.

Helpful as medicinal cannabis was, it was expensive, costing him between $300 to $400 per month. He started using low-dose hemp as an affordable alternative, eventually opening his store to sell it about five years ago. All along, he planned to someday expand into selling recreational cannabis once it became legal.

Someday was supposed to be here by now. As it stands, DeMarais is spending about $5,000 per month to rent space for a cannabis dispensary with no cannabis. “That’s a big chunk to stick into something not knowing when you’ll be able to turn a profit or break even,” he said. 

DeMarais worries it’ll be March before his store has flowers in stock. Voyager hopes to have a wider selection of products soon, knowing that in time the supply will increase as more transport options come online, Rutjes said.

Related: Cities test limits of Minnesota cannabis law, exposing legal gray areas

Bursch thought maybe by January her dispensary would have products from her harvest to sell, provided the transport question gets answered. February or March now seems more realistic to her. She opened her store over the weekend after Thanksgiving to sell low-dose products. 

“We needed something to keep the doors open,” she said. 

DeMarais sought his cannabis license when he did because his county capped the number of cannabis businesses that are allowed in the county. He had to decide between opening sooner without a product to sell, or waiting and risking losing out on one of Benton County’s coveted licenses. 

Alleviating the supply and transport shortages would go a long way toward helping small businesses like his survive, he said.

“The way the rollout is, there won’t be many of us left,” he said. “It’ll only be the big people left.”