A small Minnesota city rolled out the red carpet for jobs in cannabis growing

LE SUEUR – Chris McPhillips figured more than four years ago that producing cannabis would be a lot more profitable than selling it.

It’s the next gold mine, the big oil gusher, the wave of the future. And the Twin Cities businessman was determined to get in early on the action. What he didn’t know about in 2020 was the millions of dollars, the former Green Giant factory, and the support of a Minnesota city he would need to make it work.

McPhillips, like hundreds of other entrepreneurs, is waiting for Minnesota’s Office of Cannabis Management to start awarding licenses to companies ready to grow cannabis and marijuana that will soon be for sale across the state. But he has built-in advantages that could position his new enterprise, Minnesota Valley Cannabis Co., to take a hefty share in the billion-dollar-plus industry that’s poised to take over Minnesota.

“When we spoke to the city of Le Sueur, they didn’t balk at us coming here,” McPhillips said. “I decided to invest the money that I’ve made here.”

McPhillips is getting outsized attention for his audacious plan to turn a 50,000-square-foot building built in the 1960s into a massive cannabis-growing operation. He bought the building, one of four in the former Green Giant complex in Le Sueur’s industrial neighborhood, about two years ago. Once he secures a license, he plans to invest up to $10 million in the facility and hire up to 250 workers — 50 full-time, up to 200 part-time — to start operations by the end of next year.

McPhillips owns Crown Automotive, an auto parts distribution company out of Bloomington. He’s also worked with partners to found CrunkBabies, a Twin Cities-based clothing line. But he switched his focus to cannabis once word came from state leaders that Minnesota was interested in legalizing the sale of recreational marijuana.

“There’s only a few markets that come in our history that are brand new,” he said.

Industry experts expect Minnesota’s retail cannabis sales to top $1 billion once they start in 2025. Some financial firms predict Minnesota’s industry could hit $1.5 billion in annual sales and serve one in eight residents by 2029; other firms are more optimistic.

But McPhillips needed a facility to capitalize on that. State officials require indoor manufacturing of cannabis, and industry experts say it’s best grown indoors in a controlled environment. It took more than two years to find a spot that he and his partners could use to grow, a large-scale building ready to be retrofitted with the kind of ventilation, temperature control, freeze rooms and lab space necessary for a successful cannabis operation.

Le Sueur is no stranger to agribusiness. The community of about 4,200 is the birthplace of the Minnesota Valley Canning Co., which started in 1903 and eventually grew into the Green Giant brand. Green Giant was sold to Pillsbury in 1979, and its corporate headquarters moved to Minneapolis shortly thereafter.

The processing plant tapered off after that, closing entirely in the mid-1990s, with only a research center remaining in town. McPhillips’ building on the south end of the former campus has been used for storage for more than a decade.

But it was one of several sites local officials had in mind to market once they heard about Minnesota’s cannabis plans.

“We really wanted to have this conversation,” Le Sueur Administrator Joe Roby said. “There are going to be companies, investors, entrepreneurs that need space. They’re going to need communities that are willing to work with them to grow their dreams and visions.”

Le Sueur has several businesses in town, including Cambria and Davisco Foods, but the city has grown only in fits and starts over the past few decades. Its population was at more than 4,000 residents in 2010, according to U.S. Census Bureau data; the town has grown by only about 500 people or so since the 1970s.

But small cities like this have more flexibility to assist businesses, according to Jessica Beyer, a consultant with Region Nine Development Commission and a former Waseca County administrator.

Smaller communities often have access to grants or programs to offset their financial disadvantages compared with bigger cities, and there can be fewer local permitting requirements. Small cities like Le Sueur have a lower cost of living compared to the metro area, and they may already have the infrastructure to accommodate several businesses, despite a smaller labor pool.

“It doesn’t always have to be a large company or large opportunity,” Beyer said. “Communities can be nimble, and they’re looking at creative ways to find what fits in.”

Le Sueur officials have embraced McPhillips’ proposal. They cleaned up zoning language earlier this year to specifically allow indoor agriculture at the plant and even suggested McPhillips’ new company name. Business owners in Le Sueur’s downtown say they either haven’t heard much about the plant or they embrace the idea as a way to expand the town’s economy.

McPhillips said it’s been easier to secure the permitting and assistance he needs from city officials here than in metro-area communities. He’s already heard from people interested in working at his startup.

“At the end of the day, they’re farmers,” McPhillips said. “They’ve worked these fields down here, worked at this plant when they were teenagers, and they understand this is a cash crop.”

McPhillips and Minnesota Valley Cannabis Co. were among the 648 applicants in the state’s since-canceled cannabis license preapproval lottery. He had plans to begin retrofitting the building once the lottery took place, but state officials announced earlier this month that they would abandon the lottery in response to a lawsuit by applicants who claimed they were unfairly denied entrance to the vetted drawing.

Minnesota Valley now has to wait until the licensing process starts up next year, but McPhillips is confident he can get the plant operational by the end of 2025 — as soon as he gets that license.

“We’re going to grow some of the best cannabis in the world here,” he said.

He also plans to pay homage to Le Sueur’s roots. While he’ll retrofit much of the empty space into self-contained growing rooms, cloning labs and storage space, he plans to use old photos to remodel the plant’s entryway as it was under Green Giant, to honor the community that’s taking a chance on his idea.

Roby said Le Sueur has the space to work with more cannabis or agribusiness startups.

“It’s a great example of all the new, exciting, forward-thinking work being done in the economy, and it does happen in greater Minnesota,” Roby said.

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