Eighteen, VIDA meeting to order. Any changes or corrections to the agenda before we start? No changes from staff. Okay. I'll move approval of the agenda. Second. All in favor? Aye. Okay. Motion passes. Minutes, any corrections from last month's meeting? Okay. We get a motion to approve those then. Motion to approve. Second. All in favor? Aye. Okay. Opposed? Wonderful. Al, you wanna whip through real quick all these little thingies? I'll let Kelly do that. Okay. There's just the city council minutes,
P and C minutes, the newsletter from Greta and, the budget. So unless you guys have any questions. Anything you thought we needed to know from any of those? No. Okay. No. Perfect. It's going to be a quick day. Okay. Okay. We have no public hearing. And on to the unfinished business of today. We do have with us virtually Michael Blitzer from Delaney Consulting. He has been working on our feasibility study for municipal cannabis operations. We've been meeting with Michael and Flora for,
well, weekly, I guess, since the first of the year, going through this and trying to perfect the numbers as best we can. There's a lot of thought that's been put into where we're at. I want to be upfront and let you know that I have pressed Delaney Consulting to stay extremely conservative on their numbers. And so I know we've talked about this several times, and he'll go through that. But I feel very confident that we are being conservative as best we can and
still in the realm of realistic. So with that, I'm just going to turn it over to Michael and let him present. He's got a fairly there's a ton of information in here. I did send that out so that you had a chance to look at it, but he's going to go over it in a little more detail and answer questions. So Michael, I'll turn it over to you. Great. Really good setup, Al. Appreciate it. And, good morning to, the Byron Beta team. Let's get into it. I think what Al, set up, our intention today my intention today is to get through,
really what is, six meaningful slides and four kind of fillers, if you will, and and leave as much time at the end for this group to ask questions, hone in on on specific areas that are of most interest to you, and, should have depending upon the time available, are we still running till nine if needed? Just not past nine. Yep. No worries. So let's get into, let's get into the agenda. The executive summary will start there. A little bit of an overview on the modeling, an overview on the startup expenses,
how that models through a seven year, pro form a, and then some very basic recommendations and next steps. And then, like I said, leaving as much time as we can at the end for questions and discussions. Excuse me. I have on page, identified on the slides what page we're on, relative to the full, feasibility and business plan. So page three is, an executive summary and, just dovetailing on what Al said. We followed, Byron's lead, on a conservative approach both in the financials and operational modeling.
Our independent models are inherently conservative, in nature. We have that approach already built in. I would say that Byron, I think appropriately and appreciatively layered even more conservative decision making on top of that. The the the net net is Byron City owned, dispensary model and model's profitable. And, and when you layer on a JPA, it increases the profit dollars by over 300 percent. In addition to that, because of the conservative approach, there's real opportunities,
not hypothetical, real opportunities to increase profits largely by reducing, startup costs and not adjusting anything in the models, for for revenue, customer counts, average transaction mix, things like that that we do believe that there are actual opportunities in. It's just much more difficult to model that, versus documenting the start up expenses. Other two things with the executive summary is today, February 18, opened up the licensing for the state. So that creates a high sense of urgency for all cities to act,
along the same timelines as private enterprise. And there's exponential impacts to applying for, licensing, by March 14 today in this way. The pro form a approach and assumptions, I'm summarizing a lot here on, really, look, pages five through seven. But I just wanna highlight how how we got to, the outcomes in this. We've used seven unique national and state data sources. They're documented for you, in the business plan. We assume that the city owns, will own their facility,
and we estimate that, and and for the usage and the operating model at a 2,500 square foot retail store. It allows for up to two competitors operating in close proximity. Those would likely be in Rochester. The customer counts uses our our our modeling, but specific to Byron, we've we've, of course, pull census data. We're looking at population counts, above the just the age of 21, and we minimize that down to, consumption and participation in the market. We overlay GIS data to understand,
how how large of a trade area at five miles and seven miles gives you customer counts above the age of 21. And most importantly, what was unique to Byron, one of the things unique to Byron is are your communities that, are opposite, flanking you on the Rochester side, and we believe that just the positioning of the Byron dispensary, will pull a lot from those communities as well. Then we look at the, significant traffic counts on Highway 14, and then Al, Kelly, and team have done a really good job about giving us local insights as well to, unique aspects to Byron.
The largest single differentiation in consumer behavior participating in the cannabis market, demographically is age. So we also hone in a lot on the buying difference and consumption differences in age. There's not been documented to date. There is a little bit of a material change in in in gender, meaning, males do participate a little bit higher than females in the market, but that number, that gap is actually closing, a lot. And, when you get to other just basic demographics of household income,
education, race, things like that, there isn't a lot of material difference in the participation in the market. And then we have a a ton of scrutiny in our market in our in our model, excuse me, around product mix, product pricing, cost of goods sold, that we pull from from national sources. The unknowns, which are important to highlight and are again documented in our business plan, the impacts of illicit or black markets. I don't know if you're aware of this. There was a a study rereleased or re redone. We put this in front of, the Byron team a couple of weeks ago.
I think it came out the end of it came out the February, but was dated, like, January 15. Olmstead County has actually the most active illicit market in the state, something to just identify. That is that bodes well. That means that there's pent up demand, in a higher, percentage in Olmstead County than there is anywhere else in the in the state. Second, unknown is product availability and pricing in years one and two. I'll get to what that means,
in a in a later slide. And then, the timing of federalization and if that were to happen, within, the seven year timeline that we've laid out. Getting a little bit deeper into modeling, just to touch on a couple of the really big factors that get to, revenue and and profit projections is, like Al said, this is a a conservative model. We, we take your customer accounts. We basically boil it down in the center of our model, our transactions, per month. And we based on your customer counts,
we have 1,826 monthly transactions in in, retail, dispensary in in Byron at a, average, spend of $97. We believe that that's conservative but appropriate for this model as well. And it it leverages, where you're gonna have opportunities that I think are unique is in that that Highway 14 traffic and in those adjacent communities that are opposite to Rochester or North South to Rochester where they're coming in or leaving, in similar,
bedroom communities as as Byron would be. So you see that in the chart at $18.62, the third from the top, the $97 as well. And then as you go through this chart, you come down, to, customer counts, on the non Byron, residents at 812, we believe that there is, as long as Byron can deliver, a meaningful product, meaningful price, meaningful experience to consumers in this model, We believe that you should experience year over year growth organically, not just from growth,
in population. And just to to emphasize this point, the only growth in revenue that we've built in is growth in population. We have not built in growth due to organic growth or year over year comp in the model in securing customer loyalty. Startup expenses, really dictate, how you're how you're gonna be profitable over seven years. Again, this is conservative as well. We've over engineered intentionally these estimations. The store build out is is almost always so rare exception.
Almost always going to be the largest point of investment in any new retail event, venture. The store build out costs are are just a little bit above a million, right, a million 60 4 thousand. And we believe that that can be reduced and or, should the city of Byron move forward in in further consideration. We believe that there the the very next step, which is this this next bullet point, is really looking at what the best, investment options are for the city of Byron in the facility. Does it make sense once we more true up costs to invest that into your
existing facility, which is already a city asset? Or does it make sense to, either build different facility with better, real estate options, better visibility on Highway 14, etcetera, at similar costs. Now that would just be the consideration of building out or building new. The, draining the the the bottom half of the, the startup expenses, you're totaling, a million and a half, and this is all in. Again, we do this in a conservative manner to satisfy the need of feasibility. We have a very high confidence that that number can be reduced either on your
own or significantly more in the structure of a joint powers agreement. It's It's important to note that your loan, what we've defined as your loan threshold, it would not cover inventory, would not cover labor, marketing, and some fees. So your loan is that bottom number, which is really tough to read about one one point, just a little bit of under one point, 2,000,000. So what does this mean? This is, sort of the net net, the big outcomes, page 39, of the report. We do a seven year, pro form a. It takes the customer modeling and conventions that I talked about,
and then it, of course, estimates, all of your expenses. We do build in natural expense growth. We have a flat growth around some fixed costs, right, that start, in year one. And then we build in, growth of labor at 6% to match your 3% COLA and your 3% STI. And then we we we reduce COGS. We reduce some margins and so on. But generally speaking, it's a flat model in terms of the transactions in your store. But the revenue,
as you can see in year one and year two, is significantly more than, years three through seven. And the reason this is is every market starts, in cannabis with, a very high demand and a very low supply, and that drives the price points up while reducing your margins. So you have to get as much inventory as you can, secure as much inventory as possible, reason you know, reasonably speaking to match what you feel your estimates are. But toss for the suppliers,
for the cultivators are also very high in these initial, initial two years, and that results in higher prices on the shelf for the consumer. So we we believe confidently, and it's documented really well on the national data that you can see this, one, two, three year trend where you see that, the average pricing increases. But, really, units are about the same, transact the same, but the the cost of goods is so much more in those first two years. You go all the way down, and I'm just gonna,
sort of, highlight just a couple of things in here. And then, again, what I really wanna get to with this group is is what's most important to you on this call. So net income is the most important. Right? What will this investment mean to the city of Byron? How much can you transfer back for capital purposes, to reallocate for the city? And and you're positive across the line. This is a a net profitable adventure, for the city. But in in my estimation, I don't know that I would go about investing these dollars with this level of
documentation in terms of a net income, just to be clear. What we intend to do with this to say is to is to really estimate risk. And we believe with these numbers, we have just high confidence that this model will return profit to the city of Byron. When you go to a JPA, structure so what we've proposed with, multiple cities in the state of Minnesota is to not go this alone, but to form an an associated type level, joint powers agreement that cities are familiar with already.
And this what this really does is it it it brings down your startup cost significantly and your ongoing expenses in another meaningful way. But percentage wise, your startup costs are are lower. And then at at a, at a secondary rate, your ongoing expenses are are lower as well. So this increases your net income by 300%. We're just assuming three additional other cities, to form a JPA. The revenue, if you if you just look and you compare the charts, you can kinda eyeball it back and forth.
Revenue really stays the same. Your profit gains is really done through efficiencies, and those efficiencies are through, consolidated buying. If you think of just supplies, technology, we believe that we can get better rates, you know, just, assumptively, by buying more, under the same same conventions and naming, across four four groups than one. We believe that this can impact, marketing most significantly as well. Retail cannabis is a highly, marketable, sector in retail. The investment is really important to,
to put there because it's what the customers expect. There's gonna be a lot of noise to break through to understand where dispensaries are, what they offer. But more importantly is to get every consumer in a marketing, system via loyalty program. And that takes, expertise, and it takes capacity and a specific skill set to run those programs in a way that a a dispensary needs to continue to drive traffic back to the stores. Speed to a JPA is is critical to realize benefit and start up costs,
especially. Right? So if we can get these cities working together, identified and then working together, the more we can, come to an agreement of what's included in the JPA. We've made smart, informed estimates based upon, conversations with numerous cities about where these savings would come from. But it would really be up to, of course, the JPA body to, define that, work through it, and then, put a group at the center. Hopefully, ideally, that would be Delaney Consulting, but, certainly understand that that would probably have to go to bid as well,
for something like that. Alright. So recommendations and next steps. You certainly have a lot of information to digest, discuss, and then ultimately decide and act quickly. The licensing closes on Friday, March 14. The minimum cost of entry at this point for any city considering this is $2,500 plus any additional expenses, which is just really time and energy put into it to fill out the application. What, what we are trying to position cities to to understand, and we believe Byron probably knows this better than any city we're engaging with right
now, is this opportunity is unique. This opportunity is timely, and, this next barrier to entry is very small to allow a city to continue to make larger decisions, more important decisions. And just to remind this body, applying for a license does not mean you're going to open a dispensary. It simply means that you're taking it seriously. You're continuing your due diligence. And if you want the opportunity to open a dispensary, you're keeping your city in the game to be able to do that.
We have no assurances from the state OCM when licensing would reopen again for a city, how many licenses would be available, what structures they might take to, to minimize, dispensary licenses and so on. So we are are strongly encouraging cities to take this seriously and, and create urgency to to fulfill this license. Beyond licensing, really the next steps is are to focus in on the areas in the feasibility study and business plan that will take longer time, to, just to vet out.
The the biggest being your facility and more formally exploring, the cost benefit, trade offs to building new or building out a retail facility. The second largest, second way to impact your profitability and really this overall viability of this model is in the JPA, model. And then the third is, is just continuing due diligence. Alan team, have work streams going with your existing banking, existing insurance. But there's, there's still work to do there to secure those solutions,
make sure that they're the right choices for the city of Byron, and and then true up those costs as well. And then the last is considering your start up financing thresholds and impacts. Of course, the more you reduce that that burden and reduce, that loan, the more impact, you'll see in your your seven year, profitability. Okay. That's about it. I wanna, thank, the city of Byron. Al and the team have been really great to work with. We feel like we've we've matched really well in our approach. We feel like, we have a very high confidence in what the data is telling us,
what the operating model is, and that leads to a great excitement, that we have for the city of Byron about the potential of municipal, cannabis and what it would mean, not just for your bottom line, but for the citizens in terms of accessibility as an employment center for the city and, how it could impact the community, year over year in capital spend and what those things might be. So with that, I'll open it up for questions, comments, any anywhere that you would like to point to and dig in to understand better, the work we put in front of the city.
Michael, I want to start. I've had a couple of conversations since we talked last. The City of Buffalo has expressed a great deal of interest. They have some other things going on as well. So their timing is a little bit in question, but they are very intrigued and interested in the JPA format and see the benefit. Al, if I mind with Byron, they've reached out and want to start an engagement for licensing with us as well. So they've increased that confidence, and we're starting to put together a proposal with them to take them through the
licensing portion. Very good. And then on Friday, I also had a conversation with staff members from Owatonna that expressed an interest. And they're not quite as far along as we are, but they're really intrigued by the JPA. And we thought we might have an answer as quick as this week, but I think they would be pretty optimistic for where they're at in the process. But there are other communities. I know that Buffalo has some smaller communities in their neighborhood that are very, very interested as well,
but I haven't talked to them specifically. But having those two intentionally looking at it, I think, is very important and very optimistic for the JPA. And I do think that, that is an important aspect. I think Michael has done a nice job of expressing why. But the JPA makes a pretty significant difference to where we're at, in my opinion. So would we if we wanted to move forward, would we be applying for a license without knowing we have a couple other cities
on board so we would be like we're in no matter what, but we're hoping to do the JPA? Well, the license is separate from the JPA. The license is ours. So the answer is yes. I think what you're hearing here and my recommendation based on the work we've done, well, it's an additional investment. There's a $2,500 application fee that's immediate, and I believe there's another $2,500 at the back end. So $2,500 today, but I'm going to tell you it's a $5,000 investment to get a license. And once you have the license,
now you can start looking at where do we go. I definitely would not start a build out or a remodel or investing in these other areas until we have that license in hand. I think that would be foolish. I know it's an additional investment, but that's really our next step is to know that we have that before we start chasing $1,500,000 worth of start up costs. Can anyone apply for the license? So if Any private sector can apply. Municipalities are not treated quite the same as the as the private sector,
and I'd let Michael address that. The the private sector, I believe, is in more of a lottery. Yeah. I can I can give a a quick overview of that? So the, the state has defined a total number of dispensaries, based upon, kind of what they look at as consumption, and that's one dispensary for every 1,250 people in the state. They've, put the number of retail, total retail licenses that they will have upper, the cap. Right? The the highest number will never exceed 150 private enterprise licenses.
Of those 150, 70 five are social equity licenses and 75 are, open to private private enterprise. Those licenses will all be lotteried. Right? So anybody to to whomever asked that question, yes. Anybody can apply for a license. You have to meet the, pretty stringent, application requirements. And once you do, you'll go into a pool, and then a lottery would be administered to that. Now you layer municipalities on that. Municipalities are not part of anything I just mentioned.
Any municipality or county can apply for a license, and that license is incremental to the, number of the 50, licenses available. So you have a, I guess, a significantly easier path to secure. And in our twelve plus years working with municipalities in, in in liquor and, retail operations, we do see that the state treats, cities differently, than they do, private enterprise.
And as long as you have your due diligence done, as long as you have your application completed on time, so on and so forth, We have a high confidence that any city that applies and meets those thresholds will be granted a license as that's what the legislation says. So how many possible competitors could we have if we do the license? I mean. Yeah. Great great question. We we put that at two, two within a reasonable trading area, and that would be, you know, within twenty, thirty miles. If you think about the, the population center of Rochester,
and the number of licenses available. Right? So if you think of, if you think of what's right just sort of what's right to issue these as well as what makes sense for private enterprise, The state, first of all, they will not grant 150 licenses this year. It would be irresponsible to do that, for many reasons. It would be too much for the state to take on, especially for the, way that it's rolled out to date. And, most importantly, not having confidence in what the supply chain is going to be able to allow
or support in terms of a number of points of distribution in retail. So we believe that the state will issue somewhere around 50% at the most of those licenses. So let's say that that's 75. 70 five licenses for the entire state need to go to where people are. So most of those licenses will be taken up with large population centers of the Twin Cities, Rochester, Duluth, Saint Cloud, as well as then supporting, very importantly border communities to Wisconsin,
border communities to the Dakotas, and then filling in areas, so that it allows equal, you know, as equal opportunity as as you can in rural markets that people aren't driving more than an hour to a dispensary. So does the city approve these, licenses? Does the city approve them? Does it The city If someone else besides us wants to get into the market. The city did opt to maintain control of one license. The City of Rochester is maintaining control of, I believe, eight licenses total. And the rest that we're allotted to by population to the county are falling under
the county jurisdiction. And I think there's a total of 13 in Olmsted County. It's 13 or 14. So if we proceed with this, can we still be the would we be the only supplier in Byron? Can we get that to You cannot eliminate the possibility of a private dispensary in Byron because we do have one license. So there could be theoretically two, the municipal and a private. Realistically, it's probably not the case. I don't think our market is that large. And I think the numbers would show you that there is not a large enough
market in Byron for two dispensaries. Right. So if we're first to market with it, someone coming in would probably run those numbers and say, could it accommodate two and probably Okay. But these are also assuming that Cassin wouldn't know Yes, you got Cassin, Dobson or I'm just saying, right? We're just assuming because it said all the way to Owatonna and then all the way to Austin. And at this point, Cassin is waiting for the private market. Stewartville is waiting on private market. I have not gone smaller than that in my review,
but they're kind of sitting back with a wait and see. I will tell you, I reached out to both because I thought that would make a very obvious JPA network. And they have very limited interest in anything to do with that from a municipal standpoint. So the JPA, you've got three, let's say, Buffalo, Autonomy, and you're pretty confident that you're going to get a fourth one? I believe that they're out there. But at this point, I can't tell you that because I don't have anybody I've talked with. There is a lot of interest and a lot of openness to that conversation from
those two. That's the only reason I mentioned them. If I could go ahead. If I could just add a couple couple points to that is, there was a a Star Tribune article published on on January 31, that speaks to, it parallels it it basically speaks to this unique municipality approach, and they they reference, quote, unquote, dozens of cities actively pursuing licenses. We, Delaney Consulting, have we've had conversations with upwards of fifteen,
twenty unique cities. Not all of which are in the same place as Byron. Right? You gotta cut that number in about half to where Byron is. But we don't have line of sight to all cities in the state, but we will. And so will Byron in a short period of time because the the licensing process is public and transparent. So once licenses are, applied and approved, we will have a list of cities that have done that, and we'll be able to pull in all the cities that have,
that that could consider this model at that point. And we believe that that's May, June. And that's what the state has said. That that's May, June that that that information should become available. In every conversation that we've had, this JPA approach, has been almost a no brainer for every city that we've had. When you just look at the dollars, the capacity of cities, cities, skill sets and experiences, aligning towards governance and city policy relative to business enterprises, this just becomes such a more attractive and comfortable way to derisk to derisk it.
I'm gonna lift the question, if you don't mind. The start up cost, obviously, that's a big dollars. If you're talking existing building we've got remodeled, but you're not on the highway, now you've got one on the highway, you're going to double your cost for start up. So when do how do we make that decision of invest 2,500,000 three million dollars on the highway or in one point whatever for what we got. How much is that going to impact the traffic, the walk in traffic? I think that could be big. I agree. Well, we just started that conversation about ten days ago with Michael,
looking at the highway. They do agree with you that, that would be significant increase having the visibility, very, very preliminary, just a square foot cost. What would it take if I'm going to build apples to apples, 2,500 square feet? It is not significantly different. It would not change our start up cost enough to where I would change our pro form a, which surprises me. I would definitely say we want more exposure. If we want more exposure at a very, very nominal price difference,
and again, that's just back in Napkin Square footage costs. I have reached out to try and put some harder numbers together for just blanket what would a 2,500 or 4,000 square foot building cost on a square footage basis. Does not include land cost. It's just development cost. But I'm going to tell you, at this point, it doesn't look like it's a big enough change to change your mind. At this point, it's do you want the license or not? That's your immediate crisis,
if you will. Do we pursue the license, which has to start quite honestly this afternoon because we only have until March 13 or '14 to complete that. Then you have time. You're not going to open it up right away. We do have time to work through some of those numbers. If you don't like the numbers, don't open it up. You have the license in hand. That buys you time to make a better decision. But I'm not going to back you into a corner and say because we have a license, we have to open up a dispensary. We have to finish our due diligence and make sure that it's still right for
Byron. The other thing that we have not done is a great deal of, public outreach. I think that there is we haven't been secret about it. But we haven't been proactive either. And I think that there's some reaching out to the community to say, hey, is this in the community's best interest? Does this match who our residents think Byron represents? And I'm not going to vote on that one way or the other. I'm just going to tell you I think that there is a need to make sure that they're also with us on this. So for this early stage, you would like the EDA to approve the pursuant of the license,
right? Is that kind of where we're at? That's what we're looking for today is, with the feasibility study, are you okay with us pursuing the license? And that is a today decision because next month when you meet, it will be too late unless you want to have a special meeting. I don't want to close the door on your options. I don't think it's necessary unless you feel like you need more time to make that determination. But at the end of the day, it's a $5,000 discussion on top of what we've already spent. I want to be clear, I'm not ignoring the fact that we've made a pretty sizable investment to this point,
but it is a $5,000 decision today. I think it's inevitable. It's coming regardless. So I mean, I hate to say that the community really isn't going to have a say, but they're they will, but it's inevitably coming one way or another. So why not, like we talked about, have a little control over that and whatnot. So We did for the sake of the feasibility study and as we move forward, and this is important in your decision making as well, we felt it important to identify a revenue statement. Where do the proceeds go?
Obviously, the start up costs are going to eat up any revenues in the first couple of years. That's your breakeven point. Depending on how you look at it, you're three to five years breakeven. Where do we put the money after that? Because there is a revenue stream, and we identified capital projects. It's a generic statement, but it's very important because building out this facility is a capital project. Thereafter, that money would offset our need for property tax as much reliance on property taxes for capital projects. It might be parks,
it might be streets, it could be facilities. However you look at it, those are capital projects. In our books, they're all identified as such. So I think that while that's a blanket statement, it's a little bit vague. It really is a direct property tax offset because right now, that is our only real funding mechanism for capital projects. Yes, too many yes, capital is where it needs to go because if it does go to zero or negative, you got capital, you're not worrying about the overall expense. If people throw it into their operating budget,
that's where they get into big trouble. Yes. Right. So So I think great idea to keep it in the capital. And if it's there, we can use it, wonderful. But it's something we don't have to rely on. Correct. Right. And if these are if this is like ultraconservative numbers, I mean, we're still in the positive, which is great, so it could be better. And then I don't you know, as Michael mentioned, probably will have no problem being able to put together a JPA, you know, once the cities are identified and they look at the value. So One of the biggest items in here is we insisted on debt service for this.
We did not use debt service for all of the product because I don't know that I can borrow money for inventory, for example. I'm not sure that they would let us do that under tax exempt or municipal debt service. But we are showing about $100,000 a year in debt service. And if we are determining that we want to use cash or reserves as opposed to debt service, right off the top, there's some portion or all of $100,000 of debt service that goes away. That's significant. But again, being conservative, we said we're going to assume debt service until we figure out differently.
And so back to the conservative discussion, it is admittedly conservative. So do we have correspondence ready if we apply for the license because it's going to hit the paper or somewhere along the line that this Byron has applied for the for a license for this. Are we prepared to answer the questions yet? Why are we doing it? Well, and that's why I'm giving you those soundbites because we do have a media interview this well, later this morning actually because they saw it on our agenda today.
The answer is this is an opportunity to defer our reliance on property taxes. We have to somehow diversify our revenue streams for the city. We're almost 90% reliant on property tax. This is just an opportunity to lower that reliance. Perfect. I'm good with that. Makes perfect sense. Do we know what happens? Let's say we get the license, we have control, but then we're not going to go forward with the dispensary. Is that a license we can sell? Or does it go back to the state? That I think it goes back to the state. I mean, it is not ours to sell,
Michael. That is correct. Yep. Is there an expiration? I mean, is it, like, good for a year? Is it It's an annual. Okay. But I'm saying if we didn't go forward after one year, it's we would just not pay for it again and Correct. Got it. Quick question. And this might be for a later date. But if we go forward, we build the building, we open it, and after five years, we think we bid off too much that we could choose. Is there an opportunity to sell it to private investment? Michael, yes. Michael is saying adamantly yes. Okay. Good. Good. Yes. I think this is undoubtedly a smart and informing group.
You're getting to some of these points very quickly, and with ease. Yes. So if you think about, something that's gonna happen, and we we predict within four to five years that, cannabis will be rescheduled, from, category one to category three controlled substance. That triggers federalization and opens up a significant amount of other things that are gonna happen. One of the things that's gonna happen is you're gonna have outside competitors and pressure put into the system. There's benefits to this. Don't get me wrong as well.
But, that will then create, consolidation. Consolidation at that point for Byron, the best maybe. Right? It might be that your, your best decision at that point is to sell. And whether it's it's that dispensary, but even going back to the decision of building out versus building new, investing a million dollars plus into an existing asset that you likely probably couldn't recoup, or would be as attractive in that scenario versus building new and having an additional asset just leans,
like, a little bit towards having, that approach, versus using your existing facility. Those licenses opened up in the next couple days, whatever. Is there a close date for that? Is that wide open from there? The fourteenth, I thought. No. It is very tight. It opens today. It opened this morning. They published all materials last Friday, and it closes hard date on, at the end of business on March 14. But we would know by then if we're the only ones who Well, we've I want to caution you. I think we're a MayJune, according to Michael, determination. So maybe we get a hint of something earlier,
but I'm going to tell you the May, first part of June to set your expectations on that time frame. Okay. Which is okay because I think we still have work to do, if we are serious about this. But that takes a little bit of the crisis off our backs, and we can move at it more Our own pace. Yes. Yes. A little more relaxed pace. At this point, really your decision is do we apply for the license? It's $2,500 check that we write upfront. Again, I want to remind you, it's another $2,500
to get the license once it's awarded. You need an approval or just a I need an approval because we're spending your money. Yes. Well, any concerns, like, from anybody? I don't at all. Yes. I don't see the risk, so I can make the motion to, make the application to the state for the license. Second. All in favor? Aye. Any opposed? Wonderful. You have your approval. Thank you very much. Michael, did you have anything else you wanted to add? No. Not at all. I'm excited, to for Byron to continue to explore this opportunity. We we feel very strongly about it,
how the numbers came out. And and it's beyond this, this is a really unique opportunity for the state of Minnesota that you're participating in because no other, state has approached, cannabis in this manner. This is the first time that a state has, afforded this opportunity for municipalities. So I don't wanna put undo, you know, wait anywhere, but there's, there's implications to the additional states that are going to, you know, at some point pass recreational marijuana and cannabis, and and it could be a future opportunity for states to make different decisions as
well. Awesome. Well, thank you for your So I wanna thank you. I don't I don't know. Do you need anything more from me? Any other questions? No. No. We'll follow-up here later this week. Great. Al, I'm gonna send you and Kelly a a really good press release from Grand Rapids. They're also actively exploring it, and it's, it was from from a week ago today, but you mentioned your press interview today. I think there's just there's a lot of parallel comments that this group, had that's reflected in this article. It's a really good read. So thank you. I wanna, thank, the City of Byron for the engagement and partnership. Really enjoyable working,
really confident on the work we set forward. And Al and Kelly, follow-up as needed, on any next steps. Great. Thanks, Michael. Thanks. Thank you. Thank you. Thanks. Yeah. Any of those that correspondents from, like you just said, from others that we can use for that communication will be great. Even their feedback and stuff that they're getting from their citizens too, good or bad. I suppose that probably just helps us kind of proactively think of what the responses might be and be ready for them. It's probably a good idea. I'll try and keep feeding you and Kelly and I will keep sending those out
there. So look for that information as we get it. Yes. Perfect. Okay. No new business. Public comments? Good morning, Greta. Public comments. Okay. Anything else? K. Motion to adjourn? So moved. Second? Second. All in favor? Aye. Alright. Adios. Good job, crew. Kelly, besides the restaurant, any other new little businesses popping in town? That's it.