FAIRMONT– On Monday the Fairmont City Council was presented the findings from a feasibility study for a municipal cannabis retail store.

Over a year ago, in March of 2025, the council had directed staff to go out for a Request for Proposal (RFP) for a consultant to conduct a feasibility study and ultimately 19 RFPs were received. A committee narrowed it down to three finalists before Vicente was selected by the council in January of this year to conduct the study.

Andrew Livingston from Vicente virtually shared results of the study with the council on Monday.

He first explained that in conducting the study they focused on Minnesota market growth and trends, customers and competition and projected sales and operational costs, as well as capital expenditures.

In focusing on the local community, Livingston said they looked at a 30 mile radius buffer around Fairmont and a 60 mile radius buffer outside of the border, including areas of Iowa.

“They don’t have any access in their area,” Livingston said. “Essentially going to Minnesota is how they’re going to get it so we put a larger adjustable market there.”

He further said that their estimates show that the total number of cannabis users in the area is 4,500 within the 30 mile radius around Fairmont and 60 miles radius outside Minnesota, with a little more than one-third being border consumers. However Livingston said those numbers could start to drop off around 2030 if and when Iowa puts adult cannabis use into law.

Looking at competition stores, Livingston acknowledged a new micro business store opening in Martin County which he said shouldn’t be ignored but he also implied that it shouldn’t be a big concern, given its size.

“On route 90 is a great area but there isn’t so far a cluster of stores within your 30 mile, or even 60 mile… by and large Fairmont will most likely be the largest hub within your multi-county area… but there will be some others scattered around,” Livingston said.

Looking at projected sales and operating costs, assuming the store opens in 2027, Livingston said they’re projecting $2.4 million annually at the Fairmont store. However, he said it’s not a perfect curve due to how the competition overlays with the price declines and changes with the state market at large. Therefore it will probably slow down to $2 million in sales.

“The majority of your costs are going to be in your wholesale product costs… and then labor and utility expenses,” Livingston said.

He said with this model there wouldn’t be a large amount of staff, likely six, including a director of sales, assistant manager, security guard and sales reps.

Livingston also touched on two proposed retail locations, with one being just north of the liquor store.

For the other location, the “south lot,” he said it was preferred but undeveloped so there would be costs for site work which he said would be a significant amount.

“It’s about $700,000 in that site work cost,” Livingston said.

However, for the lot north of the liquor store, he said the cost of the lot would be a bit more and that there would be about a $100,000 difference between the two.

Ultimately for the retail store capital expenditure he said it would be just under $2 million including site work and engineering, roadway and sewer construction, design furnishings, point of sale equipment and employee storage areas.

“When it comes to longevity, once competition comes into place, the municipality will be able to outlast the small cannabis retailers… and the model projects over $1.9 million in positive cash flow by the end of 2035,” Livingston said.

Council Member James Kotewa asked how much money the city would make annually after all capital expenditures are paid.

Livingston said the city would make about half a million dollars a year. Kotewa then asked if that was a conservative estimate and Livingston said there was possibility for less to be made depending on future competition but that it was hard to determine.

Council Member Randy Lubenow asked what would be unique about the store and what it could be used for in the event that a cannabis retail store doesn’t work out long-term. Livingston said it would be a pretty standard 5,000 sq. ft. retail store that could be used for a variety of other purposes.

He also said that the council could determine whether there were any existing buildings in the city that could be used for the store.

A memo from the Finance Director, Paul Hoye, lays out how the revenue from the store could be used on a street improvement funding strategy by transitioning from bonding and special assessments to a self-funded street improvement program.

The memo also lists the benefits as reducing debt, lowering long-term costs, more options for future property tax reductions or increased funding for street improvements.

Hoye told the council that more information could be gathered it it desired.