The Minnesota Department of Employment and Economic Development (DEED) will do its own due diligence before approving a loan to the company behind a potential $67.8 million cannabis growing operation in Grand Rapids.

Missouri cannabis entrepreneur Jack Mitchell and business partner John Hyduke are pitching the project under the HWY35 entity.

However, many steps remain before the operation gets a green light from the state, as MinnPost first reported this week.

HWY35 will need to obtain a license under the new cannabis laws, for one.

The process, which would be through the state's new Office of Cannabis Management, could take well into next year or early 2025 as the agency is set up.

"The IRRR Board vote is an early step in the financing process," a statement from DEED said. "After IRRR's preliminary approval and board vote, DEED will conduct its own due diligence and validate documentation for the approved project before potentially dispersing from the 21st Century Fund."

The vision calls for redeveloping a long-shuttered timber mill in Grand Rapids, and the Iron Range Resources and Rehabilitation Board OK'd terms of a $10 million loan earlier this week for the project that would create about 400 jobs. The project outline calls for another $10 million from DEED.

Nearly $46 million toward the project will come from private equity sources.

"Substantially all is going to come from Minnesota. So these are Minnesota investors, investing in a Minnesota company," Mitchell said Thursday. "So the goal was to combine some experienced operation with a local business here. And my partner is from the Iron Range."

The plans also call for $2 million in tax increment financing from Grand Rapids.

The project will include an indoor cultivation site and a manufacturing center that would produce high-quality cannabis oils to be used in infused projects, according to the IRRRB overview.

HWY35 said collateral on the loan would be all the furniture, fixtures and equipment. Mitchell also pledged a personal guarantee.

The project is contingent on the developer securing the necessary permits and licenses as well as getting the project fully funded.

Regional leaders heralded the project, which would be one of Minnesota's largest cannabis-related investments announced since legalization this summer.

But Leili Fatehi, partner and principal at the strategic cannabis consulting firm Blunt Strategies, worries about the amount of public funding on the table.

"It's wonderful to see that an economic development agency is taking an interest in investing in cannabis as a way to diversify its economy and bring jobs and opportunities," she said.

But she said the amount of public dollars that could be pledged for the project would be in excess of what the state has set aside for giving to any other cannabis businesses.

"We're talking about enormous sums of money," she said.