serverless: Environment variable in serverless.yml throws "Cannot resolve ..." error

service: <redacted>
unresolvedVariablesNotificationMode: error
useDotenv: true
variablesResolutionMode: 20210326

provider:
  name: aws
  region: ${env:AWS_LAMBDA_REGION} 
  stage: ${env:AWS_STAGE}
  runtime: nodejs14.x
  lambdaHashingVersion: 20201221
  memorySize: 512
  timeout: 6
  profile: <redacted>
  
  httpApi:
    cors:
      allowedOrigins:
        - "*"
      allowedHeaders:
        - "*"
      allowedMethods:
        - GET
        - PUT 
        - POST 
        - DELETE
        - OPTIONS
      #allowCredentials: true
      exposedResponseHeaders:
        - "*"
      maxAge: 6000 # In seconds

  websocketsApiRouteSelectionExpression: $request.body.action

  iamRoleStatements:
    - Effect: 'Allow'
      Action:
        - dynamodb:PutItem 
        - dynamodb:BatchWriteItem
        - dynamodb:PartiQLInsert
        - dynamodb:PartiQLUpdate
        - dynamodb:PartiQLSelect
      Resource: 'arn:aws:dynamodb:ca-central-1:<redacted>:table/<redacted>-${env:AWS_STAGE}'
    - Effect: Allow
      Action:
        - "execute-api:ManageConnections"
      Resource:
        - "arn:aws:execute-api:*:*:**/@connections/*"


functions:
  # Read all users
  readUsers:
    handler: Handler.readUsers
    events:
      - httpApi:
          method: GET
          path: /users
          
  # Read individual user
  readUser:
    handler: Handler.readUser
    events:
      - httpApi:
          method: GET
          path: /users/{userId}

  # Exchange a Google issued JWT for a <redacted> JWT
  exchangeJWT:
    handler: Handler.exchangeJWT
    events:
      - httpApi:
          method: GET
          path: /users/jwt


  # Handle WebSocket (dis)connections
  connect:
    handler: Handler.connect
    events:
      - websocket:
          route: $connect
      - websocket:
          route: $disconnect

  # Close a class
  closeClass:
    handler: Handler.closeClass
    events:
      - websocket:
          route: closeClass

plugins:
  - serverless-offline
  - serverless-dotenv-plugin

package:
  include:
    - ../<redacted>.pem

 
 Serverless Error ----------------------------------------
 
  Cannot resolve serverless.yml: "provider.stage" property is not accessible (configured behind variables which cannot be resolved at this stage)
 
  Get Support --------------------------------------------
     Docs:          docs.serverless.com
     Bugs:          github.com/serverless/serverless/issues
     Issues:        forum.serverless.com
 
  Your Environment Information ---------------------------
     Operating System:          linux
     Node Version:              14.15.4
     Framework Version:         2.52.0 (local)
     Plugin Version:            5.4.3
     SDK Version:               4.2.3
     Components Version:        3.13.4