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Minnesota Cannabis Laws 2024

minnesota cannabis lawsAre you an entrepreneur in Minnesota looking to enter the cannabis industry? On August 1, 2023, Minnesota will join the ranks of states that have legalized recreational marijuana. The HF 100 Legislation will create a new program for all cannabis products. A new office of cannabis management will write the rules for the new law. For entrepreneurs looking to start or operate a cannabis business in Minnesota, it’s crucial to understand the new laws and regulations.

If you’re ready to seize this exciting opportunity in Minnesota’s emerging cannabis industry, keep reading for valuable insights and expert advice.Understanding the state’s cannabis laws and regulations is crucial for success. In this comprehensive guide, we’ll walk you through the ins and outs of Minnesota’s cannabis laws, including licensing requirements and important considerations for operating a cannabis business. With our expert insights, you’ll be well-equipped to navigate the legal landscape and seize opportunities in this rapidly growing industry. Let’s dive in!

Understanding Minnesota Cannabis Laws

Did you know that in Minnesota, individuals aged 21 or older can possess up to two ounces of cannabis flower in public and cultivate up to eight plants for personal use?

The Office of Cannabis Management is responsible for regulating the production and sale of cannabis products, including lower-potency hemp edibles. They have the authority to enter into agreements with the Department of Agriculture to ensure food safety standards are met.

The Cannabis Advisory Council consists of individuals with experience in subjects related to cannabis legalization. They review national policies, evaluate state policies, and gather public testimony on developments in cannabis information.

For personal adult use, individuals aged 21 or older can possess up to two ounces of cannabis flower in public and cultivate up to eight plants. There are restrictions on smoking in certain areas and prohibitions against giving cannabis products to minors or using them while operating a vehicle.

Various licenses are available for different types of businesses, such as microbusinesses, cultivators, retailers, testing facilities, and delivery services. Local units of government cannot prohibit possession or transportation but can establish reasonable restrictions on operations.

Office of Cannabis Management

Licensing and Permit Requirements: To operate a cannabis business in Minnesota, entrepreneurs must obtain the appropriate license from the Office of Cannabis Management. Different categories of licenses are available, including cannabis microbusiness, cannabis retailer, and cannabis delivery service. Application fees, initial license fees, and renewal fees apply.

Compliance and Regulatory Oversight: The Office of Cannabis Management ensures compliance with regulations regarding the production and sale of cannabis products. License holders must adhere to laws surrounding possession limits for adults (up to two ounces in public), transportation restrictions (eight grams or less of concentrate), and proper labeling requirements for edible products containing up to 800mg THC, or other dosage limits – for example 50mg.

Enforcement Policies: Violations related to cannabis use or distribution can result in civil penalties rather than criminal charges. Prohibited activities include giving cannabis products to individuals under 21 years old, operating a vehicle while under the influence of cannabis, smoking in areas where it is prohibited by law (Clean Indoor Air Act), promoting gifts involving cannabis flower or products, extracting concentrates using volatile solvents without a license or selling/importing hemp-derived goods without authorization.

Cannabis Advisory Council

The council consists of experts who will review national cannabis policies, evaluate the effectiveness of state cannabis regulations, and stay updated on developments in the field. They are also responsible for gathering public testimony and providing recommendations to the Office of Cannabis Management.

Membership Composition: The advisory council is comprised of individuals with diverse experience and expertise related to cannabis legalization. Members are prohibited from working as lobbyists while on the council or for two years after leaving.

Recommendations to the Office of Cannabis Management: The advisory council advises the office by offering insights on cannabis policy, reviewing new information about cannabis, and making recommendations based on their findings. Their goal is to ensure that Minnesota’s approach to regulating adult use of cannabis remains effective and aligned with best practices in other states.

Minnesota Cannabis Licensing 2024 Update

The State of Minnesota is offering a variety of cannabis licenses in its first round of adult-use cannabis licensing for 2024. The license types available include Cultivation, Manufacturing, Microbusiness, Mezzo-business, and Testing Facility, with application fees ranging from $500 for a Microbusiness to $10,000 for Cultivation and Manufacturing licenses. Specifically, a Microbusiness license covers one dispensary and up to 5,000 square feet of cultivation, while a Mezzo-business license includes three dispensaries and up to 15,000 square feet of cultivation.

The number of licenses available in this first round is limited: 13 for Cultivation, 6 for Manufacturing, 100 for Microbusinesses, 25 for Mezzo-businesses, and 50 for Testing Facilities. The allocation of these licenses will be determined through a random lottery system, and all licenses are reserved for social equity applicants. In total, 194 licenses are available, but the specific geographic allocation within the state has not yet been released as of May 3, 2024.

Currently, Minnesota has 2 licensed and operational dispensaries and 2 licensed and operational cultivation or processing facilities. If all the newly issued dispensary licenses become operational, there will be approximately one dispensary for every 32,700 residents in the state.

To qualify as a social equity applicant, individuals must meet at least one of the following criteria:

  1. Convicted of a cannabis or marijuana-related offense before May 1, 2023.
  2. Have a parent, guardian, child, spouse, or dependent who was convicted of such an offense before May 1, 2023.
  3. Be a dependent of someone convicted of such an offense before May 1, 2023.
  4. Be a military veteran, including those who lost honorable status due to cannabis or marijuana-related offenses, or a current/former member of the national guard.
  5. Have been a resident for the last five years of one or more areas that experienced disproportionately high cannabis enforcement, as identified by a state study.
  6. Be an emerging farmer, as defined by Minnesota statutes.
  7. Have been a resident for the last five years of census tracts where either the poverty rate was 20% or more, or the median family income did not exceed 80% of the statewide median family income, or the greater of 80% of the median family income for the area.

Social equity ownership must be maintained for at least three years after a business receives its operating license. During this period, the 65% ownership stake required for social equity can only be transferred to other verified social equity persons. Real estate acquisition is not required at the time of application but must be secured during the 18-month conditional license phase. Local governments may enforce buffer zones around schools, daycares, residential treatment facilities, and attractions within public parks frequented by minors. Local opt-outs are not allowed, but local governments can limit the number of cannabis retailers based on population ratios.

Ownership restrictions for the first round of licenses include that Mezzo-business and Microbusiness license holders can only own one such license and cannot have interests in other license types. Cultivation license holders may only own one Manufacturing license in addition to their Cultivation license, and vertical integration is strictly prohibited.

The application process requires full ownership disclosure, proof of social equity status for at least 65% of ownership, an organizational chart, foundational documents, financial obligation disclosures, and attestations of compliance with state laws. Although entering into labor peace agreements is mentioned, its implementation remains to be seen.

In summary, Minnesota’s first round of adult-use cannabis licensing is designed to prioritize social equity applicants, with a simplified application process to encourage participation. Out-of-state applicants are also explicitly allowed to apply, broadening the pool of potential licensees.

Personal Use of Cannabis

  • Legalization for adults over 21 years old;
  • Possession limits and home cultivation guidelines;
  • Consumption restrictions in public spaces;
  • Possess two ounces or less in public;
  • Possess 1.5 pounds or less of cannabis flower in a person’s residence;
  • possess or transport eight grams or less of adult-use cannabis concentrate;
  • possess or transport edible products infused with a total of 800 mg or less of tetrahydrocannabinol;
  • give away cannabis flower and products in an amount that is legal for a person to possess in public;
  • use cannabis flower and products in private areas; and
  • cultivate up to eight cannabis plants, of which four or fewer may be mature, flowering plants.

Adults aged 21 or older are legally allowed to use, possess, and transport cannabis paraphernalia. In public places, individuals can possess up to two ounces of cannabis flower and 800 mg or less of tetrahydrocannabinol-infused edible products. They can also cultivate up to eight cannabis plants, with a maximum of four mature flowering plants. However, smoking cannabis flower or products is prohibited in areas where smoking is not allowed under the Clean Indoor Air Act. It is important to note that giving cannabis to individuals under the age of 21 or using it while operating a motor vehicle is strictly forbidden.

Local Control: Local units of government cannot prohibit the possession or use of authorized cannabis products. They also cannot prevent the establishment of licensed cannabis businesses. However, they have the authority to impose reasonable restrictions on the time, place, and manner of operations with guidance from the Office of Cannabis Management.

Licensing and Regulations

Minnesota offers a range of license categories for cannabis businesses. These include cannabis microbusiness, mezzobusiness, cultivator, manufacturer for packages or beverages, retailer, wholesaler, transporter, testing facility, event organizer, delivery service, lower-potency hemp edible manufacturer, lower-potency hemp edible retailer, medical cannabis cultivator, medical cannabis processor, and medical cannabis retailer. Each license category has specific requirements and regulations that must be adhered to.

Minnesota Cannabis License categories are:

  • cannabis microbusiness;
  • cannabis mezzobusiness;
  • cannabis cultivator;
  • cannabis manufacturer;
  • cannabis retailer;
  • cannabis wholesaler;
  • cannabis transporter;
  • cannabis testing facility;
  • cannabis event organizer;
  • cannabis delivery service;
  • lower-potency hemp edible manufacturer;
  • lower-potency hemp edible retailer;
  • medical cannabis cultivator;
  • medical cannabis processor; and
  • medical cannabis retailer.

License Fees and Renewals

  • Annual license fees for cultivation: $X. Cultivators are required to pay an annual fee of $X for their cultivation licenses, which allows them to legally grow cannabis plants.
  • Renewal process for manufacturing licenses. Manufacturing licenses must be renewed annually, requiring license holders to submit renewal applications and pay the appropriate fees to continue operating their manufacturing businesses.
  • Additional fees for distribution licenses. Distribution license holders are subject to additional fees beyond the initial application and licensing fees, ensuring compliance with regulations and supporting oversight of the distribution process.

Transfers and Adjustments

Process for transferring ownership of a cannabis business:

  • Transferring licenses issued under this chapter is prohibited.
  • Petition to adjust the tier of a license within a category is allowed.
  • Annual renewal of licenses is required.

Change of location adjustments and requirements:

  • License holders can petition for relocation with an application fee limit of $250.
  • The Office of Cannabis Management has the authority to allow license holders to relocate.

Change in ownership provisions and procedures:

  • Transferring ownership or licenses issued under this chapter is not permitted.
  • Petitioning to adjust the tier within a license category is allowed.

Local Control

Overview of local municipality regulations on cannabis businesses:

Local municipalities in Minnesota have the authority to establish reasonable restrictions on the operations of cannabis businesses. While they cannot prohibit the possession, transportation, or use of cannabis authorized under state law, they can impose limitations on the time, place, and manner of operations. It is important for entrepreneurs looking to start a cannabis business to familiarize themselves with their local municipality’s regulations to ensure compliance.

Impact of zoning laws on opening a cannabis dispensary or cultivation site:

Zoning laws play a significant role in determining where cannabis dispensaries or cultivation sites can be established. Local municipalities may restrict these businesses from operating in certain areas such as residential zones or near schools and parks. Entrepreneurs should carefully consider zoning requirements and consult with local authorities before selecting a location for their cannabis business.

Requirements to obtain local permits or approvals:

Entrepreneurs must obtain local permits and approvals before starting a cannabis business in Minnesota. These requirements vary by municipality but typically involve submitting an application detailing plans for security measures, waste disposal, odor control, and community engagement efforts. It is essential for entrepreneurs to thoroughly research and understand the specific permit processes within their chosen locality.

Key Restrictions and Prohibitions

Prohibition of cannabis sales to individuals under the age of 21 ensures that only adults can legally purchase and consume cannabis products in Minnesota. This restriction helps to prioritize public health and prevent potential harm to young individuals who may be more susceptible to the negative effects of cannabis.

Restrictions on public consumption of cannabis ensure that it is not openly consumed in areas where it could negatively impact others or violate community norms. These regulations help maintain a respectful coexistence between those who choose to use cannabis and those who do not, promoting responsible consumption practices within designated private spaces.

Prohibited advertising practices for cannabis businesses aim to prevent the promotion or marketing of cannabis products in a way that appeals directly or indirectly to minors, as well as avoiding misleading claims about the benefits or effects of these products. By implementing strict advertising guidelines, Minnesota protects consumers from potential misinformation while maintaining transparency within the industry.

Opportunities for Entrepreneurs

Licensing and permits required to operate a cannabis business in Minnesota are essential for entrepreneurs seeking to enter the industry. Meeting these legal requirements is crucial for ensuring compliance and avoiding penalties. It is important to thoroughly research the specific licenses and permits needed, such as those related to cultivation, manufacturing, or retail operations.

The cannabis industry in Minnesota offers various market segments that entrepreneurs can explore. From cultivation of high-quality strains to manufacturing innovative products, there are ample opportunities for businesses to tap into niche markets within the legal framework. By identifying untapped areas of demand and strategically positioning themselves, entrepreneurs can carve out a unique space in this rapidly growing industry while adhering strictly to state regulations.

Moreover, innovation and differentiation play key roles in successfully navigating the cannabis market’s legal landscape. Entrepreneurs should actively seek out opportunities within Minnesota’s regulatory framework that allow them to stand out from competitors. This could involve developing new extraction methods or creating innovative delivery systems for consumers who prefer alternative consumption methods beyond traditional smoking.

Overall, understanding licensing requirements, exploring available market segments, and seizing opportunities for innovation will be vital steps on an entrepreneur’s journey toward success in Minnesota’s evolving cannabis industry.

Conclusion

In conclusion, Minnesota’s cannabis industry presents exciting opportunities for entrepreneurs looking to enter the market. With the establishment of the Office of Cannabis Management and the Cannabis Advisory Council, the state is dedicated to overseeing and regulating the production and sale of cannabis products. By understanding and complying with the licensing and permit requirements, entrepreneurs can ensure they operate within the legal framework and avoid penalties.

Entrepreneurs should take advantage of the various market segments within the industry, such as cultivation, manufacturing, and retail operations. By identifying niche markets and strategically positioning themselves, businesses can find success in this rapidly growing industry. Additionally, embracing innovation and differentiation will allow entrepreneurs to stand out from competitors and cater to the evolving needs of consumers.

It is important for entrepreneurs to stay informed about the ever-changing regulations and guidelines in the cannabis industry to maintain compliance and ensure the long-term success of their businesses. By following the guidelines set by the Office of Cannabis Management and the Cannabis Advisory Council, entrepreneurs can navigate the legal landscape and contribute to the growth of Minnesota’s cannabis industry.

About the Author

Tom Howard, a Cannabis Industry Lawyer and Consultant has practiced commercial law since 2008 when he graduated from law school and got his Series 7 & 66 Securities licenses. He pivoted to practicing litigation for financial institutions before helping cannabis teams form, capitalize, and get licensed. He has concentrated on the cannabis business since Illinois legalized it in 2019. He won licenses for clients in Illinois, Connecticut, New Jersey, New Mexico, Massachusetts, Missouri and has gotten into lotteries in Ohio, Maryland, and Maine. He became a Certified Ganjier in 2021. He chairs the ISBA’s section council for Cannabis Law in 2023.

Additional Resources & Websites that’ll help you get a cannabis license in Minnesota

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Thomas Howard

Licensed to practice since 2008, Thomas Howard has represented numerous financial institutions in litigation to enforce their security interests.
Homegrown Cannabis Co's Cannabis Seeds
Picture of Thomas Howard

Thomas Howard

Licensed to practice since 2008, Thomas Howard has represented numerous financial institutions in litigation to enforce their security interests.

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