Minnesota is the latest state to pass a cannabis legalization bill. Last week, Governor Tim Walz signed into law HB400, which legalizes the purchase, possession and use of recreational cannabis for adults aged 21 and over. This groundbreaking legislation also opens up new job opportunities in the cannabis industry, as well as providing tax revenue for the state.
The bill also outlines an extensive regulatory framework including laws on how businesses in the industry will be licensed, and how taxes will be collected from product sales. The regulation of growing operations is also included in the bill. All products must meet safety standards set by the Minnesota Department of Health before they can be sold publicly.
Overall, HB400 has been met with praise from many Minnesotans who have sought marijuana legalization for years. It’s a major step forward for advocates and marks a shift in attitudes towards cannabis nationwide. With the influx of jobs and tax revenue, it’s easy to see why this bill is seen as a positive for the state. As more states pass similar legislation, we can expect to see even more progress in the cannabis industry going forward.
In Minnesota, businesses in the cannabis industry will be required to obtain a certain type of license in order to operate legally. There are four main types of licenses: cultivation, processing, manufacturer and retail. Cultivation licenses allow for growers to produce marijuana plants that can then be sold to other licensed businesses like processors or manufacturers. Processing licenses permit businesses to obtain and process marijuana in preparation for sale. Manufacturers are able to convert cannabis into consumable products such as edibles or oils. Lastly, there are retail licenses that give businesses the ability to sell cannabis products directly to consumers.
Each type of license has its own set of requirements and restrictions, including payment of application fees and background checks on owners and employees. Furthermore, license holders must adhere to all state regulations related to their business activities, such as labeling requirements and product safety standards. All license holders must also keep accurate records of their transactions with customers and other license holders in the industry.
Minnesota Cannabis Licenses Types of establishment licenses
The Minnesota cannabis legalization bill establishes 10 types of licenses, namely:
- Cannabis cultivator
- Craft cultivator
- Bulk cultivator
- Cannabis manufacturer
- Cannabis retailer
- Cannabis wholesaler
- Cannabis transporter
- Cannabis testing facility
- Cannabis microbusiness
- Cannabis event organizer
- Cannabis delivery service
- Medical cannabis business
The aforementioned licenses can’t be transferred and must be renewed annually.
How to apply for a license
As of now, there’s scarce information regarding the licensing process in Minnesota, however, according to the proposed legislation, the Cannabis Management Board has to establish forms and procedures for the processing of licenses and, at minimum any application has to include the following information if applicable:
- The name, address, and date of birth of the applicant
- The disclosure of ownership and control required by law
- Disclosure of whether the applicant or, if the applicant is a business, of whether any officer, director, manager, and general partner of the business has ever filed for bankruptcy
- The address and legal property description of the business
- Documentation showing legal possession of the premises where the business will operate
- A diagram of the premises, including a security drawing
- A copy of the security plan
- Proof of trade name registration
- A copy of the applicant’s business plan showing the expected size of the business; anticipated growth; methods of record keeping; knowledge and experience of the applicant and any officer, director, manager, and general partner of the business; environmental plan; and other relevant financial and operational components
- An attestation signed by a bona fide labor organization stating that the applicant has entered into a labor peace agreement
- Certification that the applicant will comply with the requirements of the proposed legislation relating to the ownership and operation of a cannabis business
- Identification of one or more controlling persons or managerial employees as agents who shall be responsible for dealing with the board on all matters
- A statement that the applicant agrees to respond to the board’s supplemental requests for information
Additionally, according to the Minnesota cannabis legalization initiative, the applicant may include in its application:
- Proof that the applicant is a social equity applicant
- A diversity plan that establishes a goal of diversity in ownership, management, employment, and contracting
- A description of the training and education that will be provided to any employee
- A copy of business policies governing operations to ensure compliance with the law
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Disclosure of ownership and control
Further, according to the Minnesota cannabis legalization bill, an applicant has to file and update a disclosure of ownership and control, which should include, at a minimum, the following:
- The management structure, ownership and control of the applicant or license holder, including the name of each cooperative member, officer, director, manager, general partner or business entity; the office or position held by each person; each person’s percentage ownership interest, if any; and, if the business has a parent company, the name of each owner, board member, and officer of the parent company and the owner’s, board member’s, or officer’s percentage ownership interest in the parent company and the cannabis business
- A statement from the applicant and, if the applicant is a business, from every officer, director, manager, and general partner of the business, indicating whether that person has previously held, or currently holds, an ownership interest in a cannabis business in Minnesota, any other state or territory of the United States, or any other country
- If the applicant is a corporation copies of its articles of incorporation and bylaws and any amendments to its articles of incorporation or bylaws
- Copies of any partnership agreement, operating agreement, or shareholder agreement
- Copies of any promissory notes, security instruments, or other similar agreements
- Explanation detailing the funding sources to be used to finance the business
- A list of operating and investment accounts for the business, including any applicable financial institution and account number
- A list of each outstanding loan and financial obligation obtained for use in the business, including the loan amount, loan terms, and name and address of the creditor
Minnesota Cannabis Licenses Application process
The applicant must submit all required information to the board on the forms and manners prescribed by the board. If the application fails to provide the required information, the board will issue a deficiency notice to the applicant, after which the applicant will have ten business days from the date of the deficiency notice to submit the required information.
Failure to submit the required information will result in the application being rejected.
According to the Minnesota cannabis legalization initiative, upon receipt of a completed application and fee, the board shall forward a copy of the application to the local unit of government in which the business operates or intends to operate with a form for certification as to whether a proposed cannabis business complies with local zoning ordinances and, if applicable, whether the proposed business complies with the state fire code and building code.
Within 90 days of receiving a completed application, the board shall issue the appropriate license or send a notice of rejection setting forth the specific reasons why the board did not approve the application.
License selection criteria
The board will issue the necessary number of licenses in order to assure sufficient supply of cannabis and cannabis products to meet demand, provide market stability and limit the sale of unregulated cannabis.
The board will prioritize the issuance of microbusiness licenses with an endorsement to cultivate cannabis and craft cultivator licenses.
Unless the board determines that issuance of bulk cultivator licenses are necessary to assure a sufficient supply of cannabis and cannabis products, the board shall not issue a bulk cultivator license before July 1, 2026.
Lastly, the board shall award points to each completed application in the following categories:
- Status as a social equity applicant
- Status as a veteran applicant
- Security and record keeping
- Employee training plan
- Business plan and financial situation
- Diversity plan
- Labor and employment practices
- Knowledge and experience
- Environmental plan
You should always contact a professional in order to write your business plan. Remember the business plan is not a normal one, but instead must demonstrate regulatory compliance. These are key documents that require a lot of attention to detail in order to pull them off correctly.
General information about the Minnesota cannabis legalization initiative
- Social equity: YES
- Expungement procedures: YES
- Legal possession: Up to 2 ounces
- Home grow: Up to 4 plants.
- License cap: No cap established.
Cannabis laws in Minnesota are well-crafted to ensure the safety of citizens while allowing a burgeoning industry to flourish. By providing social equity and expungement procedures, they address criminal justice concerns while also making it possible for veterans and other marginalized groups to access this new market. The possession limits and home grow provisions further ensure that regulations are appropriately tailored to the state’s needs. Overall, Minnesota boasts a comprehensive cannabis legal framework that allows responsible adults to access the plant safely and within legal limits.