As Minneapolis prepares to implement new cannabis zoning regulations ahead of the opening of non-tribal dispensaries next year, the legislation presents a combination of opportunities and challenges for local marijuana growers. While the rules are designed to establish clarity and support for cannabis businesses, they also impose certain limitations that could impact growers’ operations.
Supporting Local Businesses
One of the most notable aspects of the proposed regulations is the emphasis on supporting local cannabis businesses. By prioritizing social equity licenses aimed at individuals historically affected by cannabis prohibition, the city is creating pathways for small growers and entrepreneurs to thrive in a competitive market. Council Member Aurin Chowdhury has expressed a commitment to ensuring that local owners have access to dispensary licenses, aiming to shield them from larger, multi-state corporations that may dominate the industry.
This focus on local ownership can foster a sense of community and encourage economic growth within Minneapolis. Local growers who secure dispensary licenses will likely benefit from the ability to showcase their products and build relationships with their customer base.
Clear Guidelines for Operations
The new zoning regulations provide growers with clear operational guidelines, particularly regarding where cannabis businesses can be located and how they must operate. This clarity is beneficial, as it reduces uncertainty and helps growers navigate the legal landscape. For instance, the requirement for odor mitigation plans and compliance with noise standards ensures that all growers operate under the same conditions, leveling the playing field.
Challenges Ahead
Despite these positive elements, the regulations also present significant challenges for marijuana growers. The mandate for indoor-only cultivation means that outdoor commercial growing facilities, including greenhouses and hoop houses, are not permitted. This restriction may increase operational costs for many growers, as indoor cultivation typically requires more investment in infrastructure, such as advanced lighting and ventilation systems.
Additionally, the requirement for odor control and adherence to noise standards could lead to increased expenses for growers who must implement specialized equipment to comply with these regulations. Smaller growers with limited resources may find it particularly challenging to meet these operational costs while remaining competitive in the market.
Moreover, the prohibition on home-based retail sales restricts small growers’ ability to sell their products directly to consumers. While personal cultivation for individual use is allowed, the lack of options for retail sales may push small growers into costly commercial leases, making it more difficult for them to establish their businesses.
A Path Forward
Overall, the cannabis zoning regulations in Minneapolis represent a significant step forward for the local cannabis industry, particularly in promoting local ownership and providing clarity for operations. However, the challenges posed by the indoor-only growing requirement and the associated costs could hinder smaller growers from fully capitalizing on these opportunities.
As the city moves forward with these regulations, it will be essential to find a balance that supports local growers while maintaining community standards. Potential solutions could include providing resources or financial assistance to help smaller businesses comply with the regulations, ensuring that the local cannabis market remains vibrant and accessible.
A backlog in verifying social equity applications for retail recreational marijuana sales has created a delay in dispensaries opening throughout the state until potentially 2026.
Minnesota has made a significant shift in its approach to medical cannabis, empowering physicians to have the final say in recommending cannabis, thus rendering the state’s previously stringent list of qualifying medical conditions essentially obsolete.
As of July 1, 2024, this change allows for a more flexible approach, aligning with the growing acceptance of marijuana’s medical benefits.
“It just doesn’t fit anymore to have one of the nation’s most restrictive lists of qualifying conditions,” said state Sen. Lindsey Port (D), a key advocate of the legislation. “We want to ensure that if someone has a condition that cannabis can help with, their doctor can guide them to the right kind of cannabis. With the legal market open, there’s no reason to limit what doctors can prescribe because people will be able to access a variety of cannabis products.”
This new policy marks a pivotal moment in Minnesota’s cannabis legislation and could set a precedent for other states grappling with the medical versus recreational cannabis debate, as noted by the Star Tribune, which first reported the story.
Minnesota became the 23rd state to legalize recreational marijuana and home cultivation in May 2023.
Under the new law, Minnesotans will no longer need to undergo the cumbersome annual process to petition for the inclusion of new medical conditions. Any condition is now acceptable if a doctor recommends cannabis. However, petitions for new methods of consumption, such as gummies and smokeable forms, will still be considered.
The legislation also allows the cultivation of up to eight cannabis plants by individuals authorized by a doctor or those caring for medical marijuana patients.
Despite the approval for home cultivation, experience from other states suggests that few people might choose this route as recreational cannabis use and availability increase. However, Port emphasized the importance of maintaining a medical cannabis framework, particularly for minors who benefit from its therapeutic properties but cannot access recreational cannabis.
“If we’re not thoughtful about how we do it, the recreational market could overshadow the medical market,” Port said.
Minnesota’s medical cannabis program, which began in 2015, initially included only eight conditions. Over the years, this list expanded to 19, driven by mounting evidence of cannabis’s efficacy in treating diverse ailments such as intractable pain and PTSD. The program’s enrollment grew from 18,000 in 2019 to 48,000 participants, further boosted by the introduction of a recreational marketplace.
The process for general licenses will be announced soon. In the meantime, OCM recommends preparing your proposed business plan, security plan, and business capitalization table, as well as standard operating procedures for: quality assurance; inventory control, storage, and diversion prevention; and accounting and tax compliance. This will help you be ready when the application period for general licenses opens.
Available license types
These are general descriptions of license types. More details will be available in guidance materials.
Application fees, initial licensing fees, and renewal licensing fees are nonrefundable.
Note: License types labeled with an asterisk are available for license preapproval for social equity applicants who meet requirements.
Cannabis Microbusiness
Cost:
application fee $500
no initial license fee
renewal license fee $2,000
Cannabis microbusinesses can grow, make, sell, and buy cannabis (including plants and seedlings) and lower-potency hemp products. They can also have on-site lounges where customers can use cannabis. These businesses can grow up to 5,000 square feet of cannabis plants indoors and up to one-half acre outdoors. This license may hold a cannabis event organizer license.
Early cultivation opportunity: Social equity applicants with a preapproved cannabis microbusiness license and appropriate local approval may be allowed to grow cannabis plants under existing rules for medical cannabis cultivators and prior to adoption of adult-use rules.
Cannabis Mezzobusiness
Cost:
application fee $5,000
initial license fee $5,000
renewal license fee $10,000
Cannabis mezzobusinesses can grow, make, sell, and buy cannabis (including plants and seedlings) and lower-potency hemp products. Mezzobusinesses can grow up to 15,000 square feet of cannabis plants indoors and up to one acre outdoors. This license type is available in limited quantities, and licensees will be selected through a vetted lottery.
Early cultivation opportunity: Social equity applicants with a preapproved cannabis mezzobusiness license and appropriate local approval may be allowed to grow cannabis plants under existing rules for medical cannabis cultivators and prior to adoption of adult-use rules.
Cannabis Cultivator
Cost:
application fee $10,000
initial license fee $20,000
renewal license fee $30,000
Cannabis cultivators can grow cannabis plants from seed to maturity. They can grow up to 30,000 square feet of cannabis plants indoors and two acres outdoors. Cultivators are allowed to harvest, package, label, and transport fully grown cannabis plants to manufacturers. They can also package, label, and transport seedlings. This license type is available in limited quantities, and licensees will be selected through a vetted lottery.
Early cultivation opportunity : Social equity applicants with a preapproved cannabis cultivator license and appropriate local approval may be allowed to grow cannabis plants under existing rules for medical cannabis cultivators and prior to adoption of adult-use rules.
Cannabis Manufacturer
Cost:
application fee $10,000
initial license fee $10,000
renewal license fee $20,000
Cannabis manufacturers process raw cannabis plants into various products, such as edibles, concentrates, wax, oils, and tinctures. Manufacturers can buy cannabis flowers, cannabis products, and lower-potency hemp products from other cannabis businesses. They turn these materials into cannabis products, then package and sell them to other cannabis businesses. This license type is available in limited quantities, and licensees will be selected through a vetted lottery.
Cannabis Retailer
Cost:
application fee $2,500
initial license fee $2,500
renewal license fee $5,000
Cannabis retailers sell packaged cannabis products to the general public and medical patients. They can buy cannabis (including plants and seedlings) and lower-potency hemp products from other cannabis businesses and sell them to customers. This license type is available in limited quantities, and licensees will be selected through a vetted lottery. A cannabis retailer may operate up to five retail locations; however, no person, cooperative, or business may hold a license to own or operate more than one cannabis retail business in one city and three retail businesses in one county.
Cannabis Wholesaler
Cost:
application fee $5,000
initial license fee $5,000
renewal license fee $10,000
Cannabis wholesalers buy cannabis, cannabis products, and lower-potency hemp products from cannabis businesses and then sell them to other cannabis business.
Cannabis Transporter
Cost:
application fee $250
initial license fee $500
renewal license fee $1,000
Cannabis transporters are businesses that move cannabis, cannabis products, and lower-potency hemp products between businesses.
Cannabis Testing Facility
Cost:
application fee $5,000
initial license fee $5,000
renewal license fee $10,000
Cannabis testing facilities receive cannabis, cannabis products, and lower-potency hemp products from manufacturers and cultivators to test. They ensure these products meet safety standards.
Cannabis Event Organizer
Cost:
application fee $750
initial license fee $750
Cannabis event organizers plan and host events featuring cannabis, and may allow for the sale of cannabis, cannabis products, and lower-potency hemp products to consumers at events like festivals (an event cannot last more than four days). They can also provide spaces for consumers to use cannabis. An event organizer must receive local approval, including obtaining any necessary permits or licenses issued by a local unit of government.
Cannabis Delivery Service
Cost:
application fee $250
initial license fee $500
renewal license fee $1,000
A cannabis delivery service purchase cannabis and lower-potency hemp products from specific cannabis businesses and sell and deliver those products directly to consumers.
Lower-Potency Hemp Edible Manufacturer
Cost:
application fee $250
initial license fee $1,000
renewal license fee $1,000
Lower-potency hemp edible manufacturers produce edibles from hemp. These manufacturers can create, package, and label lower-potency hemp products, and sell them to cannabis businesses. This license type cannot hold any cannabis business licenses.
Lower-Potency Hemp Edible Retailer
Cost:
application fee $250 per retail location
initial license fee $250 per retail location
renewal license fee $250 per retail location
Lower-potency hemp edible retailers sell packaged lower-potency hemp edibles to consumers. This license type cannot hold any cannabis business licenses.
Medical Cannabis Combination Business
Cost:
application fee $10,000
initial license fee $20,000
renewal license fee $70,000
Medical cannabis combination businesses can grow, manufacture, package, label, and sell cannabis products (including cannabis plants and seedlings) to both medical patients and adult consumers. These businesses can package and sell medical cannabis products to other eligible cannabis businesses. They are allowed to cultivate up to 60,000 square feet of medical cannabis plant canopy for distribution into the medical market, and depending upon the total amount of medical sales the year prior, up to an additional 30,000 square feet of cannabis plant canopy for distribution into the adult-use market.
We have important updates about Minnesota’s Medical Cannabis Program.
On May 24, 2024, Governor Tim Walz signed a bill introducing several changes to cannabis legislation that may affect you as a participant in the Minnesota Medical Cannabis Program.
Starting July 1, 2024:
Veterans: Veterans can now use a separate application to enroll in the Medical Cannabis Program without needing certification from a registered healthcare provider. A unique form for self-certifying qualifying conditions will be available on the Medical Cannabis Program website. Veterans can then complete the standard patient enrollment application.
Recertification: Patients will now need to recertify their qualifying medical condition and complete an online enrollment application every three years, instead of annually. Applications approved on or after July 1 will follow this new three-year cycle. Approvals made before July 1 will not be retroactively extended.
Qualifying Conditions: The definition of a qualifying medical condition has been expanded to include any condition recommended, approved, or authorized by a healthcare practitioner.
Caregivers: Registered caregivers will no longer need to undergo a background check.
Administrative Changes: The Office of Medical Cannabis will become a division within the Office of Cannabis Management, effective July 1. This change will not impact your status in the medical cannabis program, and there will be no disruption in your ability to purchase medical cannabis.
For more information on the medical cannabis program and additional legislative changes, please visit our Medical Cannabis website.
If you have further questions, please call 651-201-5598 (toll-free at 844-879-3381) or email health.cannabis@state.mn.us.
The Minnesota House recently passed legislation that brings significant changes to the state’s cannabis laws, affecting both recreational and medicinal use. Among the key alterations is the introduction of a pre-approval process for businesses seeking to enter the cannabis market, alongside revisions to the licensing system.
This move aims to provide an early advantage to businesses through “pre-approved” licenses, facilitating their preparation for the upcoming market launch. Representative Zack Stephenson emphasized the importance of this change, noting that it allows prospective entrepreneurs to secure resources and plan effectively for their future operations. However, it’s crucial to note that these early licenses are exclusively available to individuals meeting the criteria for “social equity” applicants.
Despite the anticipation surrounding these adjustments, there are concerns within the industry and among legislators. Representative Nolan West voiced apprehension regarding the potential delay in cultivation activities, advocating for an earlier start to address the demand for cannabis products. Meanwhile, debates over the licensing process intensify, particularly regarding the transition from a merit-based system to a lottery-based approach.
The proposed lottery system has sparked controversy, with proponents arguing for its fairness and detractors expressing doubts about its efficacy in achieving social equity goals. While some believe it offers equal opportunities, others fear it could be exploited by larger, out-of-state retailers. Nevertheless, House Speaker Melissa Hortman endorsed the switch to a random selection process, emphasizing its fairness.
The legislation also encompasses various other provisions, including expansions to the medical cannabis program and regulatory adjustments to accommodate evolving market dynamics. Additionally, amendments addressing concerns such as data privacy and audit trails were incorporated to enhance the bill’s integrity.
As the bill progresses to the Senate, discussions on refining the proposed changes are expected to continue. With both chambers actively involved in shaping the final legislation, the focus remains on creating a robust regulatory framework that balances economic opportunities with social equity considerations.
