Politics
Minnesota Marijuana Regulators Outline Plan To ‘Expedite’ Legal Sales And Give ‘Early Advantages’ To Equity Businesses
Officials in Minnesota hope to begin issuing temporary licenses for the state’s legal marijuana industry ahead of schedule—”as soon as this summer”—with an emphasis on aiding social equity applicants, they said this week during an update on the implementation of an adult-use legalization law adopted last year.
The plan from the state’s Office of Cannabis Management (OCM), which would require a change in statute from state lawmakers, would “expedite the 2025 market launch and provide early advantages to social equity participants,” according a presentation they gave to stakeholders on Tuesday.
Doing so will help prevent a “licensing bottleneck,” Charlene Briner, OCM’s interim director, said.
“We want to include a mechanism for temporary licenses, particularly for social equity applicants,” Briner said during a public webinar hosted by OCM. “And when I say temporary licenses, I mean early licenses—so as soon as this summer, depending on if the legislature decides to take us up on that.”
The change would allow equity-owned businesses to secure licenses ahead of time, according to the presentation, “so when the market opens, they have the first availability to launch.”
Current law already awards 20 percent of license application points based on social equity status, but it doesn’t give equity businesses any first-mover advantage.
“We want to strengthen the already robust social equity goals in the bill,” Briner said. “We believe that the intention of the law is very clear but that there are opportunities to make some of those social equity opportunities even more robust.”
Minnesota Office of Cannabis Management
OCM also wants to lower equity ownership requirements from 100 percent to 65 percent, which Briner said “increases the opportunity for social equity applicants to actually acquire capital and secure funding.”
Briner and two others—Vanessa Vogl, a rulemaking attorney at the Minnesota Department of Human Services, and OCM Outreach Director Merone Melekin—spent an hour running through a laundry list of potential changes, as well as mechanisms already happening, to ready the state for retail sales, which are targeted to begin in the first quarter of next year.
“A lot of progress has been made to go stand up the office and really get underway with rulemaking,” Briner told the online audience of more than 450 people. “But we also recognize that so much of the work that we’re doing is invisible, so we thought it was time for us to share with you some other work that we’re doing.”
Surveys of marijuana consumers and comparisons to other legal states such as Michigan and Missouri, she said, “project a pretty robust demand for cannabis in Minnesota.”
Other proposed legislative changes mentioned in the OCM presentation would merge medical and adult-use cultivation license types into a single supply chain—which officials said recognizes that the products are similar at the time of harvest—and make it so entities seeking business licenses don’t need to secure physical premises before submitting initial applications to the state office.
In other states, Briner said, applicants have needed to obtain facilities before applying, which sometimes caused enormous financial hardship for small businesses as they waited for operations to be approved so they could open for business.
OCM will continue to refine its legislative proposals ahead of the start of Minnesota’s lawmaking session next month, Briner said.
Updates on the process of implementation, meanwhile, included details on new OCM hires—including of a liaison to interface with tribal governments on cannabis issues—and the state’s entrance into various contracts, including with the firm Carahsoft to launch the state’s new license application system.
Minnesota’s cannabis law has already allowed tribes within the state to open marijuana businesses before the state begins licensing traditional retailers, and some tribal governments—including the Red Lake Band of Chippewa Indians, the White Earth Nation and the Leech Lake Band of Ojibwe—have already entered the legal market.
“We are working very closely with Minnesota’s 11 tribes on both tribal contracting and other issues that impact our native community,” Briner said.
Vogl, the Department of Human Services rulemaking attorney, said officials are attempting to be “as efficient as possible” as they work to review draft regulations for Minnesota’s licensed industry.
While the state has approved emergency rulemaking, which suspends certain requirements for public engagement, Vogl said regulators are nevertheless working to gather broad input.
“Because of the heightened level of public interest in these roles—as evidenced by all the people joining us today on this webinar—and the depth and breadth of the impact these new rules will have on the lives on Minnesotans,” she said, “the office has chosen to pursue a more robust public engagement approach.”
Melekin, OCM’s outreach director, noted that the office recently launched its sixth rulemaking public input survey, which covers laboratory standards and edible products. The deadline for comments is technically February 11, Melekin said, but OCM is happy to accept feedback via email even after individual surveys close.
“Even though surveys one through five have closed, this is not meant to limit the ability to provide input,” she said. “We have been reviewing every single survey response that comes through and finding that they have value not only for rules input, but also for informing general regulatory planning and other activities carried out by the office.”
Engagement and drafting of rules has been happening since last fall, and officials said on the webinar they expect proposed rules sometime this coming fall. At that point, a mandatory 30-day public comment period would begin and further revisions could be made.
“Our projected goal, again, for the rules going into effect is early 2025,” Vogl said, “and once the rules are in effect, complete licensing applications will be available shortly thereafter.”
Officials also noted that the state’s Office of Medical Cannabis has dozens of staffers currently working to plan for the transition into OCM as well as to craft rules for hemp-derived cannabinoids, which are currently unregulated and easily available.
OCM also wants to launch a state reference laboratory to help ensure accurate testing of retail products. “We think it’s very important for the state to play a role in establishing lab standards,” Briner said, “and making sure that we have that capacity as part of a holistic approach to launching our market.”
As for the new license application system, she said OCM is “making a lot of progress” and hopes to begin field testing by late spring to ensure it can handle the volume expected once the application window formally opens.
Minnesota’s Cannabis Advisory Council, which will provide recommendations to OCM is almost fully staffed, officials said. Gov. Tim Walz (D) appointed 18 members to the council late last year, and an additional six slots are expected to be filled early this year.
“We hope to move quickly through the legislative session and position ourselves for a successful market launch,” Briner said at the close of the webinar, “all in service of what we are optimistic about establishing, which is a successful, accessible, equitable and sustainable cannabis industry in Minnesota.”
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The webinar comes after OCM earlier this month recommended a number of changes to the state’s legalization law in order to help consumers make the transition to a regulated system.
In the interim, adults 21 and older can already legally use, possess and grow marijuana for personal use. In August, the governor clarified that homegrown cannabis cannot be sold commercially.
Following legalization, minor violations of possession or home cultivation limits can result in petty misdemeanors, charges some advocates have said should include state-provided legal representation.
Even before the governor signed the reform bill, the state launched a website that serves as a hub for information about the new law. Officials have also already started soliciting vendors to help build a licensing system for recreational marijuana businesses.
Earlier this month, Walz renewed his search for a top marijuana regulator to lead OCM. In September, the office’s former head, Erin DuPree, a cannabis industry consultant, stepped down after one day of work following a Star Tribune report that her hemp shop allegedly sold illegal products. Lab results reportedly showed elevated THC levels and the presence of banned synthetic ingredients.
Also in September, the Minnesota Supreme Court ruled that the odor of marijuana, on its own, does not establish probable cause for police officers to search a vehicle.
Aside from OCM, another body created by Minnesota’s marijuana law is the Cannabis Expungement Board, which will facilitate record sealing for people with eligible marijuana convictions on their records. The review process for eligible cases began in August. In the meantime, officials recently added a new notice to cannabis criminal history records, essentially letting reviewers know that certain marijuana records that appear on records checks may be pending expungement.
