Minnesota Officials Seek Marijuana Licensing Contractor To Prepare For Legalization Even Before Governor Signs Reform Bill
Minnesota officials are already soliciting vendors to help build a licensing system for recreational marijuana businesses—even before the governor has officially signed the legalization bill that lawmakers recently sent to his desk.
In a request for proposal (RFP) posted on Wednesday, the state Department of Information Technology Services (MNIT) said that it is partnering with Departments of Health and Agriculture, as well as the yet-to-be-established Office of Cannabis Management (OCM) to find a “vendor to provide the software required to accept license applications, process applications, issue licenses, and allow licensees to manage their licenses related to Adult Use of Cannabis.”
The RFP also included an estimated timeline for licensing implementation, with officials saying that they expect to start processing license applications in May 2024. Retails sales are anticipated to begin January 1, 2025.
Gov. Tim Walz (D) said over the weekend that he will be signing marijuana legalization into law at a “big” ceremony after Memorial Day next week, but the state isn’t waiting around to prepare the infrastructure. Even before this latest notice was posted, a government website launched to provide information to consumers and businesses about the forthcoming cannabis policies.
“Minnesota is becoming the 23rd state in the nation to legalize cannabis use for adults 21 and older,” MNIT said in the RFP. “The proposed legislation creates the framework for adult-use cannabis in Minnesota and establishes a new state agency—the Office of Cannabis Management—that will regulate cannabis (including for the adult-use market, the Medical Cannabis Program, and for low-potency hemp edibles) and issue licenses and develop regulations outlining how and when businesses can participate in the industry.”
“The State prefers a software solution that can be implemented quickly with no custom development required,” the notice says.
MNIT also listed basic requirements for businesses that are interested in being contracted to facilitate licensing.
They should be able to easily integrate the licensing software with the state’s Metrc system, process license applications, provide an applicant/license holder portal, receive and track online complaints “via work queues,” provide a compliance and enforcement inspection module, host a platform for the state to create custom reports, management payments and more.
The contract is projected to run from July 2023 to June 2025, “with the option to extend up to an additional 3 years in increments determined by the State.”
“Responders are encouraged to propose additional tasks, activities, or goods above and beyond the scope of what is requested in this solicitation if they will substantially improve the results of this procurement,” MNIT said. “Any costs associated with these additional tasks, activities, or goods should be clearly marked and separated from costs associated with the tasks activities, or goods specifically requested under this solicitation.”
Applications for prospective vendors will be judged based on work plans, qualifications and experience, business/functional/non-functional/security requirements, accessibility of products and services, cost details and “preference points” if applicable for military veterans.
Here are the main components of the final marijuana legalization bill, HF 100.
As of August 1, adults 21 and older could purchase and possess in public up to two ounces of cannabis and they would be allowed to cultivate up to eight plants at home, four of which could be mature. People could possess up to two pounds of marijuana in their residences.
Gifting up to two ounces of marijuana without remuneration between adults would be permitted.
It’s expected to take 12-18 months for licenses to be issued and sales to start. As of March 1, 2025, existing medical cannabis businesses could receive new combination licenses that would allow them to participate in the adult-use market.
Certain marijuana misdemeanor records would also be automatically expunged, with implementation beginning in August. The Bureau of Criminal Apprehension would be responsible for identifying people who are eligible for relief to the courts, which will process the expungements. A newly created Cannabis Expungement Board would also consider felony cannabis offenses for relief, including potential sentence reductions for those still incarcerated.
In addition to creating a system of licensed cannabis businesses, municipalities and counties could own and operate government dispensaries.
On-site consumption permits could be approved for events, and cannabis delivery services would be permitted under the bill.
Local governments would not be allowed to prohibit marijuana businesses from operating in their areas, though they could set “reasonable” regulations on the time of operation and location while also limiting the number of cannabis business licenses based on population size.
There would be a gross receipts tax on cannabis sales in the amount of 10 percent, which will be applied in addition to the state’s standard 6.875 percent sales tax.
Eighty percent of revenue would go into the state’s general fund—with some monies earmarked for grants to help cannabis businesses, fund substance misuse treatment efforts and other programs—and 20 percent would go to local governments.
A new Office of Cannabis Management would be established, and it would be responsible for regulating the market and issuing cannabis business licenses. There would be a designated Division of Social Equity.
The legislation would promote social equity, in part by ensuring diverse licensing by scoring equity applicants higher. People living in low-income neighborhoods and military veterans who lost honorable status due to a cannabis-related offense would be considered social equity applicants eligible for priority licensing. People convicted of cannabis offenses, or who have an immediate family member with such a conviction, would also qualify.
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Following their election win in November, Democrats internally agreed to discuss the issue imminently.
A poll released this month found that 64 percent of Minnesota registered voters support creating a regulated marijuana market, including 81 percent of Democrats and a 49 percent plurality of Republicans.
Two polls released in September found that the majority of Minnesota residents support adult-use marijuana legalization—and one survey showed that even more Minnesotans approve of the state’s move to legalize THC-infused edibles that was enacted last year.
A survey conducted by officials with the House at the annual State Fair that was released in September also found majority support for legalization. That legislature-run poll found that 61 percent of Minnesotans back legalizing cannabis for adult use.
Support was up this year from 58 percent when the House Public Information Services polled fair goers on the issue in 2021. In 2019, the House poll found 56 percent support for legalization.
Meanwhile, Minnesota legislature sent a large-scale health policy bill to the governor on Monday that contains provisions to create a psychedelics task force meant to prepare the state for possible legalization.
And last week, the governor signed legislation that contains provisions to legalize drug paraphernalia possession, syringe services, residue and testing—a win for harm reduction advocates in the state.
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