Minnesota Senators Approve Major Overhaul Of Marijuana Legalization Bill, With House Previewing Similar Move
Another pair of Minnesota House and Senate committees have approved legislation to legalize marijuana for adult use in the state—with the latter panel adopting a major overhaul of the measure.
The House Transportation Finance and Policy Committee passed the legislation from Rep. Zack Stephenson (D) in a 9-4 vote on Tuesday—the 13th panel in the chamber to advance the reform.
Later in the day, the Senate State and Local Government and Veterans Committee became the tenth panel in the chamber to pass its version of the bill, which is being carried by Sen. Lindsey Port (D), with a 8-5 vote.
“Minnesotans are ready for this change,” Stephenson told House colleagues. “Current cannabis laws are doing more harm than good, and Minnesotans deserve the freedom and respect to make their own decisions about cannabis.”
Port told senators that “the prohibition of cannabis is a failed system that has not achieved the desired goals and has had incredible costs for our communities, especially for communities of color.”
“We have an opportunity today to continue the process to undo some of the harm that has been done and create a system of regulation that works for Minnesota consumers and businesses, while ensuring an opportunity in this new market for communities that have been most affected by prohibition,” she said. “Our main goals are to legalize, regulate and expunge, and we are working to ensure this bill does just that.”
While both versions have been amended numerous times on their extensive committee journeys, the Senate panel on Tuesday adopted a comprehensive substitute from the sponsor that is primarily meant to address concerns from industry stakeholders who are operating under a cannabis law enacted last year that legalized low-THC edibles in the state.
The amendment would create two new licensing categories, change license application and transfer provisions, provide cities and counties with more regulatory control and clean up language by combining previously distinct sections, among other revisions.
Port said that the amendment was drafted to incorporate “stakeholder feedback” and that it “untangles the industrial hemp industry, ensuring that the hemp industry, which is legalized federally, does not have undue burden that would harm the industry.”
Stephenson said his companion will would undergo a similar overhaul at its next committee stop.
With majorities in both the House and Senate and control over the governorship this session, Democratic-Farmer-Labor party officials are confident that legalization will be enacted in short order following the extensive committee consideration.
Gov. Tim Walz (D) recently released his biennial budget request, which included proposed funding to implement marijuana legalization and expungements, and made projections about the millions of dollars in cannabis tax revenue that his office estimates the state will earn after the reform is enacted.
Walz discussed his proposal in a recent interview, explaining why he’s calling for a tax rate on marijuana sales that’s nearly double that of the bill that’s advancing in the legislature.
That legislation is an iteration of the 2021 House-passed bill from former Majority Leader Ryan Winkler (D), who now serves as campaign chairman of the advocacy coalition MN is Ready. That group announced last month that it would be lobbying for the measure while leading a grassroots effort to build support for reform.
The governor has called on supporters to join lawmakers and the administration in their push legalize marijuana this session, and he circulated an email blast in January that encourages people to sign a petition backing the reform.
Much of the revised bills that are advancing through committee are consistent with Winkler’s legislation, though there are a few key changes, in addition to all of the newly adopted amendments. For example, it adds a new license category for businesses that sell “lower-potency edible products.”
There would also be reduced regulatory requirements for those licensees, and they’d be able to permit on-site consumption if they have a liquor license, which is meant to ensure that shops currently selling low-THC beverages and edibles don’t face disruption.
But throughout the committee process, industry stakeholders have pushed for additional changes to the legislation so that businesses that entered the market under the law enacted in 2022 aren’t excessively impacted.
At the House committee hearing, members rejected amendments to change the legal age for cannabis from 21 to 25, criminalize operating a motor vehicle or school bus when there is “physical evidence present in the person’s body” of cannabis use and revise provisions of law concerning driving or causing harm while under the influence of cannabis.
An amendment to reduce the amount of marijuana someone can store at home from five pounds to one and half pounds and lower possession amounts outside of the home that would trigger increased penalties was withdrawn after the bill sponsor committed to accepting similar language in the next committee.
A second amendment to remove the requirement for marijuana business license applicants to provide diversity plans was withdrawn under the same conditions.
Separately, the sponsor said that he supports the idea of greatly increasing the amount of funding appropriated to the State Patrol under the bill and clarifying that some of the money be spent on continuing education training for drug recognition experts—but an amendment to do that was also withdrawn.
The next stop for the bill in the House is Commerce Finance and Policy Committee, which previously approved the measure earlier this year. It will head back to that panel, which Stephenson chairs, in order for the large-scale amendment on licensing to be considered before the proposal advances to additional committees.
At the Senate hearing, members of the panel approved the overhaul amendment from the sponsor.
It would replace the language of several sections of the original bill with updated provisions that are primarily meant to address concerns raised by the state’s existing hemp and low-THC edible businesses.
It would create two new licensing categories (for lower-potency hemp edible manufacturers and mid-size cannabis firms classified as mezzobusinesses), mandate that license transfers from social equity business must go to other social equity applicants and provide for dual registration at the city- and county-level for cannabis licensees.
The substitute also removes a requirement that people seeking a license must have a physical location secured before submitting their application. The bill was also cleaned up to combine rules for various licensing types, and the revision now includes size limitations to account for the addition of mezzobusiness licenses.
It makes it so existing larger medical cannabis licensees can be grandfathered into the program in order to meet patient demand. Also, the amendment mandates labeling requirements for hemp-derived topical products.
Members of the panel also approved additional amendments on Tuesday.
One adopted change allows localities to limit the number of marijuana business licenses based on population size, requires business license applications to include land use compatibility statements from local governments and makes it so cannabis businesses cannot operate within 500 feet of schools, day cares and other sensitive areas instead of 1,000 feet while adding parks to that list of restricted areas.
Another successful amendment requires regulators to conduct an annual market analysis to determine if goals are being met to provide a sufficient supply of cannabis to meet demand, maintain market stability, ensure a competitive market and limit the sale of unregulated products.
Other approved changes clarify that the bill does not limit the state’s two current medical cannabis businesses from being vertically integrated through their existing facilities, give regulators flexibility to permit—and remove permission for—activities by marijuana businesses if doing so is “substantially necessary” in order to meet other goals, spell out the process for what happens to retired police dogs including giving their handlers the first opportunity to adopt them and require that initial appointments to the Cannabis Advisory Council be made by August 1 with its first meeting being held by September 15.
Additional approved amendments mandate that a person who served in the legislature or statewide office cannot be the lead cannabis regulator for a period of five years after leaving office and make it so people who worked at the cannabis regulatory body won’t be able to have a financial interest in an entity that received a grant under the bill for a period of two years after leaving office.
Members defeated a proposal that would have allowed local governments to prohibit cannabis businesses from operating.
In the Senate, the legislation is heading to back to the Judiciary and Public Safety Committee Committee, which previously advanced the bill, for further consideration.
Here are the main components of the revised marijuana legalization bills, HF 100 and SF 73:
Adults 21 and older could purchase up to two ounces of cannabis and cultivate up to eight plants, four of which could be mature.
They could possess up to two ounces in a public place and up to five pounds in a private dwelling.
Gifting up to two ounces of marijuana without remuneration between adults would be permitted.
It would promote social equity, in part by ensuring that diverse licensing by scoring equity applicants higher.
Prior marijuana records would also be automatically expunged. The Bureau of Criminal Apprehension would be responsible for identifying people who are eligible for relief and process the expungements.
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.
Unlike in many legal states, local municipalities would be banned from prohibiting marijuana businesses from operating in their areas, though they could set “reasonable” regulations on the time of operation and location of those businesses.
Retail cannabis sales would be taxed at eight percent. Part of that revenue would fund substance misuse treatment programs, as well as grants to support farmers.
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.
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.
The legislation as revised fixes an issue in current statute that prohibits liquor stores from selling THC products.
It also contains language banning synthetic cannabinoids, which is consistent with Board of Pharmacy rules put into place last year.
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The House panels that have passed the legislation in recent weeks are the Economic Development Finance and Policy Committee, Public Safety Finance and Policy Committee, Health Finance and Policy Committee, Education Finance Committee, Human Services Policy Committee, Workforce Development Finance and Policy Committee, Agriculture Finance and Policy Committee, State and Local Government Finance and Policy Committee, Labor and Industry Finance and Policy Committee, Environment and Natural Resources Finance and Policy Committee, Judiciary Finance and Civil Law Committee and Commerce Finance and Policy Committee.
The Senate committees that have signed off so far are the Labor Committee, Human Services Committee, Health and Human Services Committee, Environment, Climate, and Legacy Committee, Agriculture, Broadband, and Rural Development Committee, Jobs and Economic Development Committee, Commerce and Consumer Protection Committee and Judiciary and Public Safety Committee.
Lawmakers and the governor have expressed optimism about the prospects of legalization this session, especially with Democrats newly in control of both chambers, whereas last session they only had a House majority.
Following their election win in November, Democrats internally agreed to discuss the issue imminently.
House Speaker Melissa Hortman (D) said recently that she expects cannabis reform to be included in the governor’s forthcoming budget request, though she reiterated that the reform “will take a long time” to move through the legislature.
While marijuana reform was excluded from a list of legislative priorities that Democrats unveiled last month, Hortman said that the issue is “a priority,” albeit a “very big, complicated.”
The governor included funding for implementing legalization in his last executive budget request, but lawmakers were unable to enact the policy change. He and Hortman have differing opinions about how quickly the issue can advance this session, however, with Walz recently saying it would be done “by May” and the speaker indicating it could take until next year.
Winkler told Marijuana Moment that he agrees with the governor, saying “it is likely that [passing legalization] will be done by May.”
“The reason is that the legislature adjourns until next year at the end of May, and so if they don’t do it in that timeline, it’ll take another full year—and I don’t think anything will be improved or bettered by waiting,” he said. “So it’s in everyone’s interest to get this bill passed.”
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.
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Photo courtesy of Brian Shamblen.