Dabney: Poor leadership undermines Minnesota’s cannabis market, equity efforts

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Minnesota’s fledgling cannabis market has hit yet another roadblock. The Office of Cannabis Management (OCM) has abandoned its first lottery designed to help social-equity applicants break into the industry. At the heart of this setback lies a troubling leadership gap — one that critics in the cannabis community blame on Gov. Tim Walz.

The canceled lottery was intended to offer a real opportunity for those who have historically shouldered the brunt of prohibition to access ownership in a market that has historically been weaponized against them. By opening a simplified path to licenses, the lottery would have helped these applicants compete with more established and well-funded entrepreneurs.

I was among the more than 1,800 applicants hoping to secure a cannabis business license through the early lottery. Unfortunately, like nearly 1,200 other businesses, I was rejected. This wave of denials triggered litigation, culminating in the OCM abandoning the early lottery altogether. Whether the issue was due to an overly strict interpretation of the rules or an unclear evaluation process, the result is the same: Many social equity applicants — myself included — remain sidelined and unsure how to move forward in an industry that was supposed to welcome us. For a program meant to open doors, these rejections highlight the need for stronger leadership and clearer, more equitable policies at the OCM.

The equity application process was originally conceived to empower Minnesotans from marginalized communities, such as farmers, those entangled in the criminal justice system due to cannabis, veterans who honorably served our country, and people from economically depressed areas of our state whose education was compromised by underfunded schools with substantial achievement gaps. It was meant to offer a pathway into the industry, fostering economic and social mobility, and enabling such people to become business owners and contributors in this exciting and lucrative field. But the OCM rejected a majority of applications from Minnesotans often for minor procedural mistakes. The aggressive policing of “clerical errors” effectively shut out Minnesotans who already faced systemic barriers. By prioritizing fault-finding in paperwork over a more holistic, supportive approach to licensing, the OCM undermined the very equity goals it claimed to champion, leaving a majority of Minnesota applicants from underrepresented communities feeling overlooked and disenfranchised.

“It’s frustrating, to say the least,” says Andy Caruthers, owner of Twin Cities High and a Golden Valley-based entrepreneur seeking a social-equity license. “Small-business owners and people who need this opportunity most just got sidelined. We need consistent, informed and qualified leadership — and we need it now.”

This shortsighted approach underscores a deeper failure of leadership, one that fails to grasp the complexities of the market or the communities most deserving of relief and restitution from the systemic harms of cannabis prohibition and criminalization. Without qualified officials who truly understand cannabis, the industry, the challenges faced by Minnesotans seeking licensure and who are genuinely invested in social equity (not just the appearance of it), the OCM will continue to enact policies and make decisions that keep out marginalized applicants. Minnesota’s equity applicants deserve a transparent, well-structured system backed by robust outreach, guidance and support, enabling them to navigate the application process with confidence, and to provide underserved communities with tangible and significant ownership stakes within the Minnesota cannabis market.

“The equity applicant process was flawed,” said Tanner Berris, chief operating officer of Superior Molecular, reflecting on the state’s recent missteps. “For example, when a teacher fails two-thirds of their students, it clearly signals deeper systemic or instructional issues, and the teacher must take responsibility for those failings. Likewise, the Office of Cannabis Management must acknowledge and address the structural shortcomings that have left the majority of social-equity applicants at a disadvantage.”

The trouble started back in September 2023 when Walz announced Erin DuPree as the first OCM director, only for her to resign a day later due to allegations that her hemp shop had allegedly sold illegal products. (Full disclosure: I was a runner-up to head the cannabis office. And in case you’re wondering, no, I’m not planning to reapply for the position.) With DuPree stepping aside, the entire application process and plans to bring local leaders into government leadership were abandoned along with her. Instead, longtime state official Charlene Briner, who had served as a deputy commissioner at both the Department of Education and Department of Human Services, took the reins on a contract basis. Then, in January 2024, Walz made her appointment as interim director official, while simultaneously launching another search for a permanent leader.

But the churn did not end there. Earlier this week, just weeks after abandoning the social-equity lottery, Briner announced she was stepping aside, and Walz announced a new interim leader: Eric Taubel, who has served as OCM’s general counsel. Though Taubel may be well-versed in the mechanics of government, the ongoing revolving door raises questions about whether Taubel or the OCM in general has both the scientific knowledge and an understanding of the nuances of the white and black cannabis markets that are necessary to guide a complex industry still in its infancy.

“There’s a good amount of industry experience within the [Cannabis Advisory Committee], but it’s never utilized,” says Stefan Egan, who has a decade of cannabis cultivation and processing experience and who recently resigned from OCM’s advisory committee. “It’s run like a dictatorship. The agenda was presented just 24 hours before meetings, and the CAC was not allowed to deviate from it — even if we followed formal protocol. In the end, I felt it was a complete waste of time. Poor leadership consistently yields poor results, and that’s exactly what we saw with this committee.”

Organic leadership has risen within the cannabis community itself, but so far, Walz’s office has chosen to tokenize and sideline those voices. He paid lip service to equity and social justice goals, but gave the real power to favored bureaucrats with shallow knowledge of the new cannabis market and the plant itself.

Many in the industry contend that real-world cannabis experience and knowledge are critical for building a secure and equitable market. Minnesota’s cannabis law outlines detailed guidelines for cultivation, testing and distribution, all of which hinge on a deep understanding of plant biology, compliance and consumer safety. From establishing acceptable limits for contaminants to ensuring consistent product potency, science-based leadership could help steer the new market away from potential pitfalls.

A significant consequence of the OCM’s leadership gap is that Minnesota remains vulnerable to an influx of out-of-state cannabis, both in legitimate storefronts pushing the boundaries of the law and at clandestine market events. Without a nuanced grasp of black-market economics — such as understanding how pricing, supply, and consumer demand interplay — regulators have been unable to create a framework that disincentivizes illicit sales. In the absence of rigorous oversight and clear guidelines, illicit distributors are capitalizing on the gaps, regularly transporting product across state lines and tapping into a ready consumer base.

This unregulated flow undermines potential legal businesses, reduces tax revenues, and increases health and safety risks for consumers. By failing to incorporate the realities of the underground market into their regulatory approach, state officials have effectively left the door wide open for illegal operations to continue — and in many cases to flourish.

The OCM’s leadership woes have sown distrust among entrepreneurs and consumers alike. Critics say the office’s missteps are preventing Minnesota from effectively delivering on its social equity promises.

“Having someone who truly understands the nuances of growing, testing, and bringing cannabis products to market is essential,” says Bryant Jones, a cannabis horticultural scientist and member of the Cannabis Advisory Council. “Without science-based leadership, the push for real equity in Minnesota’s cannabis scene will remain more rhetoric than reality.”

Industry insiders worry that repeated leadership missteps signal ongoing instability for the OCM. Such instability could delay or derail the robust, inclusive marketplace that Walz initially pledged, leaving the door open for large players to dominate a sector that was supposed to level the playing field.

With Taubel now at the helm on an interim basis and a fresh search underway, many hope this leadership shakeup will finally result in a scientifically knowledgeable director who can shepherd Minnesota’s cannabis industry forward in a fair, structured manner. Until that happens, the abandoned lottery remains a glaring example of how poor leadership can hamper equity goals.

If Minnesota is to develop a cannabis market that truly benefits everyone, from veterans to entrepreneurs from marginalized communities, state officials will need to act quickly. They must identify and empower qualified leaders who grasp the intricacies of cannabis production, science and regulation. Without swift changes at the top, social-equity applicants could find their hard-fought opportunities slipping away, and Minnesota’s once-promising cannabis marketplace may continue to falter and fall into the hands of big cannabis businesses.