As votes near, 4 ways Minnesota's marijuana legalization bill has changed

Minnesota could legalize recreational marijuana in the next month.

A Democrat-led recreational marijuana bill has cleared a gantlet of committees, setting it up for votes in the DFL-controlled state Legislature. The Minnesota House, which passed a similar proposal two years ago that was blocked by Senate Republicans, is expected to vote on the bill Monday. A Senate vote could follow soon after.

If approved, differences in the bills passed by each chamber would be reconciled in a conference committee. The final compromise bill would then need one last vote before heading to DFL Gov. Tim Walz, who supports legalizing marijuana.

The bill to set up a legal adult-use cannabis market would create a state agency that oversees the licensing of recreational and medical marijuana businesses. That agency would have a mandate to stamp out the black market, protect public safety, redress harms to communities caused by cannabis prohibition and "meet the market demand for cannabis flower and cannabis products."

The House bill dedicates $73 million to set up the regulatory structure, pay for education and addiction programs, fund law enforcement grants and other measures. The program is expected to be self-sustaining in 2026 and beyond.

City governments could set restrictions on where marijuana businesses could be located but not ban them.

Minnesotans with misdemeanor marijuana charges would see their records cleared, and a committee would be formed to evaluate expungement for felony marijuana crimes on a case-by-case basis.

While those overarching elements have remained largely unchanged, several finer points have been updated since the House bill was introduced in January and a Senate version followed. Here are the highlights:

Possession limits lowered

Lawmakers reduced the amount of marijuana that adults would be allowed to possess at home from the original 5 pounds. The House bill sets an at-home possession limit of 1½ pounds, or 24 ounces, while the Senate caps it at 2 pounds.

That would still make Minnesota an outlier among states that have legalized recreational cannabis, where possession of several ounces is on the high end of legal limits. At the national average price per ounce of $250, the current House limit would entitle Minnesotans to possess $6,000 worth of pot at one time.

Minnesotans 21 and older would still be allowed to buy up to 2 ounces of cannabis flower, 8 grams of concentrate and 800 milligrams worth of edible products at one time and possess those amounts in public. They also could still grow up to eight cannabis plants at home.

Taxes up and down

Minnesota would have some of the lowest retail taxes on cannabis products among states that have legalized marijuana.

The House bill would impose an 8% gross receipts tax on cannabis products over the next four years.

After that, Minnesota's Department of Revenue commissioner would be charged with adjusting the rate if the tax revenue raised by marijuana sales exceeded state regulatory costs and appropriations for various state agencies and substance abuse programs.

The Senate version was modified this week to increase the tax to 10%, with a quarter of revenues going to a local government aid account.

The state would collect additional revenue from application and license fees for marijuana businesses.

A cannabis cultivator would pay a $10,000 application fee, a $20,000 initial license fee and $30,000 to renew its license.

Manufacturers would pay $10,000 for both their application and initial license fees and then $20,000 for renewal. Retailers would pay less — $2,500 for their application and initial license fees and $5,000 for renewal.

A small cannabis business, defined in the bill as a "microbusiness," would pay no initial license fee, a $500 application fee and $2,000 to renew their license.

Hemp gets a hand?

Legislators have made several changes they say will preserve Minnesota's unique hemp-derived THC market that was legalized last summer, with little regulation or enforcement.

Several definitions were added to the bills to help clarify hemp's unusual status as a federally legal version of cannabis — so long as it contains less than 0.3% THC by weight. THC is the main chemical in marijuana that produces a high.

Lower-potency hemp retailer and processor licenses are meant to allow companies to continue selling edibles and drinks with no more than 5 milligrams of THC per serving (50 milligrams per package) as they do now. A language change would allow breweries to continue using their existing equipment to package THC-infused beverages.

Hemp advocates disagree over whether the changes go far enough. Some want hemp removed from the bill entirely and given a separate bill to ensure the distinction between federally legal hemp and federally illegal marijuana remains in state law. The distinction gives hemp businesses access to banking and tax benefits marijuana businesses do not enjoy.

"Remove hemp out of the bill. Remove the controversy," Jeff Brinkman of Superior Cannabis Co. said during a recent news conference.

'Mezzo' option added

A new "mezzobusiness" classification, from the Italian for "medium," would allow certain sizes of cannabis growers, processors and retailers to be owned by the same person or company, a practice known as vertical integration. That will also be the case with hemp-based businesses and "micro" cannabis businesses.

Vertical integration can help businesses keep costs down and potentially pass on lower prices to consumers. It can also crowd out competition and bring higher prices.

Opponents plead their case

A group opposing marijuana legalization held a news conference at the State Capitol last week asking lawmakers to pause their effort and instead commission a study on the long-term impacts.

"We do not feel the current legislation has considered what the long-term effects will be, and not enough is being done in the bill to protect the safety of the citizens of our state," said Kim Bemis, co-chair of Smart Approaches to Marijuana Minnesota, which opposes legalization.

Olmsted County Sheriff Kevin Torgerson expressed concern that there isn't a reliable roadside test for marijuana impairment. John Hausladen, president of the Minnesota Trucking Association, said industries that are subject to federally mandated drug testing could struggle to find workers if marijuana use is legalized.