On the chaotic final day of the 2024 legislative session, Minnesota lawmakers on Sunday approved a sweeping bill making changes to the state’s year-old law legalizing marijuana for recreational use. Many of the updates were backed by the state Office of Cannabis Management (OCM) ahead of the anticipated launch of Minnesota’s adult-use marijuana market next year. The cannabis bill now heads to Gov. Tim Walz’s desk for his signature. He is expected to sign it.
Here’s an overview of what’s in the bill.
New qualifications for social equity licenses
The following categories of applicants will now qualify for “social equity” cannabis business licenses:
- Individuals or close family members of individuals previously convicted of marijuana offenses
- All military veterans
- “Emerging farmers” who for at least three years have provided the majority of labor and management for a small farm (between $5,000 and $100,000 in sales in the previous year)
- Residents of high-poverty areas, including census tracts for which: the poverty rate was 20% or greater; the median family income was less than 80% of the statewide median (or for cities, less than 80% of the median family income for that metropolitan area); at least 20% of households receive Supplemental Nutrition Assistance Program (SNAP) benefits; or the population has a high score on the Centers for Disease Control and Prevention’s Social Vulnerability Index.
A head start for some social equity applicants
The bill establishes a pre-approval process for some social equity applicants who are awarded licenses in an early lottery (more on lotteries below) for a limited number of business licenses later this summer. Lottery winners will be able to begin preliminary work to set up their businesses with the security of knowing that if they fulfill the licensing requirements, they will receive a license when the OCM adopts rules for the adult-use cannabis market, expected in early 2025. Applicants who receive pre-approval must complete the licensing process within 18 months after rules are adopted, though the OCM may grant an extension of up to six months.
Social equity applicants who receive pre-approval for microbusiness, mezzobusiness or cultivator licenses and who comply with local codes and ordinances will be allowed to begin growing plants under the existing rules for medical cannabis cultivators to ensure a supply of cannabis is available when the market launches next year. Applicants who are pre-approved for other license types will be required to wait to begin operating until rules are in place.
Lotteries and limits for cannabis business licenses
The new legislation switches the process for awarding many cannabis business licenses from a points-based system to a “qualified lottery,” in which applicants who meet minimum qualifications — which include securing a property and developing a security plan — are chosen to receive licenses at random.
The Office of Cannabis Management must begin accepting applications for a pre-approval license lottery for social equity applicants by July 24. It must stop accepting pre-approval applications by Aug. 12. Additional lotteries for social equity and other licenses will be held later.
The bill sets caps for some license types, including cultivator, manufacturer, retailer and mezzobusiness licenses until July 1, 2026. There are no limits on other license types, including microbusinesses, though the OCM could place additional caps on these licenses in the future.
