Governor Walz signed HF 100 on May 30, 2023, making recreational cannabis use legal in Minnesota. Starting August 1, 2023, adults 21 years of age and older are allowed to use and possess up to two ounces of cannabis in public places. In addition to being allowed to possess up to two pounds of cannabis, individuals may also grow up to eight plants in their homes.
Although HF 100 also allows for the sale of cannabis for commercial purposes, it does not contain any regulatory market guidelines. The Office of Cannabis Management, a recently established state agency, is in charge of drafting and implementing regulations for the commercial sales market. The state is going to start taking applications for retail cannabis stores for recreational use in May 2024, with the possibility of starting sales in January 2025.
Which Authority Is In-Charge Of The Cannabis Industry In Minnesota
The Office of Cannabis Management is in charge of monitoring Minnesota’s cannabis market. Additionally, the office undertakes management of Minnesota’s non-taxable medical marijuana program.
Tribal governments will establish their own laws.
Application Window For Cannabis Businesses In Minnesota
In 2024, the Office of Cannabis Management Board will start accepting applications for cannabis business licenses. It is expected that the application process will start sometime in the following year, even though there is no official date for when applications will be accepted.
The applicant must make sure that their application has the necessary supporting documents and is at least 21 years old. Candidates must also provide proof that they meet the financial criteria and have no criminal records.
Cannabis Tax Rates
The law has set a 10% state cannabis tax, which will be added to Minnesota’s existing 6.875% sales tax, for an anticipated total tax rate of about 17%.
Minnesota License Application Scoring Process
The OCM awards licenses through a merit-based grading process that takes into account factors such as:
- Social equity applicant status
- Veteran status
- Security and record-keeping measures
- Employee training plan
- Business plan and financial situation
- Labor and employment practices
- Knowledge and experience
- Environmental plan.
Interestingly, applicants with a social equity background may receive at least 20% of the total points available. The OCM uses “market stability” to calculate the overall number of licenses distributed.
How Big Is The Cannabis Market In Minnesota
By 2027, it is anticipated that yearly cannabis sales will exceed $500 million in Minnesota. The state of Minnesota is creating a profitable market for individuals looking to enter the adult-use marijuana sector. The geographical area is well-positioned, surrounded by four states that have not yet legalized marijuana, with low excise taxes and affordable licensing fees.
Recreational Cannabis License Application Fees
| License Type | Application Fee | Initial License Fee | Renewal License Fee |
| Microbusiness | $500 | NA | $2000 |
| Mezzobusiness | $5000 | $5000 | $10,000 |
| Cultivator | $10,000 | $20,000 | $30,000 |
| Manufacturer | $10,000 | $10,000 | $20,000 |
| Retailer | $2,500 | $2,500 | $5,000 |
| Wholeseller | $5,000 | $5,000 | $10,000 |
| Transporter | $250 | $500 | $1,000 |
| Testing Facility | $10,000 | $10,000 | $20,000 |
| Event Organizer | $750 | $750 | NA |
| Delivery Service | $250 | $500 | $1,000 |
Cannabis Rules For Employment
With a few exceptions, including law enforcement workers, firemen, child care providers, people in need of a commercial driver’s license, and medical professionals, the new law prohibits employers from using drug tests to screen for cannabis as a condition of employment.
However, a business may establish a policy that forbids the use of cannabis products at work or when using company equipment. If an employer has sufficient proof to believe someone is under the influence of cannabis while working, they can ask for a cannabis test and terminate the worker in question.
In general, Minnesota employers are not allowed to reject an applicant because they consume marijuana recreationally outside of the workplace.
Can I Grow Cannabis In Minnesota
Up to eight plants can be grown by adults at home, with no more than four of those plants flowering at the same time. Regardless of whether it’s indoors or outside, the plants must be grown in a closed, secured area that isn’t visible to others.
Like any other seed, including hemp and tree seeds, marijuana seeds will be regulated by the Minnesota Department of Agriculture. The state seed law will impose testing guidelines and labeling requirements on them.
Next Steps
As it puts its program together, the OCM will provide more details about the application process, including important dates. Sales are predicted to begin in the first quarter of 2025, and the application window is scheduled to open in May of 2024.
Although the new cannabis licenses won’t be given out until 2024, Cure8 suggests potential applicants begin assembling the required documents as early as possible, due to the competitive nature of this emerging market.
It’s time to start orchestrating your competitive application and developing your winning business by collaborating with a team of cannabis business licensing specialists. Contact us today to discuss your options!
