Minnesota Officials Push Marijuana Law Changes To Speed Market Launch And Address Use On Public Lands

This week saw a number of marijuana-related developments out of Minnesota, including a proposal from regulators to authorize temporary licenses in order to get an adult-use retail market off the ground with a focus on equity and a request from the state’s Department of Natural Resources to clarify rules around cannabis consumption on public lands.

The state, which legalized marijuana through the legislature in May of last year, is gearing up to accept license applications from would-be operators and launch legal sales sometime in 2025.

The new temporary licensing bill—SF 4782, officially introduced on Thursday—is part of regulators’ efforts to launch regulated sales as early as possible next year. Under the proposal, temporary licenses—including up to 50 for retail businesses—would become available to qualifying social equity applicants. Those include military veterans, residents from low-income areas, people with past cannabis convictions and farmers facing hardships.

Regulators at the Office of Cannabis Management (OCM) have spent much of the year outlining proposed changes to the state’s marijuana law, including to adjust rules around equity and speed the issuance of licenses. The office’s latest summary of legislative proposals for 2024 includes plans to strengthen social equity, create temporary licenses, speed the licensing process, regulate hemp products and combine the medical and adult-use cannabis supply chains into one.

In addition to giving equity businesses an “early mover advantage,” another change to licensing would make it so that qualifying equity applicants would no longer need to have 100 percent ownership of their businesses, bringing that threshold down to 65 percent.

“They are still majority party owners or controlling interests at 65 percent. That is because it is incredibly hard to access capital in this industry,” Charlene Briner, OCM’s interim chief said on Thursday. “By lowering those thresholds of ownership, we create opportunities to not only ensure that majority ownership, but also to unlock access to capital through creative partnerships for those applicants.”

Officials previously several of the proposed the changes in January, though official action on them—such as the filing of SF 4782, which is sponsored by Sen. Lindsey Port (D), who led the effort to enact legalization last session—is just beginning. Briner said last month that the agency’s goal would be to begin issuing temporary licenses sometime this summer to be ready for the market launch next year.

Once rules are in place, business will be “able to move quickly,” Briner said this week. “This is really a head start in particular for social equity applicants, and we are very excited about that.”

Gov. Tim Walz (D) said last month that he supports OCM’s proposed changes to strengthen the state’s cannabis social equity provisions, though he wants to avoid the state being sued over equity plans.

Meanwhile, the Department of Natural Resources (DNR) said in a new document this week that the state needs to clarify rules around consuming cannabis on public lands, such as state park picnic areas or campgrounds.

Minnesota’s cannabis law “prohibits an individual from smoking cannabis flower or cannabis products in any location where the smoke or vapor would be inhaled by a child,” the agency said. “However, the law does not clearly address situations where children come and go from a location, such as at a state park picnic area or campground.”

“The DNR is interested in restricting the use of cannabis flower or cannabis derived products in certain areas of DNR-managed public lands where children are present,” it continued. “In addition, the DNR is also seeking to clarify storage requirements on DNR-managed public lands by specifying cannabis flower and cannabis derived products need to be stored in a vehicle or on a person and not left in the open where they could be accessible to a child.”

“This proposal is not intended to infringe upon the legal use of cannabis, but to provide the DNR with the same authority that local governments have to clarify where cannabis can be used on DNR-managed public lands,” DNR said. “The intended results of this proposal are greater clarity for visitors to DNR-managed public lands, reduced potential for visitor conflicts, and enjoyment of the outdoors by both cannabis users and non-users.”

As bureaucrats work to iron out wrinkles in Minnesota’s new cannabis law, a number of Republicans have taken aim at the change more broadly. In addition to GOP elected officials criticizing the equity components of the plan last month, another pair of Republican lawmakers recently warned that cannabis cultivation could put a strain on the state’s electrical system.

“Get ready for blackouts and brownouts. That’s what’s going to happen,” said Sen. Eric Lucero (R), who called growing the plant “unsustainable.”

When the legislature passed the legalization law last year, just five Republican House members and one GOP senator voted for it. Sen. John Jasinski (R) spoke out against proposal, saying it would lead to early retirement for drug-sniffing dogs.

Amid the preparation for the legal market, OCM has made numerous efforts to solicit public feedback, such as by launching a series of public surveys on topics like retail business operations, packaging and labeling, edibles standards and the state’s medical marijuana system. Hundreds of people have replied to each of seven separate surveys put out by the department.

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Additionally, officials have hosted public webinars and met with legislative bodies and outside stakeholders to gather feedback on the legal market’s rollout.

Elsewhere in Minnesota party politics, Democrats recently asked the state Supreme Court to decertify the Legal Marijuana Now Party as a major political party. The Democratic-Farmer-Labor Party says the pro-marijuana party has failed to comply with state election laws.

Ahead of the planned launch of legal sales next year, the city of Osseo is considering whether to open the state’s first municipally run marijuana retailer—a move leaders say would provide more local control over the look, feel and operations of the store.

A city report published earlier this year said officials are currently waiting on the OCM to hire a new director and proceed with opening license applications. If all goes as planned, products would likely be available April 2025, it said.

Minnesota’s cannabis law has already allowed tribes within the state to open marijuana businesses before the state begins licensing traditional retailers, and some tribal governments—including the Red Lake Band of Chippewa Indians, the White Earth Nation and the Leech Lake Band of Ojibwe—have already entered the legal market.

But after a controversy in which a Red Lake Nation Tribal Council member was accused stealing from the store, NativeCare, the tribal government reportedly has pressed pause on cannabis operations.

Adults 21 and older in Minnesota can already legally use, possess and grow marijuana for personal use. In August, however, the governor clarified that homegrown cannabis cannot be sold commercially.

Following legalization, minor violations of possession or home cultivation limits can result in petty misdemeanors, charges some advocates have said should include state-provided legal representation.

Even before Walz signed the reform bill, the state launched a website that serves as a hub for information about the new law. Officials have also already started soliciting vendors to help build a licensing system for recreational marijuana businesses.

Walz has also renewed his search for a top marijuana regulator to lead OCM. In September, the office’s former head, Erin DuPree, a cannabis industry consultant, stepped down after one day of work following a Star Tribune report that her hemp shop allegedly sold illegal products. Lab results reportedly showed elevated THC levels and the presence of banned synthetic ingredients.

Also in September, the Minnesota Supreme Court ruled that the odor of marijuana, on its own, does not establish probable cause for police officers to search a vehicle.

Aside from OCM, another body created by Minnesota’s marijuana law is the Cannabis Expungement Board, which will facilitate record sealing for people with eligible marijuana convictions on their records. The review process for eligible cases began in August. In the meantime, officials recently added a new notice to cannabis criminal history records, essentially letting reviewers know that certain marijuana records that appear on records checks may be pending expungement.

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Photo courtesy of Chris Wallis // Side Pocket Images.