Minnesota Recreational Cannabis Update

The Governor signed twin bills, H.F. 100 and S.F 73, into law on Tuesday May 30, 2023. The bills legalize and regulate the adult-use marijuana market. A newly formed Office of Cannabis Management will be tasked to regulate and license cannabis businesses.

There are 14 different license types total, including a few new medical cannabis license types.

• Cannabis Microbusiness – entitles the license holder to grow, manufacture, and sell cannabis to customers. A cannabis microbusiness that cultivates cannabis at an indoor facility may cultivate up to 5,000 square feet of plant canopy or at an outdoor location of up to one-half acre of mature, flowering plants. A cannabis microbusiness with the appropriate endorsement may operate one retail location.
  • A person, cooperative, or business holding a cannabis microbusiness license may also hold a cannabis event organizer license. No person, cooperative, or business holding a cannabis microbusiness license may own or operate any other cannabis business or hemp business or hold more than one cannabis microbusiness license.

• Cannabis Mezzobusiness – entitles the license holder to grow cannabis plants for use as adult-use AND medical cannabis flower or manufacture for use in adult-use AND medical cannabis products, as well as sell directly to adult-use consumers. A cannabis mezzobusiness that cultivates cannabis at an indoor facility may cultivate up to 15,000 square feet of plant canopy or at an outdoor location of up to one acre of mature, flowering plants. A cannabis mezzobusiness with the appropriate endorsement may operate up to three retail locations.
  • A person, cooperative, or business holding a cannabis mezzobusiness license may also hold a cannabis event organizer license and a medical cannabis retailer license. No person, cooperative, or business holding a cannabis mezzobusiness license may own or operate any other cannabis business or hemp business or hold more than one cannabis mezzobusiness license.

• Cannabis Cultivator – entitles the license holder to grow cannabis plants within the approved amount of space from seed or immature plant to mature plant, harvest cannabis flower from a mature plant, package and label cannabis flower for sale to other cannabis businesses. No more than 30,000 feet of indoor plant canopy or outdoor location may cultivate up to two acres of mature, flowering plants.
  • A person, cooperative, or business holding a cannabis cultivator license may also hold a cannabis manufacturing license, medical cannabis cultivator license, medical cannabis producer license, license to grow industrial hemp, and cannabis event organizer license.
  • No person, cooperative, or business holding a cannabis cultivator license may own or operate any other cannabis business or hemp business.

• Cannabis Manufacturer – entitles the license holder to purchase cannabis flower, cannabinoid products, hemp plant parts, hemp concentrate, and artificially derived cannabinoids from cannabis cultivators, other cannabis manufacturers, cannabis microbusinesses, and industrial hemp growers, to manufacture cannabis infused products.
  • A person, cooperative, or business holding a cannabis manufacturer license may also hold a cannabis cultivator license, a medical cannabis cultivator license, a medical cannabis processor license, and a cannabis event organizer license.
  • No person, cooperative, or business holding a cannabis manufacturer license may own or operate any other cannabis business or hemp business.

• Cannabis Retailer – entitles the license holder to purchase immature cannabis plants and seedlings, cannabis flower, cannabinoid products, and hemp-derived consumer products from other cannabis businesses and sell immature cannabis plants and seedlings, adult-use cannabis flower, adult-use cannabinoid products, hemp-derived consumer products, and other products authorized by law to customers. A cannabis retailer may operate up to 5 retail locations.
  • A person, cooperative, or business holding a cannabis retailer license may also hold a cannabis delivery service license, a medical cannabis retailer license, and a cannabis event organizer license.
  • No person, cooperative, or business holding a cannabis retailer license may own or operate any other cannabis business or hemp business.
  • No person, cooperative, or business may hold a license to own or operate more than one cannabis retail business in one city and three retail businesses in one county.

• Cannabis Wholesaler – entitles the license holder to (1) purchase immature cannabis plants and seedlings, cannabis flower, cannabis products, lower-potency hemp edibles, and hemp-derived consumer products from cannabis microbusinesses, cannabis mezzobusinesses, cannabis cultivators, cannabis manufacturers; (2) purchase hemp plant parts and propagules from industrial hemp growers and processors; (3) sell immature cannabis plants and seedlings, cannabis flower, cannabis products, lower-potency hemp edibles, and hemp-derived consumer products to cannabis microbusinesses, cannabis mezzobusinesses, cannabis manufacturers, and cannabis retailers; (4) sell lower-potency hemp edibles to lower-potency hemp edible retailers; (5) import hemp-derived consumer products and lower-potency hemp edibles that contain hemp concentrate or artificially derived cannabinoids that are derived from hemp plants or hemp plant parts.
  • A person, cooperative, or business holding a cannabis wholesaler license may also hold a cannabis transporter license, a cannabis delivery service license, and a cannabis event organizer license.
  • No person, cooperative, or business holding a cannabis wholesaler license may own or operate any other cannabis business or hemp business.

• Cannabis Transporter – entitles the license holder to transport immature cannabis plants and seedlings, cannabis flower, cannabinoid products, artificially derived cannabinoids, hemp plant parts, hemp concentrate, and hemp-derived consumer products from cannabis cultivators, cannabis manufacturers, cannabis wholesalers, cannabis microbusinesses, medical cannabis retailers, medical cannabis processors, and industrial hemp growers to cannabis manufacturers, cannabis testing facilities, cannabis wholesalers, cannabis retailers, lower potency edible product retailers, medical cannabis processors, and medical cannabis retailers.
  • A person, cooperative, or business holding a cannabis transporter license may also hold a cannabis wholesaler license, a cannabis delivery service license, and a cannabis event organizer license.
  • No person, cooperative, or business holding a cannabis transporter license may own or operate any other cannabis business.

• Cannabis Testing Facility – entitles the license holder to obtain and test immature cannabis plants and seedlings, cannabis flower, cannabinoid products, hemp plant parts, hemp concentrate, artificially derived cannabinoids, and hemp-derived consumer products from cannabis cultivators, cannabis manufacturers, cannabis wholesalers, cannabis microbusinesses, medical cannabis cultivators, medical cannabis processors, and industrial hemp growers.
• Cannabis Event Organizer – entitles the license holder to organize a temporary cannabis event lasting no more than four days.
  • A person, cooperative, or business holding a cannabis event organizer license may not hold a cannabis testing facility license, a lower-potency hemp edible manufacturer license, or a lower-potency hemp edible retailer license.

• Cannabis Delivery Service – entitles the license holder to purchase cannabis flower, cannabinoid products, and hemp-derived consumer products from licensed cannabis retailers, licensed cannabis microbusinesses with an endorsement to sell adult-use cannabis flower and adult-use cannabinoid products to customers, and medical cannabis retailers; transport and deliver cannabis flower, cannabinoid products, and hemp-derived consumable products to customers.
  • A person, cooperative, or business holding a cannabis delivery service license may also hold a cannabis retailer license, a cannabis wholesaler license, a cannabis transporter license, a cannabis event organizer license, and a medical cannabis retailer license subject to the ownership limitations that apply to those licenses.
  • No person, cooperative, or business holding a cannabis delivery service license may own or operate any other cannabis business or hemp business.

Number of licenses for each category will be determined by the Office of Cannabis Management (“Office”). The office shall issue the necessary number of licenses in order to ensure the sufficient supply of cannabis flower and cannabinoid products to meet demand, provide market stability, and limit the sale of unregulated cannabis flower and cannabinoid products.

The state of Minnesota legalized medical cannabis in 2014 through a Legislative Bill, Senate File 2470, which provided a legal way for qualifying patients in the state to access and utilize medical cannabis as a form of treatment for their ailment. Access to medical cannabis is through state licensed businesses that are allowed to grow, manufacture and sell medical cannabis.

• Minnesota Medical Cannabis Manufacturers –are vertically integrated licenses which allow licensees to grow medical cannabis plants; extract, process and produce medical cannabis products such as pills, topicals, liquids, etc.; and dispense medical cannabis to registered patients. There is a limit of two (2) business licenses allowed for Minnesota Medical Cannabis Manufacturers within the state. Each Manufacturer is allowed to operate up to four (4) dispensaries. Both licenses have been issued, the state is no longer issuing anymore Medical Cannabis Manufacturers of this type.

The new adult-use bill referenced above, creates three new license types for medical marijuana businesses including medical cannabis cultivators, medical cannabis processors, and medical cannabis retailers.

• Medical Cannabis Cultivator – entitles the license holder to grow cannabis plants within the approved amount of space up to 60,000 square feet of plant canopy from seed or immature plant to mature plant, harvest cannabis flower from a mature plant, package and label cannabis flower as medical cannabis flower, sell medical cannabis flower to medical cannabis processors and medical cannabis retailers, transport medical cannabis flower to a medical cannabis processor located on the same premises, and perform other actions approved by the office.

• Medical Cannabis Processor – entitles the license holder to:
  • purchase medical cannabis flower, medical cannabinoid products, hemp plant parts, and hemp concentrate from medical cannabis cultivators and other medical cannabis processors;
  • purchase hemp plant parts from industrial hemp growers;
  • make cannabis concentrate from medical cannabis flower;
  • make hemp concentrate, including hemp concentrate with a delta-9 tetrahydrocannabinol concentration of more than 0.3 percent as measured by weight;
  • manufacture medical cannabinoid products;
  • package and label medical cannabinoid products for sale to other medical cannabis processors and to medical cannabis retailers; and
  • perform other actions approved by the office.

• Medical Cannabis Retailer – entitles the license holder to purchase medical cannabis flower and medical cannabinoid products from medical cannabis cultivators and medical cannabis processors and sell or distribute medical cannabis flower and medical cannabinoid products to any person authorized to receive distribution.
• Medical Cannabis Combination Business:
  • Entitles the license holder to perform any or all of the following:
  • grow cannabis plants from seed or immature plant to mature plant and harvest adult-use cannabis flower and medical cannabis flower from a mature plant;
  • make cannabis concentrate and hemp concentrate, including hemp concentrate with a delta-9 tetrahydrocannabinol concentration of more than 0.3 percent as measured by weight;
  • manufacture artificially derived cannabinoids; medical cannabinoid products; adult-use cannabis products, lower-potency hemp edibles, and hemp-derived consumer products for public consumption;
  • purchase immature cannabis plants and seedlings and cannabis flower from a cannabis microbusiness, a cannabis mezzobusiness, a cannabis manufacturer, a cannabis wholesaler, a medical cannabis cultivator, or another medical cannabis combination business;
  • purchase hemp plant parts and propagules from an industrial hemp grower
  • purchase cannabis concentrate, hemp concentrate, and artificially derived cannabinoids from a cannabis microbusiness, a cannabis mezzobusiness, a cannabis manufacturer, a cannabis wholesaler, a medical cannabis processor, or another medical cannabis combination business;
  • purchase hemp concentrate from an industrial hemp processor
  • package and label medical cannabis and medical cannabinoid products for sale to medical cannabis processors, medical cannabis retailers, other medical cannabis combination businesses, and patients enrolled in the registry program, registered designated caregivers, and parents, legal guardians, and spouses of an enrolled patient;
  • package and label adult-use cannabis flower, adult-use cannabis products, lower-potency hemp edibles, and hemp-derived consumer products for sale to customers;
  • sell medical cannabis flower and medical cannabinoid products to patients enrolled in the registry program, registered designated caregivers, and parents, legal guardians, and spouses of an enrolled patient;
  • sell immature cannabis plants and seedlings, adult-use cannabis flower, adult-use cannabis products, lower-potency hemp edibles, hemp-derived consumer products, and other products authorized by law to other cannabis businesses and to customers.
• A medical cannabis combination business may cultivate cannabis to be sold as medical cannabis flower or used in medical cannabinoid products in an area of up to 60,000 square feet of plant canopy.
• A medical cannabis combination business may operate up to one retail location in each congressional district. A medical cannabis combination business must offer medical cannabis flower, medical cannabinoid products, or both at every retail location.
• A person, cooperative, or business holding a medical cannabis combination license is prohibited from owning or operating any other cannabis business or hemp business. A person or business may only hold one medical cannabis combination license.

Number of licenses for each category will be determined by the Office of Cannabis Management (“Office”).

The committee must develop and adopt adult-use rulemaking for the program by July 2025.

Want to learn more?

Visit our state page and schedule a consultation today!

Contact us by phone at 602-290-9424 or via email at info@thecannabisbusinessadvisors.com for more information on how to get started.