How to Get a Cannabis License in Minnesota: A Quick Guide
Minnesota’s growing cannabis market has lots of opportunities for new business owners, but also many rules to follow. Getting a cannabis license puts you in a good spot in an industry that’s ready to grow fast. But, figuring out the licensing steps and understanding the state’s cannabis laws and regulations can be tricky. Here are the main steps and requirements you need to know to get a cannabis business license in Minnesota. Feel free to ask any questions you might have!
Cannabis License in Minnesota 2024 Update
The State of Minnesota has released details for its first round of adult-use cannabis licensing in 2024. Below is a comprehensive overview of the process, including the types of licenses available, the application method, social equity qualifications, ownership restrictions, municipal controls, and application requirements.
License Types and Fees
The licensing categories and associated application fees are as follows:
- Cultivation: $10,000
- Manufacturing: $10,000
- Microbusiness: $500 (includes 1 dispensary and 5,000 square feet of cultivation)
- Mezzo-business: $5,000 (includes 3 dispensaries and 15,000 square feet of cultivation)
- Testing Facility: $5,000
Number of Licenses Available
There are a total of 194 licenses available in this round:
- Cultivation: 13 licenses
- Manufacturing: 6 licenses
- Microbusiness: 100 licenses
- Mezzo-business: 25 licenses
- Testing Facility: 50 licenses
Application Method
All licenses will be awarded through a random lottery, and all licenses are designated for social equity applicants. The geographic distribution of licenses has not yet been disclosed by the State of Minnesota.
Current Market Status
Currently, Minnesota has:
- 2 licensed and operational dispensaries.
- 2 licensed and operational cultivation or processing facilities.
If all the new dispensary licenses are issued and become operational, Minnesota will have approximately one dispensary per 32,700 residents.
Social Equity License Qualifications
To qualify as a social equity applicant, individuals must meet at least one of the following criteria:
- Conviction for cannabis-related offenses before May 1, 2023.
- Immediate family member convicted of cannabis-related offenses before May 1, 2023.
- Dependent of someone convicted of cannabis-related offenses before May 1, 2023.
- Military veterans, including those who lost honorable status due to cannabis-related offenses.
- Residents for the last five years in areas with disproportionate cannabis enforcement.
- Emerging farmers as defined by Minnesota statutes.
- Residents for the last five years in census tracts with high poverty rates or low median family income.
Out-of-state applicants meeting these criteria are also eligible to apply.
Social Equity License Ownership Restrictions
- A minimum of 65% social equity ownership must be maintained for at least three years post-award.
- Ownership can be transferred only between verified social equity persons within the first three years.
Municipal Control and Real Estate
Real estate is not required at the time of application but must be secured during the 18-month conditional license phase. Local governments can establish buffer zones prohibiting cannabis businesses within specific distances from schools, daycares, residential treatment facilities, and certain park attractions. Local governments cannot opt out of allowing cannabis businesses but may limit the number of licenses based on population.
First-Round License Ownership Restrictions
- Holders of Mezzo-business or Micro-business licenses can only have an interest in one such business and no other license types.
- Cultivation license holders may also hold one manufacturing license, and vice versa. Vertical integration is prohibited in the first round.
Social Equity Application Contents
To qualify as a social equity applicant for a cannabis license in Minnesota, you must submit comprehensive documentation to the regulators. This includes proof of residency in a disproportionately impacted area, evidence of a prior cannabis-related conviction, or verification of low-income status. Additionally, Minnesota wants you to submit all of the following before August 12, 2024 to be included in the social equity lottery.
- Disclosure of Ownership and Control (PDF)
- See information about how to sign PDF documents. This attachment requires either a digital signature or a wet signature (completed with a pen on a printed document, then the signer scans the document into a digital form).
- Capitalization Table (Excel)
- Preliminary Security Plan (PDF)
- Preliminary Business Plan (PDF)
- Attestation of Labor Peace Agreement (PDF) (Updated July 24)
- Preliminary Training and Education Plan for Employees (PDF)
- Preliminary SOP Quality Assurance (PDF)
- Preliminary SOP Inventory Control, Storage, and Diversion Prevention (PDF)
- Preliminary SOP Accounting and Tax Compliance (PDF)
- Operation Plans (by license type)
- Cultivation Plan (PDF) (mandatory for cultivator license types or micro/mezzo licenses seeking a cultivation endorsement)
The State of Minnesota has simplified the application process for this first round, which is exclusively for social equity applicants, to encourage wider participation.
For further details, refer to the Minnesota cannabis licensing regulations here.
Medical Cannabis Program
Minnesota’s Medical Cannabis Program will continue to operate alongside the new adult-use market, with some changes to its regulatory framework. The program’s transition to the Office of Cannabis Management ensures that medical cannabis patients will continue to have access to safe, regulated products through a licensed medical cannabis processor.
As a prospective cannabis entrepreneur, understanding the differences between the medical and adult-use markets and recognizing opportunities in both is beneficial.
Types of Licenses
Minnesota offers several types of cannabis business licenses, including:
- Cannabis Microbusiness: Allows growing, processing, and retailing on a small scale.
- Cannabis Mezzobusiness: Similar to microbusiness but on a larger scale.
- Cannabis Cultivator: For growing cannabis plants and selling to other licensed businesses.
- Cannabis Manufacturer: For processing cannabis into products.
- Cannabis Retailer: For selling cannabis products to consumers.
- Cannabis Wholesaler: For buying and selling cannabis products between businesses.
- Cannabis Transporter: For transporting cannabis products between licensed businesses.
- Cannabis Testing Facility: For testing cannabis products.
- Cannabis Event Organizer: For organizing temporary cannabis events.
- Cannabis Delivery Service: For delivering cannabis products to consumers
Medical Cannabis Licenses
Medical cannabis licenses cater to businesses involved in the production and distribution of medical cannabis products, including medical cannabis combination business, medical cannabis dispensary, and medical cannabis retailer. These licenses, such as those for a medical cannabis cultivator, come with their own set of regulations and requirements, ensuring that patients have access to safe, effective medicine. In recent years, medical marijuana businesses have also emerged, providing similar services to those in the medical cannabis industry.
Securing a medical cannabis license allows access to Minnesota’s expanding patient base, providing imperative relief to those most in need.
Each of these licenses comes with its own set of challenges and responsibilities. It’s crucial to stay updated with the ever-evolving regulations by regularly checking the official Minnesota government pages. As the cannabis industry in Minnesota continues to flourish, ensuring compliance and understanding the nuances of each license type will pave the way for a successful venture.
Application Process and Timeline
The application process for a cannabis license in Minnesota involves several steps, including preparation, submission, and review by the Office of Cannabis Management. As the state concludes its regulations, staying updated and initiating preparations ahead of time is beneficial.
Understanding the application requirements and timeline guarantees your business is ready to commence operations immediately upon license issuance, after paying the initial license fee.
Preparing for the Application
Aspiring cannabis entrepreneurs should start preparing for the application process well in advance, gathering necessary materials and information. This includes:
- Researching the various license types available
- Understanding the state’s cannabis regulations
- Determining the capital needed to launch and operate your business
Being well-prepared heightens the likelihood of successfully obtaining a cannabis license in Minnesota.
Application Submission and Review
The application submission and review process for a cannabis license in Minnesota is a critical step in securing your place in the industry. During this phase, the Office of Cannabis Management will thoroughly assess your business plan, security measures, and compliance with regulations.
A comprehensive, well-prepared application aligned with the state’s requirements significantly enhances your chances of license approval and a successful cannabis business launch.
Licensing Requirements and Scoring Criteria
Licensing requirements and scoring criteria in Minnesota include ownership and residency requirements, as well as provisions for social equity applicants. These factors play a crucial role in determining which businesses receive licenses and contribute to a diverse, equitable, and thriving cannabis industry.
Understanding and fulfilling these requirements enhances your chances of obtaining a cannabis license and positively impacting the local community.
The board shall award points to each completed application in the following categories:
- Status as a social equity applicant
- Status as a veteran applicant
- Security and record keeping
- Employee training plan
- Business plan and financial situation
- Diversity plan
- Labor and employment practices
- Knowledge and experience
- Environmental plan
Ownership and Residency Requirements
To obtain a cannabis license in Minnesota, business entities must meet the following requirements:
- Be at least 75% owned by state residents
- Ensure that the benefits of the cannabis industry are shared with the local community
- Foster a diverse and equitable market
These requirements are in place to promote local involvement and ensure a fair and inclusive cannabis industry in Minnesota.
Fulfilling these ownership and residency requirements not only enhances your chances of obtaining a license and avoiding a renewal license fee, but also showcases your dedication to the welfare of Minnesota’s residents.
Social Equity Provisions
Social equity provisions in Minnesota prioritize applicants from low-income neighborhoods, veterans, and those impacted by cannabis offenses. These provisions help to address the historical injustices of cannabis prohibition and create a more inclusive and diverse industry.
Utilizing these provisions not only enhances your chances of obtaining a cannabis license, but also contributes to a fairer cannabis market in Minnesota.
About the Author
Tom Howard, a Cannabis Industry Lawyer and Consultant has practiced commercial law since 2008 when he graduated from law school and got his Series 7 & 66 Securities licenses. He pivoted to practicing litigation for financial institutions before helping cannabis teams form, capitalize, and get licensed. He has concentrated on the cannabis business since Illinois legalized it in 2019. He won licenses for clients in Illinois, Connecticut, New Jersey, New Mexico, Massachusetts, Missouri and has gotten into lotteries in Ohio, Maryland, and Maine. He became a Certified Ganjier in 2021. He chairs the ISBA’s section council for Cannabis Law in 2023.
