Cannabis agency drops plans for licensing fast track, early 2025 retail launch in Minnesota grows doubtful

Minnesota’s nascent marijuana market is likely to take longer to launch — both getting plants into the ground and products into approved stores — as state regulators announced revamped plans for granting licenses.

The new setup outlined Wednesday will push key decisions into late spring or early summer of next year. That seemingly takes off the table an early 2025 launch to retail sales that had been the working goal.

“This was certainly not an outcome that we were hoping would materialize,” Office of Cannabis Management interim director Charlene Briner said on a call presenting the change. “And we know that today's path forward does not provide a perfect solution, but I'm hoping that they will take some comfort in seeing that there is a clear path forward.”

Minnesota lawmakers legalized cannabis beginning in August 2023, but initially only allowed for homegrown marijuana for personal use. American Indian tribes within Minnesota’s boundaries have gone ahead with retail sales on reservations, but broader sales beyond that haven’t been permitted.

There will now be two lotteries next year for full-fledged cannabis business licenses — one for social equity applicants and another for general applicants. The window to get into each will vary, but the lottery won’t be held until May or June, under the revised guidance.

The Office of Cannabis Management had hoped to hold a lottery ahead of Thanksgiving for preapproved licenses that would be awarded to social equity applicants. But that ran into litigation from applicants denied entry into the lottery, which was put on hold by a judge pending further court review.

Social equity applicants are businesses run by people in communities harmed by past prohibition, those personally affected by low-level prosecution, and military veterans, among other select groups. The licenses would become operational once a set of rules governing the industry are adopted, but those preauthorizations would have allowed a running start. 

Briner wouldn’t commit Wednesday to a set date or window for a launch of the retail market. She said some successful license applicants will be doing a lot of legwork in the leadup to a final decision on their status.

“People could move forward with this in a matter of weeks or even months, right?” Briner said.

She added that the earlier lottery would have smoothed things out. 

“Remember, the preapproval process was as much about allowing applicants some certainty to be able to secure financing, to get a building in place and to make all of those other business decisions,” Briner said.

The changes leave prospective business owners uncertain of the future.

Lynn Wachtler runs The North Bloom Magazine, a cannabis lifestyle magazine. She also has a small business selling medically-oriented hemp products. She says the changes are tricky to navigate for businesses.

“With the timeline being pushed back it just raises a lot of questions for folks, my business included, of how to move forward. It sort of feels like treading water,” Wachtler said on Minnesota Now.

The prior lottery plan prompted a series of lawsuits from applicants who contend they weren’t given clear information about why they were turned back. In their court petitions, they said they should have been given a chance to correct any problems with applications or plead their case if they were accused of improper actions.

Filings from the state suggest that some applicants were suspected of being fronts for otherwise ineligible applicants with deeper pockets, a description some of the denied applicants pushed back on.

In a joint statement, two lawmakers who were instrumental in writing the 2023 law said the change to the licensing timeline frustrated them and they placed the blame on those who might have been out to game the system.

“The few bad actors who flooded the preapproval pool with duplicate or misleading applications have delayed the process for those who followed the rules, erasing the opportunity for social equity applicants to get their head start,” Sen. Lindsey Port and Rep. Zach Stephenson, both DFLers, said in a written statement.

Others who were deemed eligible to compete for nearly 300 preapproved licenses also went to court Wednesday to ask that the lottery be held under the original specifications.

It’s not clear what Wednesday’s announcement will mean for the various lawsuits now before the Minnesota Court of Appeals.

Minnesota’s marijuana law requires the cannabis regulatory office to authorize enough licenses “in order to ensure the sufficient supply of cannabis flower and cannabis products to meet demand, provide market stability, ensure a competitive market and limit the sale of unregulated cannabis flower and cannabis products.”

That way, lawmakers reasoned, there would be less room for a black market of illegally grown marijuana to prosper.

“Minnesota is still on the road to a robust, fair recreational cannabis market, and we are proud of the Office of Cannabis Management’s efforts to uphold our state’s values,” Port and Stephenson added in their statement.

Minnesota Now host Nina Moini contributed to this story.

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