Understanding Minnesota Cannabis License Requirements
The licensing requirements have changed over the past several months in terms of how Minnesota cannabis applications will be handled. Up until recently, the plan was a competitive licensing process, but legislation was recently passed that changed two major things: 1) it moved licensing up to the summer of 2024 for social equity applicants and 2) it changed the MN cannabis licensing process from competitive to what they call a “vetted lottery.” This is a recent trend we’ve also seen in MD and DE. The regulatory agencies seem to think this will help prevent lawsuits, but the downside is that highly experienced applicants might not get a license at all, which is unfair in a different way.
What is a vetted lottery? It’s a lottery where the applicants must qualify by submitting a set of documents showing some level of professional planning capability. In this case, the MN Office of Cannabis Management (OCM) will be asking for the following documentation:
Security and Recordkeeping Plan;
Employee Training Plan;
Business Plan and Financial Situation; (This comes with an additional $2000 charge for 20 pages of custom writing)
Labor and Employment Practices;
Knowledge and Experience; and
Environmental Plan.
So, all in all, the MN cannabis license requirements and Minnesota dispensary license requirements will require some work, but it’s not as hard as many other states have been. The difficulty in MN will be winning the lottery, which there’s nothing you can do to increase your odds. The OCM is putting extra safeguards in place to ensure no one submits multiple MN cannabis applications or games the system in other ways.
WE CAN HELP WITH ALL OF THE ABOVE!
Everyone is currently awaiting more information on the length, format and specific contents the OCM will want to see in the above documents. DE and MD are both using “forms” for their vetted lottery documents, which means strict page limits and specific questions that need to be answered. Because of this method, writing up the documents in advance of having specific guidance could be a waste of time. As an example, we wrote 160 pages for MD licensing, only to have to truncate it to less than 17 pages in the end. Customers who bought the full document sets early wasted thousands of dollars.
The parts that can be started now are the Business Plan and the Knowledge/Experience sections.
How Many MN Cannabis Licenses Will be Available?
The OCM has published the following information about license caps:
For licenses that are available to social equity applicants, the maximum number of
licenses that the office may issue are:
(1) MN cultivator licenses, 19;
(2) MN cannabis manufacturer licenses, 12;
(3) MN cannabis retailer licenses, 100; and
(4) MN cannabis mezzobusiness licenses, 30.
For licenses that are available to all applicants (later), the maximum number of licenses
that the office may issue are:
(1) MN cannabis cultivator licenses, 19;
(2) MN cannabis manufacturer licenses, 12;
(3) MN dispensary licenses, 100; and
(4) MN cannabis mezzobusiness licenses, 30.
(h) Of the available licenses listed above, the following number of licenses
will be available for applicants that notify the office they will apply for a medical retail
endorsement and intend to serve the medical registry market for at least three years:
(1) cannabis mezzobusiness, six; and
(2) MN cannabis retailer, 20.
That’s not very many licenses! That means anyone who wins one will make a ton of money, even if they are relatively inexperienced.
What is a Cannabis Mezzobusiness?
According to the OCM:
A cannabis mezzobusiness license, consistent with the specific license endorsement or endorsements, entitles the license holder to perform any or all of the following within the limits established by this section:
(1) grow cannabis plants from seed or immature plant to mature plant and harvest cannabis flower from a mature plant for use as adult-use cannabis flower or for use in adult-use cannabis products;
(2) grow cannabis plants from seed or immature plant to mature plant and harvest cannabis flower from a mature plant for use as medical cannabis flower or for use in medical cannabinoid products;
(3) make cannabis concentrate;
(4) make hemp concentrate, including hemp concentrate with a delta-9 tetrahydrocannabinol concentration of more than 0.3 percent as measured by weight;
(5) manufacture artificially derived cannabinoids;
(6) manufacture adult-use cannabis products, lower-potency hemp edibles, and hemp-derived consumer products for public consumption;
(7) process medical cannabinoid products;
(8) purchase immature cannabis plants and seedlings and cannabis flower from a cannabis microbusiness, another cannabis mezzobusiness, a cannabis manufacturer, or a cannabis wholesaler;
(9) purchase cannabis concentrate, hemp concentrate, and synthetically derived cannabinoids from a cannabis microbusiness, another cannabis mezzobusiness, a cannabis manufacturer, or a cannabis wholesaler for use in manufacturing adult-use cannabis products, lower-potency hemp edibles, or hemp-derived consumer products;
(10) purchase hemp plant parts and propagules from a licensed hemp grower licensed under chapter 18K;
(11) purchase hemp concentrate from an industrial hemp processor licensed under chapter 18K;
(12) package and label adult-use cannabis flower, adult-use cannabis products, lower-potency hemp edibles, and hemp-derived consumer products for sale to customers;
(13) 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; and
(14) perform other actions approved by the office.
(a) A cannabis mezzobusiness that cultivates cannabis at an indoor facility may cultivate up to 15,000 square feet of plant canopy. The office may adjust plant canopy limits upward to meet market demand consistent with the goals identified in section 342.02, subdivision 1.
(b) A cannabis mezzobusiness that cultivates cannabis at an outdoor location may cultivate up to one acre of mature, flowering plants unless the office increases that limit. The office may increase the limit to no more than three acres if the office determines that expansion is consistent with the goals identified in section 342.02, subdivision 1.
How Much Will a Minnesota Dispensary License Cost?
Of course the cost of starting a cannabis business in MN is much higher than the actual licensing fees, but if you want to know the specific fees to be paid to the OCM, that information is here:
- MN cannabis microbusiness (application fee $500; no initial license fee; renewal license fee $2,000)
- MN cannabis mezzobusiness (application fee $5,000; initial license fee $5,000; renewal license fee $10,000)
- MN cannabis cultivation license (application fee $10,000; initial license fee $20,000; renewal license fee $30,000)
- MN cannabis manufacturer (application fee $10,000; initial license fee $10,000; renewal license fee $20,000)
- MN Dispensary license (application fee $2,500; initial license fee $2,500; renewal license fee $5,000)
- MN cannabis wholesaler license (application fee $5,000; initial license fee $5,000; renewal license fee $10,000)
- MN cannabis transporter license (application fee $250; initial license fee $500; renewal license fee $1,000)
- MN cannabis testing facility (application fee $10,000; initial license fee $10,000; renewal license fee $20,000)
- MN cannabis event organizer (application fee $750; initial license fee $750)
- Cannabis delivery service (application fee $250; initial license fee $500; renewal license fee $1,000)
- Lower-potency hemp edible manufacturer (application fee $250; initial license fee $1,000; renewal license fee $1,000)
- Lower-potency hemp edible retailer (application fee $250 per retail location; initial license fee $250 per retail location; renewal license fee $250 per retail location)
- Medical cannabis cultivator (application fee $250; no initial license fee; no renewal license fee)
- Medical cannabis processor (application fee $250; no initial license fee; no renewal license fee)
- Medical cannabis retailer (application fee $250; no initial license fee; no renewal license fee)
- Medical cannabis combination business (application fee $10,000; initial license fee $20,000; renewal license fee $70,000)
What Are the Costs of a Minnesota Dispensary License Beyond Just Licensing?
In terms of the MN cannabis license cost, plan to spend between $250k and $500k, depending on the cost of your facility, its size and how much you spend on branding and decor. You’ll also have to have money for security systems, inventory, labor and lots of other smaller equipment items and supplies.
Minnesota Cultivation License – Because You Want an MN Grow License
Cultivation is the most difficult and most expensive of the cannabis licensing types. It takes lots of experience to grow world class cannabis because so many things can go wrong with biological beings. They don’t behave predictably, and there are many environmental factors that must be balanced to get the most out of them. You have to get to know your media, your fertilizers, your genetics, and also avoid bugs and diseases. In an open market, such as California, only the strong cultivators survive. In a limited-license environment, less experienced growers can still sell their products. The earlier you get into the industry, the easier it will be to succeed with a Minnesota grow license.
Expect to spend about $400 per square foot building out a pre-existing warehouse. This cost is due primarily to all of the environmental equipment needed to offset heat and moisture and contamination in a cultivation facility. You really need to create and maintain lab-like sanitary conditions, but with massive amounts of cooling, drying and air purification. So the cost of a cultivation license in Minnesota isn’t high for the license itself; it’s high for the development of the facility.
What Are the Qualifications for Social Equity?
An applicant qualifies as a social equity applicant if the applicant:
(1) was convicted of an offense involving the possession or sale of cannabis or marijuana
prior to May 1, 2023;
(2) had a parent, guardian, child, spouse, or dependent who was convicted of an offense
involving the possession or sale of cannabis or marijuana prior to May 1, 2023;
(3) was a dependent of an individual who was convicted of an offense involving the
possession or sale of cannabis or marijuana prior to May 1, 2023;
(4) is a woman who operates a women-owned business as defined in section 116J.8737,
subdivision 1, paragraph (n);
(5) is a military veteran, including status as a service-disabled veteran, current or
former member of the national guard, or;
(6) any military veteran or current or former member of the national guard who lost
honorable status due to an offense involving the possession or sale of cannabis or marijuana;
(7) has been a resident for the last five years of one or more subareas, such as census
tracts or neighborhoods, that experienced a disproportionately large amount of cannabis
enforcement as determined by the study conducted by the office pursuant to section 342.04, paragraph (b), and reported in the preliminary report, final report, or both; is an emerging farmer as defined in section 17.055, subdivision 1; or
(8) has participated in the business operation of a farm for at least three years and
currently provides the majority of the day-to-day physical labor and management of a farm that had gross farm sales of at least $5,000 but not more than $100,000 in the previous year;
or
(9) has been a resident for the last five years of one or more census tracts where, as
reported in the most recently completed decennial census published by the United States
Bureau of the Census, either:
(i) the poverty rate was 20 percent or more; or
(ii) the median family income did not exceed 80 percent of statewide median family
income or, if in a metropolitan area, did not exceed the greater of 80 percent of the statewide median family income or 80 percent of the median family income for that metropolitan area.
(b) The qualifications described in paragraph (a) apply to each individual applicant or,
in the case of a business entity, every cooperative member or director, manager, and general partner apply to at least 65 percent of the controlling ownership of the business entity.
Contact Us Today to Get Started!
