The Economic Boom: How Minnesota’s Cannabis Legalization COULD Transform the Business Landscape

by Business Law0 comments

The Minnesota state legislature made several attention-drawing legal changes in its most recent session. Perhaps the most noteworthy such legislation for current and prospective entrepreneurs was the state’s decriminalization of recreational marijuana. The state’s decriminalization of certain marijuana usages does not mean that it issued a blank check for immediate establishment of facilities to grow and sell it. Prospective business owners looking to enter this field should start their inquiry with a baseline understanding of the complex regulatory framework the state has created.

Cannabis business in Minnesota. Man holding paper bag with Marijuana

Minnesota Cannabis Licensing

First and foremost, all businesses growing, selling, or distributing marijuana will be required to carry a license issued by the newly-created Office of Cannabis Management (OCM). OCM will process applications for and issue numerous license types depending on factors like the business’s 1) size (for example, a single-location retailer will require a different license than a multi-facility medical cannabis grower); and 2) nature (for example, OCM issues different licenses for manufacturers, transporters, and retailers; though one business may hold multiple licenses under certain circumstances). OCM will require all businesses to provide certain organizational and financial documents as part of its license application process. Business owners must understand what type of marijuana operation they intend to run before establishing a new business.

Young farmer checking cannabis plants in the fields before harvesting. Business agricultural cannabis farm.

Financing Marijuna Businesses

The types of available financing poses another factor to consider before starting any marijuana business. Marijuana remains illegal under federal law, which makes many banks apprehensive about providing loans or managing accounts for marijuana businesses. No clear regulations currently provide banks with straightforward rules to shield them from civil or criminal exposure for associating with businesses engaged in the manufacture, transport, or sale of marijuana. This leads to inconsistent and occasionally frustrating policies between different banks (and even sometimes within the same bank). Marijuana entrepreneurs need to know how they will finance their businesses, like the purchase of real estate or equipment, with the understanding that they may not be able to rely on credit from a large banking institution.

Minnesota’s Marijuana law and FDA regulations

Finally, entrepreneurs will still have to ensure that the products they intend to sell comply with federal regulations. The Food and Drug Administration (FDA) retains authority to regulate the composition of edibles and THC-infused beverages. Beverages in particular have proved immensely profitable; but also tricky to navigate with respect compliance with FDA regulations on THC content, permitted marketing, and shifting licensure requirements. Newly-established businesses seeking to sell edible products therefore require a detailed plan to secure compliance with state and federal law.

Flowers from an indoor cannabis grower

Starting a marijuana business in Minnesota

Between staffing and rulemaking processes, the state does not anticipate that the Office of Cannabis Management will begin issuing licenses until the Spring or Summer of 2024. That provides entrepreneurs ample time to develop a plan before submitting a license application. If you are considering starting a new business or amending a current one to enter this potentially lucrative new market, contact Jeddeloh Snyder Stommes to schedule a consultation for your particular circumstances.

Jeddeloh Snyder Stommes – Experienced & Trusted

St Cloud MN Attorneys

St Cloud Attorneys Jeddeloh Snyder Stommes

Call today for your consultation!

St. Cloud (320) 240-9423
Big Lake (763) 262-2889
Cold Spring (320) 348-2001

Minnesota Law Articles

Law archives

No Results Found

The page you requested could not be found. Try refining your search, or use the navigation above to locate the post.