Minnesota legalized cannabis for recreational use (in addition to medical use) for adults aged 21 or over in May 2023.
In doing so, the cannabis industry in Minnesota became a fully regulated and taxed industry, which benefits the state and opens up many opportunities for aspiring entrepreneurs looking to enter the industry.
Medical cannabis has been available in Minnesota since 2014 but the decriminalization of recreational cannabis is a major step that was well-received by citizens here.
The free availability of cannabis is not, however, without its critics and it is still illegal at a federal level. Consequently, the industry will be tightly regulated to ensure that businesses toe the line with state and local laws.
Because of the recency of the legislation, we can expect to see it evolve in the coming years as the industry beds down. The experience and insight of a seasoned cannabis attorney are essential if you want to start a cannabis business in Minnesota and remain for the long run.
At Cannabis Law Solutions, we’ve helped many business owners across the country handle the inevitable challenges of forming entities, preparing and applying for licenses and complying with the evolving regulations in states that have recently passed bills to legalize recreational cannabis for adults.
Our comprehensive understanding of Minnesota cannabis law can help you navigate the complex legal landscape here and capitalize on the opportunities in all sectors of the industry.
Cannabis business services
Our experienced cannabis attorneys can assist with the following legal services:
The decriminalization of cannabis in Minnesota opens up opportunities for businesses with valid licenses but this comes with many caveats for personal use. Exceeding certain limits is still illegal and can lead to jail time.
These are the new laws relating to personal use/possession in Minnesota:
Up to 2oz in public
No incarceration, fine or other penalty
Up to 2lbs in a private residence
No incarceration, fine or other penalty
Possession of over 2oz-4oz in public
Petty misdemeanor offense with a $300 fine
Possession of 4oz-1lb in public
Third-degree possession with up to 90 days in jail and a $1,000 fine
Possession of 1lb-2lbs in public
Second-degree possession with up to one year in jail and a $3,000 fine
Possession of 2lbs-10kg in public
First-degree possession with up to five years in jail and a $10,000 fine
Laws for cannabis cultivation in Minnesota
The Minnesota cannabis cultivation laws are as follows:
Up to 8 plants in total (4 mature)
No incarceration, fine or other penalty
9-16 plants in total (4 mature)
A civil penalty only with a fine of $500/plant
Cultivation of cannabis in the second degree with a jail sentence of up to one year and a $3,000 fine
Over 23 plants
Cultivation of cannabis in the first degree with a jail sentence of up to 5 years and a $10,000 fine
Minnesota cannabis license types and fees
Cannabis business license applications will be assessed by the new Office of Cannabis Management, which issues licenses and determines regulations for the adult-use cannabis industry in the state.
Local governments can determine where businesses are allowed to operate in their communities.
Over 15 different license categories have been established by the new adult-use and medical-use cannabis regulations (which include new lower potency hemp regulations).
Following are the details of the licenses and their associated application/license fees:
Note that the application fees are non-refundable. Applicants must be 21 years of age or older and a Minnesota resident.
At present, there is no restriction on the number of licenses that may be issued. Applications are scored according to security, business strength, social equity plans, environmental plans and other factors.
Cannabis microbusiness vs cannabis mezzobusiness
The Minnesota legislation, like in many states that have legalized recreational cannabis use for adults, generally restricts the scope of activities permitted for businesses by license type. So, a cultivator cannot be a retailer or a wholesaler cannot be a transporter, etc.
Two classes of licenses are slightly different though:
Microbusiness: a microbusiness license allows entrepreneurs to cultivate, manufacture and sell marijuana within certain limits on how much can be grown and how many stores can be operated. Current cultivation limits are up to 5,000 square feet of indoor plant canopy or up to one-half acre of mature, flowering plants outside. One dispensary is permitted.
Mezzobusiness: a mezzobusiness license is similar to a microbusiness license but on a larger scale (“mezzo” is Italian for “medium”). The limits on cultivation and dispensing are different. Current cultivation limits are up to 15,000 square feet of indoor plant canopy or up to one acre of mature, flowering plants outside. Three separate dispensaries are permitted.
Cannabis business legal planning, advice and support in Minnesota
At Cannabis Law Solutions, we are familiar with the challenges of obtaining a license and the maze of regulations that new cannabis businesses must comply with.
The expertise of our cannabis business attorneys can help you plan, incorporate, protect and grow a successful cannabis business in Minnesota. We have been supporting cultivators, manufacturers, retailers and other entities for many years.
For informed legal advice, call 866-329-0729 for a consultation with a knowledgeable cannabis attorney at Cannabis Law Solutions.
How will our cannabis and psychedelic business services help you
Cannabis & psychedelics business entity formation
Whether you are looking to form a limited liability company (LLC) or a corporation, our experienced business lawyers can discuss the pros and cons of both and help you incorporate your business with the optimal structure to achieve your goals.
Cannabis & psychedelics business licenses
If you want to run a cannabis or psychedelics business, you will need a valid business license issued by your state authority as well as local permits. Eligibility criteria are likely to be stringent and we can help you navigate the often-complex license application process.
Cannabis & psychedelics corporate documentation
Whether you need to prepare for a license application, transfer of business ownership, change of corporate structure, transfer business location or another business process, we can help you identify and draft the documentation you need to operate legally in your state.
Cannabis & psychedelics administrative law
State authorities watch licensed and unlicensed cannabis and psychedelics businesses closely. If you violate regulations, you could face an administrative penalty. Our attorneys can provide representation or help you prepare for an administrative hearing, settlement conference or appeal.
Cannabis & psychedelics disputes and litigation
Whether you have a dispute with another business, a legal issue with one of your partners or a licensing or administrative issue, you may need legal assistance to help resolve it. We are adept at alternative dispute resolution methods as well as civil litigation.
Cannabis & psychedelics regulatory compliance
As the cannabis and psychedelics industries emerge in states around the U.S., they are more heavily regulated than most other industries. We can help your business navigate the red tape and plan to stay on the right side of the regulatory authorities in whichever state you are based.
McKenzie and her firm were definitely awesome. She was conscientious of my money, and made efforts to let me help to decrease the expense of my case. I was not confident about my chances of success before hiring her, but once I did, I slept so much better. Definitely the best choice (and I met with a few!)
These guys rock!!! Met with McKenzie about an issue I needed some help on. She was honest, professional and gave great direction that was easy to follow and solved the problem! Legal Solutions of New Mexico conduct themselves unlike any other lawyers I’ve ever seen – starting with their website, all the way through to the personal attention they provide! They are direct and get the job done while keeping their clients interests at heart. 10/10 would recommend to anyone needing legal help.
“One of the best for sure”
McKenzie St.Denis is THE best! She’s very thorough and listens to you. She gives the best recommendation based on YOUR needs and wants. She genuinely has the clients best interest at heart—no doubt. I definitely recommend her as she has integrity—super sharp! One of the best for sure. Thank you so much, McKenzie!!!
Opening a successful and legal marijuana dispensary begins with hiring a knowledgeable cannabis attorney and learning all that you can about this industry and the applicable laws. The next step is to set up a corporate business structure and create a retail business plan, which an attorney can also help you with. You will also need to research potential locations for your business to find out where licensing is legal.
Next, obtain the necessary licensing to operate your cannabis business and ensure that your operational infrastructure follows all laws and regulations. If you are not growing or producing your products yourself, you will need to contract with cultivators and product manufacturers to supply your business.
Before you begin the process of applying for a cannabis license, you need to establish a business from which to apply. The state will not consider an application from an individual; instead, the applicant must be a business entity in good standing with the state.
Your business will begin when you choose a legal entity and file the appropriate paperwork with the Secretary of State. After that, you will file with the IRS and obtain a taxpayer identification number.
You would start with articles of incorporation and include other key corporate provisions in the bylaws that state how your company will be governed. If your business is a partnership or limited liability company, you will need an operating agreement. Depending on your line of business, you may also need other licenses to operate.
In addition, you will also need other corporate documents that the Department of Health will want to see when they are considering your cannabis application. Of importance here, your application would ask you to provide:
Your articles of incorporation
Certificate of good standing
An attorney can help you both choose the appropriate business entity and draft and file any necessary documentation. When you are seeking to enter the cannabis field, it is important to get your business formation process right to make the best possible impression on the Department of Health. Doing so will allow you to devote as much time as possible to your cannabis-related business arrangements.
As a precursor to even being able to apply for state approval of your cannabis business, you must have a properly formed business entity. As a result, the first documentation you must file is the documentation establishing your business.
Next, you will need to obtain a tax identification number by registering with the IRS. In addition, the licensing application also asks you to provide your current state business license registration.
Beyond your general business licenses, you would also need specific permission to operate a cannabis business. This involves a very strict registration process where the state will closely scrutinize your application. You can expect the state to review each of the licenses that they request since it wants to be sure that your business complies with laws before they are granted the right to operate in the cannabis industry.
Compliance means making sure that you follow the myriad of laws that apply to your state’s cannabis businesses. Further, the regulatory landscape is fast-changing as the state gains more experience overseeing the businesses.
What this means for you is that knowledge is one of the most important things that you can have. Not only do you need an expert in the current laws, but you also need to be able to anticipate future changes in the law. This means that each business needs an expert who understands the laws and can advise them as to the best means of following them.
Also, compliance also means that you have sound policies and procedures in place that govern your business. The Department of Health is already looking at your policies when they evaluate your initial application. However, they reserve the right to audit and inspect your business to verify that you are complying with the law. You should always be ready for an inspection by documenting how you are following the regulations.
The best way to show compliance is by keeping your paperwork organized and conducting your own internal audits. The Department is interested primarily in your safety procedures, so you should be ready to show how you are following your own procedures. Further, you should always reevaluate your own policies to see if there are any weaknesses or changes that can be made to strengthen them.
The major thing that the Department of Health is interested in is the safety of both the product and the operation. As a baseline, the state wants to know who all of the owners are and the people who will be working in the operation.
While there are common documents among all the application classes that the Department is seeking, there are also special requirements for each of the categories.
For example, when the Department is evaluating a manufacturing application, it will pay close attention to measures that your business takes to ensure proper hygiene and testing methods. The Department also will pay attention to the manufacturer’s procurement practice and the security of its inventory.
With regard to laboratory submissions, the focus is partially on the testing processes and equipment that the business will use. The Department wants technical, scientific details of the exact tests and the quality control that the laboratory will use for testing. The emphasis is on ensuring product safety.
For courier businesses, the Department will scrutinize the safety and security of the delivery process, including the vehicles and the delivery routes that are used. The emphasis is on the safety of qualified patients, primary caregivers, and courier staff in light of the product being delivered. In addition, since there is interaction with patients, the Department wants to see how the applicant plans on protecting patient privacy.
Cannabis legalization often works in a series of steps. Broadly speaking, cannabis policy reform occurs in the following stages:
Prohibition: Criminal penalties apply for the possession or use of cannabis.
Decriminalization: Low-level criminal penalties are removed for cannabis usage (e.g., personal possession) and criminal penalties may be replaced with civil fines.
Medical legalization: Full medical legalization with commercial licensing and testing may come straight away or in a series of stages.
Legalization: State laws are changed to make any cannabis activity a crime no longer. Cannabis must be removed from the Controlled Substances Act and new rules added for the legal commercial cultivation, distribution, testing, and sales of cannabis.
Oregon and Colorado states have decriminalized the use, sale, and possession of psilocybin, which is the active ingredient in “magic mushrooms” and has been shown to have great value in treating certain medical conditions, like depression, anxiety and life-threatening cancers.
Besides these states, the cities of Oakland and Santa Cruz in California as well as Washington, D.C., Somerville, Cambridge and Northampton (Massachusetts) have all decriminalized psilocybin.
It should be noted that all psychedelics are illegal in the United States under federal law and drugs like MDMA, DMT, ketamine, LSD and psilocybin are Schedule 1 controlled substances. This means they are viewed as having no medical purpose and no legitimate commercial application