What is the compelling state of the cannabis industry in Minnesota today?

NOTE: This article will NOT contain information or comments on the ongoing conversations about the corruption during this process regarding the special committee that was formed by the Governor early in 2024, or attached advocate groups/applicants' stuff on social media. This is to give a general overview. Please refer any comments to the author, Carp @ CarpfishCreative.com

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The Minnesota 🏴‍󠁵󠁳󠁭󠁮󠁿 cannabis industry is currently in a transitional phase, marked by the formal adoption of rules 📜 for the adult-use market and the beginning of the licensing process 📄✅, alongside established medical ➕⚕️ and hemp-derived cannabis sectors.

Adult-Use Cannabis Market Launch 🌿

• Rules Adopted: The rules governing Minnesota's adult-use cannabis market were officially adopted and became effective on April 14, 2025, after being published in the State Register 📜. This followed approval by an administrative law judge on April 2, 2025.

• Licensing Begins: The adoption of these rules allows the Office of Cannabis Management (OCM) 🏢 to begin issuing business licenses 📄 to applicants who have completed all requirements ✅. The adult-use licensing framework was previously in a premarket phase, with the market launch anticipated in early 2025.

• Social Equity Focus: A key aspect of the rollout is prioritizing social equity applicants ⚖️. Over 600 social equity applicants who advanced from a license preapproval process in the fall of 2024 are first in line to receive licenses after completing requirements like background checks, labor peace agreements, and local government approvals.

Licensing Framework 📄

• License Types: Minnesota Statutes Chapter 342 establishes ten types of cannabis business licenses: microbusiness, mezzobusiness, cultivator 🌱, manufacturer, retailer 🛍️, wholesaler, transporter 🚚, testing facility 🔬, delivery service 📦, and medical combination business ⚕️🌿. Lower-potency hemp licenses and event licenses will be available later.

• Initial License Caps: Before July 1, 2026, the OCM may issue a limited number of licenses 📊 for certain types: 50 cultivator, 24 manufacturer, 150 retailer, and 100 mezzobusiness licenses. Half of these capped licenses are specifically reserved for verified social equity applicants ⚖️.

• Uncapped Licenses: Licenses for microbusinesses, wholesalers, transporters, testing facilities, delivery services, and medical combination businesses do not have statutory limits.

• Application Process: An initial application window for general licenses closed on March 16, 2025. Applications are reviewed on a qualified/unqualified basis. For capped license types, qualified applicants will be entered into lotteries 🎟️ scheduled for the summer of 2025. Qualified social equity applicants not selected in the initial dedicated lottery will get a second chance in a subsequent lottery with general applicants. Nearly 200 pre-approved applicants for uncapped license types are positioned to receive licenses shortly ✅. The OCM had numerous issues in holding this system, with many choosing not to apply at all. Over 3500 people applied for a limited number of licenses, with official awards with licenses in hand, maybe as early as June 2025? We'll see. L

• Municipal Store Clarification: Cities and counties can establish, own, or operate a single municipal cannabis store 🏪. These licenses are not subject to statewide caps or local limits on retailer numbers. Regardless of what the city officials might be telling possible applicants.

Existing Cannabis Markets

• Hemp-Derived Products: OCM oversees the existing market for hemp-derived cannabinoid products. Over 4,500 registered businesses are selling these products in Minnesota. OCM has focused on education and inspections to improve compliance, with rates increasing from 35% in Q1 2024 to 87% in early December 2024 👍. This established lower-potency hemp edible market is expected to influence the dynamics of the new adult-use market.

• Medical Cannabis ➕⚕️: The state's medical cannabis program transitioned from the Department of Health to OCM oversight on July 1, 2024. It continues under existing regulations, with two licensed medical manufacturers operating 16 retail locations. Provisions exist for medical cannabis combination business licenses, allowing operations in both medical and adult-use sectors. Senator Nolan was sent (R) back about two weeks ago and was found to have taken large political donations from big medical CEOs, shooting down the bill to greatly increase Minnesota's medical cannabis canopy limits.

• Cannabusiness a go? 👍Minnesota's OCM department has begun giving the go-ahead for the original SEA applicants, a process that started around mid-February 2024. Carpfish Creative is happy to be working with a number of these applicants in various areas of their rollouts, working with: retail, micro, mezzo, cultivation, delivery, transport, testing, and manufacturing clients. We hope to catch up with the remaining folks over the last week of the month. If you need help in any areas, the Creative Network is here to help.

• Training the Market: This seems to be a growing concern with applications in the market. The OCM seems to be very far behind on this process and not well equipped in terms of staff (not their fault). Our Creative Network and many others were looking to step in and fill the void through numerous grants, however, that process and setup wouldn't work for cannabis training support firms, including Carpfish Creative. We will still be hosting the Ready. Set. Launch. event in June, for FREE. Thanks to all those who are preregistering, space is limited due to the event space. More updates to that launch are coming soon. However, beyond that, we will work directly with our clients on the rollout with our partner network. There will also be a free Q/A on HR: Hiring, Onboarding and Training, dropping in May. Join the network to stay updated. There are three tiers, and registration is simple.

• Testing the Market: Another major concern at this point, that not many updates coming from the OCM at all on this topic. We were happy to work with Earl Giles Canna Club to address these issues and others with Hanna at the OCM, who oversees it, but there is only so much she can do. Seems issues remain from the top. There will be a follow-up article piece from our partner friends @ Smarti-Plantz, dropping soon.

• Opening Market Supply/Demand Shortages: Also, another hot topic is the ongoing delays to the SEA applicants and other small business owners waiting to get started. We look forward to upcoming articles posted by the Minnesota community on projected figures.

Consumer Demand 📈

• A 2023 study, updated for 2025, indicated robust cannabis demand 🌿 in Minnesota, with consumption slightly above the national average.

• Key findings include:

  • 40% of past-year consumers used cannabis daily or almost daily 💨.

  • Consumption patterns (flower 🍁, edibles 🍬, vapes, concentrates) mirrored national trends. With THC sales overtaking alcohol for the first time in Minnesota's History. (See Top Ten Liquor for lots of market updates).

  • 25% reported home cultivation 🌱🏡.

  • Significant use of alternative cannabinoids like CBD and delta-8 THC was reported.

  • Cannabis was primarily obtained from dealers (17.6%), friends/family (16.6%), or existing lower-potency hemp retailers (16.1%) 🛍️.

The Office of Cannabis Management 🏢 continues to develop the operational and regulatory systems needed to fully launch and oversee a safe and equitable adult-use cannabis industry while managing the existing medical and hemp-derived markets.

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