Minnesota marijuana rollout adding unpopular changes

ST. PAUL, Minn. (FOX 9) - The Minnesota marijuana market is undergoing some unpopular changes before the first licenses even go out.

Legislators fine-tuned cannabis laws Wednesday as the state prepares to roll out its licensing system.

But some potential business owners have questions about fairness and whether they’ll even have anything to sell.

The state is still looking at permanent licenses starting next spring, but the launch is looking a little smoky right now.

The new Minnesota marijuana bill makes a few changes putting dazed smiles on faces.

Low-dose THC drinks could be sold on tap. The Office of Cannabis Management could order recalls of any problematic products. And registered caregivers would be allowed to buy or grow marijuana for medical cannabis patients.

But a lot of potential business owners are confused about the move from a merit-based point system to a lottery determining who gets the first pre-approved licenses.

They’re designed to build the social equity ownership market first — people negatively impacted by previous cannabis laws or living in low-income zip codes.

The new bill reduces the mandatory ownership percentage to qualify as a social equity business from 100% to 65%.

Interim Office of Cannabis Management director Charlene Briner says that addresses some complaints that social equity applicants couldn't easily access the money they need to launch businesses.

The office will vet all the applicants before entering them in a lottery because Briner says the merit-based point system doesn’t seem to work in other states.

"85% of businesses are white-owned and 75% are owned by men," Briner said Friday. "And so in terms of creating the sort of diverse marketplace and opportunity for a broad range of candidates and applicants, we’ve not seen the kind of success."

There have also been legal challenges to point systems.

But some potential business owners warn the lottery won’t make the state immune to lawsuits.

The lottery was part of the original law’s design, but pre-approvals were not.

"Those pre-approvals don’t actually allow people to sell plants or grow plants," said the House bill's author Rep. Zack Stephenson, DFL-Coon Rapids. "It’s just kind of a sign that you will get a license down the road."

Twenty-five of those pre-approved licenses could go to cultivators, but under the current bill, there’s no large-scale source for recreational marijuana when retailers open.

Medical licensees can’t be involved in the recreational business and scaling up to meet demand can’t start until the first permanent licenses go out — possibly in March 2025 or later.

"When we start from the beginning to the end, we’re about 12 to 14 months out, just so everybody understands that," said BeezWax store owner Jeff Taylor. "And there’s no market out there that has opened up and has had too much product, not one in the country so far. So we do need to start cultivating sooner than later."

The new bill does one thing to address a potential shortage of products. It says the Office of Cannabis Management can let cultivators use more space to grow marijuana if the supply isn’t keeping up with demand.