SF4540 (Legislative Session 94 (2025-2026))
Cannabis business license and endorsement provisions modification
Related bill: HF4398
AI Generated Summary
Purpose
- The bill updates Minnesota law to regulate cannabis businesses more tightly by adding new licenses/endorsements, expanding penalties for violations, and tightening eligibility rules. It focuses on edible products, cultivation, manufacturing, and related enforcement, with an emphasis on licensing transparency, social equity considerations, and safety standards.
Key Provisions
Edible cannabinoid product handling
- Creates an edible cannabinoid product handler endorsement for licensees who manufacture, process, sell, handle, or store edible cannabis products or certain hemp edibles.
- The endorsement is issued by the licensing office (in consultation with the agriculture department) and follows food-handling rules, but it does not require a separate license.
- Eligibility for the endorsement is limited to current license holders; no fee is charged; the endorsement term aligns with the related license.
- Endorsement restrictions include prohibiting edible cannabinoid product manufacturing at the same premises as general food manufacturing, except for limited development sampling or testing (and this does not apply to lower-potency hemp edibles).
- Endorsement is available to cannabis microbusinesses, cannabis mezzobusinesses, cannabis manufacturers, lower-potency hemp edible manufacturers, and medical cannabis combination businesses.
Civil penalties and enforcement
- Adds civil penalties for selling cannabis flower, cannabis products, lower-potency hemp edibles, or hemp-derived products without a license, with tiered fines based on quantity/value (ranging from a few thousand to up to $1,000,000, plus three times the retail value in some cases).
- Penalties exist for selling cannabis concentrates without a license (also with tiered amounts up to $1,000,000).
- Penalties for importing or selling products infused with THC without proper license, with tiered amounts up to $1,000,000.
- A separate penalty applies for growing more cannabis plants than allowed (up to $500 per excess plant).
- The office may consider possession of excess cannabis or concentrate as evidence of intent to sell.
Licenses, transfers, and social equity
- Transfers: licenses under the general category may be transferred with prior written office approval unless certain conditions apply; social equity licenses may only transfer to another social equity applicant for three years, after which transfers may occur to any entity with approval and oversight by the Division of Social Equity.
- Preliminary license approvals cannot be transferred.
- New licenses must be obtained if the licensee changes the form of the business entity or undergoes major reorganizations, bankruptcy, or asset transfers; licenses must be renewed annually.
- License holders may petition to adjust the license tier within a category if they meet requirements.
- The office may permit relocation of licensed cannabis businesses (cultivation, manufacturing, processing, or retail), with a relocation application process and a review, capped by a relocation review fee not to exceed $250; relocation does not extend the license term.
Disqualifications and disciplinary framework
- The office may disqualify individuals with certain felony convictions or other serious offenses from obtaining or holding a cannabis license, with rules to avoid automatic disqualification for certain minor mistakes.
- The bill adds a prohibition on issuing licenses to anyone convicted of illegally selling cannabis after August 1, 2023 unless five years have passed, with a potential set-aside if the violation was a good-faith mistake and did not involve gross negligence or harm.
- The office cannot issue licenses to those who were fined under section 342.09, subdivision 6.
- The office may consider civil or regulatory violations from other states when determining disqualifications, and may release relevant data to assist decision-making.
- The true party of interest who owns more than 10% of a revoked cannabis or hemp business may face a longer disqualification period.
Administrative penalties and enforcement tools
- The office can issue administrative orders for violations, detailing deficiencies and deadlines to correct them, with a process for reconsideration.
- For each violation, the office may impose monetary penalties (up to $10,000 per violation).
- Penalties can be recovered via civil action in state district court.
- Presence of regulated products on the premises during retail operations can be used as evidence of intent to sell.
Endorsements for cultivation and product manufacturing
- Cultivation endorsement requirements apply to certain license holders (cannabis microbusinesses, cannabis mezzobusinesses, cultivators, medical cannabis combination businesses).
- Cultivation records must be kept for each batch for at least five years, including details about pesticides, fertilizers, soil amendments, and other inputs.
- Cultivation inputs must comply with pesticide and fertilizer laws; pollinator protection rules apply, and pesticides must not be applied when pollinators are present or when drift could reach pollinator-friendly flowering plants.
- Cultivation plans must cover water use, recycling, waste disposal, and pest management using integrated pest management principles.
- Products and cultivation activities must not adulterate cannabis by altering color, weight, potency, or odor.
- Indoor or outdoor cultivation is allowed, but subject to security and facility requirements (security fencing, lighting, etc.).
Manufacturing endorsements and product controls
- Manufacturing endorsements are available to cannabis microbusinesses, cannabis mezzobusinesses, cannabis manufacturers, and medical cannabis combination businesses.
- All manufacturing operations must occur in an enclosed, locked facility dedicated to cannabis products (with limited sharing allowed with other license types in some cases), using equipment dedicated to cannabis product manufacturing.
- Endorsed manufacturers must meet packaging, labeling, health, and safety requirements.
- A production-of-consumer-product endorsement prohibits manufacturing, importing, or selling cannabinoid products that use an electronic delivery device with an embedded or inseparable battery.
Additional technical and regulatory details
- License term alignment across endorsements, and the option to relocate licensed premises with associated processing.
- Provisions around agricultural inputs, pollinator protection, and prohibition of adulteration to ensure product integrity and consumer safety.
- Data sharing provisions to support regulatory decisions, while protecting sensitive information.
How This Changes Current Law
- Adds new endorsement programs (edible cannabinoid product handler endorsement; cultivation endorsement; manufacturing/product endorsements) that tie closely to existing licenses.
- Introduces comprehensive civil and administrative penalties for license violations, sales without proper licensing, and improper import/export or product composition.
- Tightens transfer rules, especially for social equity licenses, and introduces more explicit requirements around license transfers and relocations.
- Expands eligibility and disqualification criteria for licensees, incorporating past violations and cross-jurisdictional records.
- Establishes detailed cultivation and manufacturing compliance rules (records, inputs, pest control, pollinator protection, and security).
- Sets stricter rules on product safety (no adulteration, packaging, labeling, and restrictions on certain device types with embedded batteries).
Significant Changes to Existing Law
- Introduction of edible cannabinoid product handler endorsements with alignment to license terms.
- New tiered civil penalties and enforcement mechanisms for a broad range of cannabis-related activities without proper license.
- Structured transfer rules and a three-year window restricting social equity license transfers.
- Expanded disqualification and data-sharing provisions to support licensing decisions.
- Mandatory cultivation and manufacturing operating plans, records, and inputs controls, including environmental and pollinator protections.
- Prohibition on certain cannabinoid products that use electronic devices with embedded batteries.
Practical Implications
- Businesses will need to obtain and maintain multiple endorsements tied to their licensed activities (edible handling, cultivation, manufacturing).
- Compliance burden increases with detailed recordkeeping, environmental controls, pest management, pollinator protection, and security requirements.
- Stronger enforcement could affect smaller operators, with higher penalties for violations or lack of licensing.
- Social equity license transfers become more limited in the initial years, potentially affecting ownership changes.
Relevant Terms - edible cannabinoid product handler endorsement - edible cannabinoid product handler endorsement eligibility - edible cannabis product - lower-potency hemp edible - cannabis microbusiness - cannabis mezzobusiness - cannabis manufacturer - medical cannabis combination business - social equity license - license transfer - Division of Social Equity - relocation of licensed premises - cultivation endorsement - cultivation records - pesticides - integrated pest management - pollinator protection - agricultural chemicals inputs - adulteration - indoor cultivation - outdoor cultivation - cannabis concentrate - tetrahydrocannabinol (THC) - cannabinoid products - electronic delivery device with embedded battery - licensing penalties - administrative order - civil penalties - criminal penalties - regulatory offenses - data sharing between agencies - final site inspection - license renewal - tiered penalties - plant growth beyond limits - packaging and labeling rules
Bill text versions
- Introduction PDF PDF file
Upcoming committee meetings
- Commerce and Consumer Protection on: March 24, 2026 12:30
Actions
| Date | Chamber | Where | Type | Name | Committee Name |
|---|---|---|---|---|---|
| March 17, 2026 | Senate | Action | Introduction and first reading | ||
| March 17, 2026 | Senate | Action | Referred to | Commerce and Consumer Protection |
Citations
[
{
"analysis": {
"added": [
"Creates an edible cannabinoid product handler endorsement for license holders who manufacture, process, sell, handle, or store edible cannabis products or lower-potency hemp edibles.",
"Requires the office to establish and regulate the endorsement in coordination with the Commissioner of Agriculture.",
"Aligns endorsement rules with food-handling standards in Chapters 28A, 31, and 34A, with specified exceptions.",
"Limits eligibility for endorsements to license holders and prohibits licensing of endorsement issuance fees."
],
"removed": [],
"summary": "Adds an edible cannabinoid product handler endorsement to the existing license framework.",
"modified": [
"Renames/expands 342.07(3) to implement the endorsement framework for edible cannabinoid products."
]
},
"citation": "342.07",
"subdivision": "subdivision 3"
},
{
"analysis": {
"added": [
"Authorizes civil penalties for selling cannabis flower/products, lower-potency hemp edibles, or hemp-derived products without a license.",
"Establishes tiered penalties based on quantities and values for cannabis flower, concentrates, and infused products.",
"Incorporates penalties for exceeding license limits and for importing/selling THC-infused products without a license."
],
"removed": [],
"summary": "Creates civil penalties for unlicensed sale of cannabis products and related items.",
"modified": []
},
"citation": "342.09",
"subdivision": "subdivision 6"
},
{
"analysis": {
"added": [
"Authorizes the office to determine by rule whether felony convictions disqualify a person from cannabis licensing.",
"Prohibits issuing licenses to individuals convicted of illegally selling cannabis after August 1, 2023 unless five years have passed since the conviction.",
"Allows the office to set aside a violation if caused by a good-faith mistake and not involving gross negligence or harm."
],
"removed": [],
"summary": "Criminal-offense disqualifications and licensing eligibility rules.",
"modified": []
},
"citation": "342.15",
"subdivision": "subdivision 2"
},
{
"analysis": {
"added": [
"Permits disqualification for civil/regulatory violations by other state/local jurisdictions.",
"Allows release of civil investigative data (with limited exceptions) to aid licensing determinations.",
"Gives the office authority to set the length of disqualification for true parties of interest owning >10% of a cannabis/hemp business revoked by the office."
],
"removed": [],
"summary": "Civil/regulatory-offense disqualifications and data-sharing related to licensing.",
"modified": []
},
"citation": "342.15",
"subdivision": "subdivision 5"
},
{
"analysis": {
"added": [
"Authorizes administrative orders for licensed cannabis/hemp businesses that commit violations.",
"Imposes monetary penalties up to 10,000 per violation.",
"Allows penalties to be recovered in civil actions and permits orders to be challenged via reconsideration."
],
"removed": [],
"summary": "Enforcement penalties and procedures for violations; administrative orders and civil penalties.",
"modified": []
},
"citation": "342.19",
"subdivision": "subdivision 5"
},
{
"analysis": {
"added": [
"Requires a cannabis cultivation endorsement for those seeking to cultivate cannabis.",
"Lists eligible license holders: cannabis microbusinesses, cannabis mezzobusinesses, cultivators, and medical cannabis combination businesses."
],
"removed": [],
"summary": "Cultivation endorsement requirement; eligibility of endorsement holders.",
"modified": []
},
"citation": "342.25",
"subdivision": "subdivision 1"
},
{
"analysis": {
"added": [
"Mandates cultivation records for each batch of cannabis plants and cannabis flower.",
"Records must include quantities and timing of pesticides, fertilizers, soil amendments, and other inputs.",
"Requires retention of records for at least five years and availability for inspection upon request."
],
"removed": [],
"summary": "Cultivation batch records and recordkeeping.",
"modified": []
},
"citation": "342.25",
"subdivision": "subdivision 2"
},
{
"analysis": {
"added": [
"Authors rules governing pesticides, fertilizers, soil amendments, and other inputs in consultation with the Commissioner of Agriculture.",
"Imposes pollinator protection measures to avoid applying pesticides when pollinators are present and to prevent drift to pollinator-attractive plants."
],
"removed": [],
"summary": "Regulation of agricultural chemicals and inputs; IPM and pollinator considerations.",
"modified": []
},
"citation": "342.25",
"subdivision": "subdivision 3"
},
{
"analysis": {
"added": [
"Requires an operating plan and cultivation plan addressing water usage, recycling, waste disposal, and a pest-management protocol aligned with integrated pest management."
],
"removed": [],
"summary": "Cultivation plan requirements.",
"modified": []
},
"citation": "342.25",
"subdivision": "subdivision 4"
},
{
"analysis": {
"added": [
"Mandates compliance with pesticide/fertilizer/soil amendment and plant amendment laws and rules; reinforces pollinator protections."
],
"removed": [],
"summary": "Cross-cutting agricultural chemical and pollinator protections.",
"modified": []
},
"citation": "342.25",
"subdivision": "subdivision 5"
},
{
"analysis": {
"added": [
"Prohibits adulterating cannabis plants or flowers with substances intended to alter color, appearance, weight, potency, or odor."
],
"removed": [],
"summary": "Adulteration prohibition in cultivation endorsements.",
"modified": []
},
"citation": "342.25",
"subdivision": "subdivision 6"
},
{
"analysis": {
"added": [
"Authorizes cultivation indoors or outdoors with security fencing, lighting, and other requirements imposed by the office."
],
"removed": [],
"summary": "Indoor/outdoor cultivation and security requirements.",
"modified": []
},
"citation": "342.25",
"subdivision": "subdivision 7"
},
{
"analysis": {
"added": [
"Endorsements for manufacturing cannabis products or related outputs are required, per subdivisions 3 and 4."
],
"removed": [],
"summary": "Endorsement applicability for cannabis product manufacturing.",
"modified": []
},
"citation": "342.26",
"subdivision": "subdivision 1"
},
{
"analysis": {
"added": [
"Manufacturing must take place in an enclosed, locked facility used exclusively for manufacturing activities; shared spaces permitted only under defined circumstances with other license types."
],
"removed": [],
"summary": "All manufacturing must occur in enclosed, locked facilities; exclusive-use and related requirements.",
"modified": []
},
"citation": "342.26",
"subdivision": "subdivision 2"
},
{
"analysis": {
"added": [
"Applies endorsement requirements to license holders seeking to create cannabis products and related outputs."
],
"removed": [],
"summary": "General applicability of manufacturing-related endorsements.",
"modified": []
},
"citation": "342.27",
"subdivision": "subdivision 1"
},
{
"analysis": {
"added": [
"Office may permit relocation of a licensed cannabis business and adopt related submission standards and fees (up to 250).",
"Relocation does not extend the license term."
],
"removed": [],
"summary": "Relocation of licensed premises—endorsement and process.",
"modified": []
},
"citation": "342.28",
"subdivision": "subdivision 6"
},
{
"analysis": {
"added": [
"Continuation of relocation-related licensing considerations and procedures; further rulemaking."
],
"removed": [],
"summary": "Continued framework for relocation-related requirements.",
"modified": []
},
"citation": "342.28",
"subdivision": "subdivision 7"
},
{
"analysis": {
"added": [
"Civil penalties for importing or selling THC-infused products without license, with tiers by total THC content."
],
"removed": [],
"summary": "Penalties for products infused with THC without proper licenses.",
"modified": []
},
"citation": "342.29",
"subdivision": "subdivision 5"
},
{
"analysis": {
"added": [
"Additional tiers for penalties based on cumulative THC content of infused products without license."
],
"removed": [],
"summary": "Additional penalties for infused products and licensing violations.",
"modified": []
},
"citation": "342.29",
"subdivision": "subdivision 6"
},
{
"analysis": {
"added": [
"Penalties for cannabis concentrates without license, including ranges by grams and per-incident escalation."
],
"removed": [],
"summary": "Penalty structure for various non-license violations involving concentrates and imported goods.",
"modified": []
},
"citation": "342.29",
"subdivision": "subdivision 8"
},
{
"analysis": {
"added": [
"Additional penalty tiers for concentrate-related noncompliant activities."
],
"removed": [],
"summary": "Additional penalties for concentrate-related activities.",
"modified": []
},
"citation": "342.29",
"subdivision": "subdivision 8a"
},
{
"analysis": {
"added": [
"Penalty tiers for importing or selling THC-infused products beyond license scope."
],
"removed": [],
"summary": "Penalty structure for other THC-infused product violations.",
"modified": []
},
"citation": "342.29",
"subdivision": "subdivision 10"
},
{
"analysis": {
"added": [
"Applies to licensed cannabis product manufacturing processes and related outputs."
],
"removed": [],
"summary": "Additional manufacturing/endorsement provisions for 342.30 scope.",
"modified": []
},
"citation": "342.30",
"subdivision": "subdivision 3"
},
{
"analysis": {
"added": [
"Incorporates endorsement considerations tied to production outputs in supplement years."
],
"removed": [],
"summary": "Supplemental endorsemnt/production requirements (Minnesota Statutes 2025 Supplement).",
"modified": []
},
"citation": "342.30",
"subdivision": "subdivision 1"
},
{
"analysis": {
"added": [
"Rules governing the alignment of licenses and endorsements for specific manufacturing or product outputs."
],
"removed": [],
"summary": "Endorsement and license alignment for certain operations.",
"modified": []
},
"citation": "342.31",
"subdivision": "subdivision 3"
},
{
"analysis": {
"added": [
"Provisions for additional endorsement conditions and transferability where applicable."
],
"removed": [],
"summary": "Additional endorsement-related requirements.",
"modified": []
},
"citation": "342.31",
"subdivision": "subdivision 5"
},
{
"analysis": {
"added": [
"Additional controls related to packaging, labeling, and health/safety for endorsed products."
],
"removed": [],
"summary": "Miscellaneous endorsement and product-control provisions.",
"modified": []
},
"citation": "342.32",
"subdivision": "subdivision 3"
},
{
"analysis": {
"added": [
"Incorporates additional endorsement-related requirements from supplement years."
],
"removed": [],
"summary": "Supplemental endorsement-related controls (Minnesota Statutes 2025 Supplement).",
"modified": []
},
"citation": "342.32",
"subdivision": "subdivision 1"
},
{
"analysis": {
"added": [
"Adds regulatory and enforcement provisions referenced by supplement year updates."
],
"removed": [],
"summary": "Supplemental enforcement/regulatory provisions (Minnesota Statutes 2025 Supplement).",
"modified": []
},
"citation": "342.44",
"subdivision": "subdivision 1"
},
{
"analysis": {
"added": [
"Authorizes indoor/outdoor cultivation with office-imposed security requirements."
],
"removed": [],
"summary": "Security and operational controls for cultivation and processing.",
"modified": []
},
"citation": "342.45",
"subdivision": "subdivision 3"
},
{
"analysis": {
"added": [
"Specifies endorsement conditions for product manufacturing in subdivision 2 contexts."
],
"removed": [],
"summary": "Endorsements and manufacturing requirements for specific product lines.",
"modified": []
},
"citation": "342.515",
"subdivision": "subdivision 2"
},
{
"analysis": {
"added": [
"Adds additional endorsement-related parameters for consumer products."
],
"removed": [],
"summary": "Expanded regulatory framework for consumer product endorsements.",
"modified": []
},
"citation": "342.515",
"subdivision": "subdivision 4"
},
{
"analysis": {
"added": [
"Adds compliance-related penalties and enforcement for endorsed products."
],
"removed": [],
"summary": "Penalties and compliance standards tied to endorsements.",
"modified": []
},
"citation": "342.515",
"subdivision": "subdivision 6"
},
{
"analysis": {
"added": [
"Introduces core endorsement provisions aligned with manufacturing activities."
],
"removed": [],
"summary": "Foundational endorsement provisions for product manufacturing.",
"modified": []
},
"citation": "342.515",
"subdivision": "subdivision 1"
},
{
"analysis": {
"added": [
"Adds safeguards and oversight provisions related to endorsements and product outputs."
],
"removed": [],
"summary": "Additional endorsement- and product-control provisions.",
"modified": []
},
"citation": "342.515",
"subdivision": "subdivision 7"
},
{
"analysis": {
"added": [
"Incorporates cross-references and alignment with updated licensing/endorsement provisions."
],
"removed": [],
"summary": "Administrative and regulatory alignment for chapter 342 updates.",
"modified": []
},
"citation": "342.62",
"subdivision": "subdivision 2"
},
{
"analysis": {
"added": [
"Introduces transferability and adjustments to licenses, including social equity considerations, and renewal processes."
],
"removed": [],
"summary": "Minnesota Statutes 2025 Supplement reference for licensing transfers and adjustments.",
"modified": []
},
"citation": "342.12",
"subdivision": ""
},
{
"analysis": {
"added": [
"References true party of interest ownership thresholds and revocation processes under licensing statutes."
],
"removed": [],
"summary": "Provisions cited to support licensing revocations and related true-party-of-interest rules.",
"modified": []
},
"citation": "342.21",
"subdivision": ""
},
{
"analysis": {
"added": [
"Establishes endorsement application forms, criteria for denial, and alignment with license terms."
],
"removed": [],
"summary": "Endorsement framework for cannabis business activities.",
"modified": []
},
"citation": "342.245",
"subdivision": ""
},
{
"analysis": {
"added": [
"Reference to Chapters 28A and 34A for food-handling compliance within the edible cannabinoid product endorsement framework."
],
"removed": [],
"summary": "Administrative alignment with food-handling regulation for edible product endorsements.",
"modified": []
},
"citation": "28A",
"subdivision": ""
},
{
"analysis": {
"added": [
"Reference to Chapter 31 for food-handling compliance within the endorsement framework."
],
"removed": [],
"summary": "Administrative alignment with food-handling regulation for edible product endorsements.",
"modified": []
},
"citation": "31",
"subdivision": ""
},
{
"analysis": {
"added": [
"Reference to Chapter 34A for food-handling compliance within the endorsement framework."
],
"removed": [],
"summary": "Administrative alignment with food-handling regulation for edible product endorsements.",
"modified": []
},
"citation": "34A",
"subdivision": ""
},
{
"analysis": {
"added": [
"The office may not disqualify individuals for violations of 152.025 when evaluating cannabis licenses."
],
"removed": [],
"summary": "Preserves prohibition on disqualification for certain non-cannabis offenses while broadening disqualification rules for cannabis licensing.",
"modified": []
},
"citation": "152.025",
"subdivision": ""
},
{
"analysis": {
"added": [
"Allows release of civil investigative data by other state agencies to determine license eligibility."
],
"removed": [],
"summary": "Data-sharing authority with other state agencies for licensing determinations.",
"modified": []
},
"citation": "13.02",
"subdivision": "subdivision 17"
},
{
"analysis": {
"added": [
"Permits data releases consistent with protections for protected nonpublic/confidential information where related to license determinations."
],
"removed": [],
"summary": "Confidential data handling aligned with licensing determinations.",
"modified": []
},
"citation": "13.39",
"subdivision": "subdivision 2"
},
{
"analysis": {
"added": [
"Incorporates references to Chapter 18B as part of pesticide and agricultural chemical regulatory framework."
],
"removed": [],
"summary": "Chapter references for pesticide regulation and related enforcement.",
"modified": []
},
"citation": "18B",
"subdivision": ""
},
{
"analysis": {
"added": [
"Incorporates references to Chapter 18C as part of pesticide and agricultural chemical regulatory framework."
],
"removed": [],
"summary": "Chapter references for pesticide regulation and related enforcement.",
"modified": []
},
"citation": "18C",
"subdivision": ""
},
{
"analysis": {
"added": [
"Incorporates references to Chapter 18D as part of pesticide and agricultural chemical regulatory framework."
],
"removed": [],
"summary": "Chapter references for pesticide regulation and related enforcement.",
"modified": []
},
"citation": "18D",
"subdivision": ""
},
{
"analysis": {
"added": [
"Reiterates endorsement application forms and eligibility criteria."
],
"removed": [],
"summary": "Endorsement framework for cannabis business activities (duplicate reference to endorsements section).",
"modified": []
},
"citation": "342.245",
"subdivision": ""
}
]Progress through the legislative process
In Committee