Purpose

This bill changes Minnesota’s cannabis laws to expand and reorganize how cannabis and hemp businesses are licensed, adds new license types (including a cannabis macrobusiness), clarifies medical cannabis products, tightens certain safety rules (like home extraction), and strengthens local government roles and social equity considerations.

Main Provisions and Goals

• Licensing framework and new license types
  • Creates a new cannabis macrobusiness license and keeps existing categories (microbusiness, mezzobusiness, cultivator, manufacturer, retailer, wholesaler, transporter, testing facility, event organizer, delivery, and lowerpotency hemp editor manufacturers/retailers).
  • Defines “cannabis business” to include all these license categories plus a medical cannabis combination business macrobusiness.
  • Updates who is a “License holder” to include all these license types.
• Medical cannabis products and definitions
  • Defines “medical cannabinoid product” with specific forms (liquids, pills, gummies, topicals, watersoluble forms, etc.) and allows hemp-derived cannabinoids; clarifies it is not the same as adult-use cannabis.
  • Defines “medical cannabis flower” separately and notes it is not adult-use cannabis flower.
  • States medical cannabinoid products may be produced with hemp concentrates and are not subject to certain office potency limits.
• Home extraction and safety
  • Prohibits home extraction of cannabis concentrate using volatile solvents unless done by a licensed microbusiness, mezzobusiness, macrobusiness, or other licensed entities.
• Fees, licenses, and transfers
  • Lists license types and sets application, initial license, and renewal fees for each category.
  • Sets rules for license transfers and when licenses must be reissued (e.g., changes in business structure, bankruptcy, restructuring, or dissolution).
  • Establishes annual license renewals and local (city/county) registration considerations.
• Reclassification and social equity
  • Allows certain licenses to be reclassified (e.g., microbusiness to mezzobusiness or macrobusiness) starting in 2027, with priority given to licensees with medical endorsements or social equity status.
  • Requires a transition plan as part of any reclassification to show compliance with new license rules.
  • Maintains social equity status for licenses that started as social equity licenses.
• Vertical integration
  • Generally prohibits vertical integration, with specified exceptions that allow some license types to operate in related areas.
• Local control and collaboration with local governments
  • Local governments cannot ban possession, transportation, or use of cannabis products authorized under this chapter, and generally cannot prohibit operating licensed cannabis or hemp businesses, though they can set reasonable time/place/manner restrictions.
  • Establishes distance-based restrictions around schools and certain facilities.
  • Requires the Office to work with local governments to develop model ordinances, forms, and compliance check processes.
  • Creates an expedited complaint process for local governments to raise concerns, with defined response and inspection timelines.
  • Allows local governments to cap or limit the number of certain licensed retailers in their jurisdiction (with minimum counts and the possibility of allowing more).
  • Provides a framework regarding tribal (Indian country) licensing, requiring tribal government consent for licenses in tribal lands.
• Retail registrations and compliance
  • Requires cannabis and hemp retailers to register with the local government before selling to customers or patients.
  • Local governments conduct compliance checks for local ordinances, zoning, and tax obligations before registration.
  • Retail registrations may be renewed concurrently with license renewals and are not transferable.
  • Local governments can suspend or cancel retail registrations for violations, with the state able to address issues through existing enforcement provisions.
• Cannabis events and sales
  • Allows certain license holders (microbusinesses, mezzobusinesses, retailers, macrobusinesses, and event organizers, including lowerpotency hemp retailers) to sell cannabis plants, adult-use cannabis products, and hemp products at cannabis events, subject to specific rules.
  • Sets area limits, age verification, sample display rules, and labeling requirements for products at events.
  • Prohibits driving through sales, vending machine dispensing, and selling to intoxicated individuals at events.
• Enforcement and penalties
  • Sets penalties for noncompliance, including potential civil penalties and suspension or revocation of licenses or registrations if rules are violated.
• Miscellaneous and cross-references
  • Updates cross-referenced sections to align with the new licensing structure, including changes to local coordination, transfers, and approvals.
  • Maintains consistency with medical registry provisions (patients, caregivers) and clarifies how medical and adult-use pathways interact.

Significant Changes to Existing Law

• Introduction of a macrobusiness licensing category and reclassification pathways (micro → mezzzo/macrobusiness) with priority considerations for medical and social equity license holders.
• Explicit creation and regulation of medical cannabinoid products with defined delivery forms and compatibility with hemp-derived cannabinoids.
• Formal prohibition of home solvent-based extraction unless performed by licensed entities.
• Expanded and restructured license fee schedule and annual renewal processes.
• Stronger local-government role in registration, compliance checks, and expedited dispute resolution, plus model ordinances and processes for enforcement.
• Local government limits on the number of certain retailers, with population-based thresholds and conditions for expansion.
• New rules governing sales at cannabis events, including area restrictions, age verification, sampling limits, and display requirements.
• Provisions to protect tribal sovereignty by requiring tribal consent for licenses in Indian country.
• Provisions that limit vertical integration, while allowing certain related-license combinations under specific conditions.
• Expanded definitions to include lowerpotency hemp edibles and related retail/wholesale/licensing categories.

Relevant Terms - cannabis macrobusiness - cannabis mezzobusiness - cannabis microbusiness - cannabis cultivator - cannabis manufacturer - cannabis retailer - cannabis wholesaler - cannabis transporter - cannabis testing facility - cannabis event organizer - cannabis delivery service - lowerpotency hemp edible manufacturer - lowerpotency hemp edible wholesaler - lowerpotency hemp edible retailer - medical cannabis combination business macrobusiness - medical cannabinoid product - medical cannabis flower - social equity license - vertical integration - home extraction - volatile solvent - license holder - office (licensing authority) - local unit of government - retail registration - compliance check - reclassification - tribal consent / Indian country - interim ordinances - expedited complaint process - preapproval and preliminary approval - patient registry / designated caregiver (medical) - adult-use cannabis / adult-use cannabis products - hemp-derived consumer products