Minnesota will allow some commercial cultivators to start growing marijuana later this year to prepare for the launch of its retail market, and it will award cannabis business licenses through a vetted lottery instead of a merit-based application system that was previously in law.

Gov. Tim Walz signed a cannabis policy bill on Friday that makes several notable changes to the state’s year-old recreational marijuana law.

The bill establishes a process for social equity applicants to be preapproved for cannabis business licenses this year while others must wait until 2025 to apply. Social equity applicants include people or family members of individuals who were previously convicted of marijuana offenses, military veterans, residents of high-poverty areas and “emerging farmers” who have provided the majority of labor and management for a small farm for at least three years.

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Social equity applicants who are preapproved for a cannabis business license may start growing marijuana later this year to help the state build its supply chain, as long as they’ve also obtained local zoning approval and abide by Minnesota’s existing medical cannabis cultivation rules. The state hasn’t yet finalized recreational cannabis cultivation rules, which is why regulators are using the medical rules to govern growing in the meantime.

Those who start growing cannabis this year wouldn’t be allowed to process or sell it until licenses are rolled out more broadly next year.

The state’s Office of Cannabis Management will now use a “qualified lottery” to distribute cannabis business licenses next year. Applicants who meet minimum qualifications, such as securing property and developing operational plans, will be entered into the lottery with winners chosen at random.

The bill signed by Walz also sets caps on certain license types, such as retail dispensaries, in the market’s first two years to avoid oversaturation. It allows cities to open municipal cannabis stores without going through the lottery process, lets doctors recommend cannabis for the treatment of any condition and allows registered medical cannabis patients to designate a caregiver who may grow up to eight cannabis plants on their behalf.

Want to know more about the changes made to Minnesota’s recreational marijuana law? Read our explainer.