Despite a hiccup last week in the Minnesota Office of Cannabis Management’s (OCM) licensing plan for adult-use businesses, the state’s head regulator said Dec. 17 that she is still “optimistic” about a 2025 sales launch. But that’s as far as OCM Interim Director Charlene Briner would go into her crystal ball for a potential launch date.
The office announced Dec. 11 that it was scrapping a preapproval lottery for 648 social equity applicants that was initially scheduled for Nov. 26 to “avoid further delay” after a district court judge ordered a stay amid lawsuits brought by some of the 1,169 unsuccessful applicants.
With that announcement, the OCM released a schedule for the revised licensing cycle, including a to-be-announced lottery that is tentatively scheduled for May or June 2025. Beyond that, Briner was hesitant this week to offer a target date for the commencement of commercial sales.
“I think that we’ve been really clear to say we’re not going to anticipate when we’ll see first retail sales in the commercial market,” Briner said during an interview with Fox 9 on Tuesday. “Our goal has always been to have rules in place by the end of the first quarter of 2025, and then to also make sure that businesses who obtain a license from us, once those rules are in place, are ready to follow their own pacing to open their doors.”
Briner’s remarks came 567 days after Gov. Tim Walz signed Minnesota’s adult-use cannabis legalization bill into law on May 30, 2023, making the land of 10,000 lakes the 23rd state in the nation to reform its prohibition laws for adults 21 years and older. Provisions allowing adults to grow up to eight plans (four mature) at home and possess up to 2 pounds of cannabis in their private residences became effective on Aug. 1, 2023.
Among the 21 states to have launched adult-use sales so far—Virginia’s sales launch is at a standstill without legislation in place, and Minnesota and Delaware are working toward 2025 launches—the average time it takes between legalization and licensed retail sales is 469 days.
If Minnesota launches sales in the second half of 2025, that pushes its timeframe in the window of 763 days to 946 days—the third-longest adult-use rollout nationwide.
Minnesota’s 648 preapproved social equity applicants were initially vying for 282 licenses, including 100 vertically integrated microbusiness, 25 vertically integrated “mezzobusiness” (medium) licenses, 13 cultivator licenses and 38 dispensary licenses, among other permit types.
The goal of the early lottery round was to allow awardees—including those unjustly impacted by prohibition policies, veterans and people living in poverty-defined areas—a head start to begin cultivating cannabis by the end of 2024 to kickstart an equitable marketplace. While there will still be a lottery for social equity licensees, that lottery got pushed back to the standard licensing cycle.
Amid OCM’s pivot last week, the 648 preapproved applicants automatically moved forward in the next licensing process. Applicants who applied for a license not capped by statute will not be subject to a lottery and therefore can continue their next steps in securing a license. These next steps include securing real estate, hiring staff, signing labor peace agreements and procuring local zoning approvals, among other mandates, to prove their readiness to the OCM.
“Depending on when all that lines up, they could be in a position of opening up within a matter of months,” Briner said Tuesday. “When they open their doors is really dependent upon the individual readiness of that operator. … We’ve always said that this market’s going to mature over time. We will see these businesses continue to come on board over the next several years, but I think I’m pretty optimistic about a 2025 launch in the way that we always have been.”
In the interim, Minnesotans who consume cannabis must grow their own, purchase their products from one of a few dispensaries on tribal lands—including the Prairie Island Indian Company, Red Lake Nation and White Earth Nation—or face the safety and legal risks of the unregulated marketplace.
One of the goals of any state-legal cannabis market is to eliminate unlicensed sales by providing consumers with safe and tested products free of mold, harmful pesticides or other contaminants. That’s one reason why many states attempt to roll out commercial sales quickly following adult-use possession provisions becoming active, preventing unlicensed activity from ballooning out of control.
New York, where authorities recently seized $63 million from 1,000 storefronts through the Big Apple, is a prime example of the effects of a fumbled sales rollout. It took New York 638 days between legalization and launching adult-use sales via one licensed dispensary in December 2022. Still, New Yorkers had fewer than 30 licensed stores to buy cannabis from throughout 2023, allowing the unlicensed activity to thrive.
In Minnesota, Briner said the OCM is required to provide annual status updates to the state Legislature regarding progress made in converting consumers from unregulated to regulated sales.
“What we’ve seen in other states is that it takes some time to do that,” she said. “Consumer habits need to change. You need to have sufficient saturation after several years of a legalized market. And so, we’ll watch that over time. But right now, there are no licensed cannabis sales other than on tribal lands or in the medical program. And so, anything else by definition would continue to be the black market.”
Some of the fasted adult-use market launches in the nation, including 80 days in Arizona and 87 days in Missouri, were done so by allowing existing medical cannabis operators to expeditiously transition to serving those 21 years and older.
While licensed adult-use sales are still months—or perhaps a year—away in Minnesota, the OCM launched an effort to crack down on unlicensed sales in March 2024, when the office entered into an agreement with the Minnesota Department of Health (MDH) to add inspection capacity for illicit sales of raw cannabis flower.
At that time, the OCM asked the Legislature to accelerate the timeline to transition hemp-derived cannabinoid enforcement duties from the MDH to OCM by July 2024 rather than March 2025.
However, as seen in other states, without access to licensed dispensaries, cannabis consumers will seek out alternative avenues to make their purchases, feeding the demand, and therefore the opportunity, for unregulated sales to thrive.
Although Minnesota’s adult-use program will be one of the longest in the nation to roll out, Briner reasserted on Tuesday that Minnesotans had access to legal cannabis sales via tribal nations on day one of legalization in addition to hemp products at more than 4,400 registered retailers today.
Much like New York, however, Minnesota’s approach to adult-use cannabis sales has been focused on an equitable launch without providing a first-mover advantage to the state’s existing medical operators.
“While people are really focused on timeline, I think that the law is playing out in the way that the authors and the advocates intended, which was to create this smaller craft market that was not dependent on the large operators,” Briner said. “When people think about the pace, they should remember that, unlike other states, we didn’t flip the switch to just turn on the medical market to serve adult use. We’re building this industry from the ground up.”
Office of Cannabis Management head Charlene Briner said the state’s regulators are ‘not going to anticipate’ a specific date for dispensary sales to commence. Read More
