Opening Soon for Business

by Jen Randolph Reise

Minnesotans are eager to open cannabis businesses. This summer, the state received 1,817 applications for 280 available spots in the social equity license application cycle.

Some categories were much more competitive than others; there were 586 applications for 100 microbusiness licenses (micro licenses allowing for one retail location with a canopy cap of 5,000 square feet of growing space), 372 applications for 23 mezzobusiness licenses (mezzo license meaning three retail locations allowed with 15,000 square feet of canopy), and 578 applications for 38 retailer license spots.

As I write this on September 7th, we are still waiting for news from the Minnesota Office of Cannabis Management (OCM) as to when the lottery will occur to determine who will receive the social equity preapproval licenses we worked so hard to submit by the August 12th, midnight deadline. If there is one thing we can count on with new legislation becoming a policy practice, nothing moves fast when you lack a well-defined path to follow. These delays are just one of the many things difficult about navigating the nascent cannabis industry. It lurches forward and then halts. Hurry up and wait, my dad called it.

OCM is reviewing those applications against its minimum standards and will determine which are eligible for awarding and hold the lottery at some point this fall. The lucky winners will then hold license preapprovals and turn to the next stage: raising money, securing property, and setting up their businesses. However, they can’t operate (or touch the plant) until OCM’s final rules are issued this spring – except for the early cultivation exception. That allows folks who win those license preapprovals to grow as soon as they get zoning and code signoff from the municipality where they plan to cultivate.

The social equity license preapproval winners will have 18 months to open their business, or the license will return to OCM for future issuance. (Social equity licenses received through preapprovals are non-transferable.) That’s not a long time to launch a business, especially if you did not secure property or do a ton of detailed planning before submitting the license application, which was an option many people took advantage of to preserve capital. Hurry up and wait, indeed.

I’m proud of our work at North Star Cannabis Law, where we help social equity licensee clients through the licensing process using our novel approach to lawyering: tech-forward, efficient, and flat fees.

This fall, I look forward to helping preapproval lottery winners raise capital, secure property (including negotiating city zoning and use issues), and set up a highly regulated business as quickly as possible. We’ll also help the disappointed lottery non-winners retool their submission plans for the next round and assist the much larger pool of cannabis entrepreneurs who did not qualify for social equity in putting together their applications for the next round in the spring.

Minnesota proudly leads the world in offering consumers hemp-derived
beverages and edibles. We’ll continue to help these owners further navigate the opportunities and challenges posed by changing laws and the adult-use industry coming online soon, as well as offer continued support to ancillary businesses in the industry navigating business and compliance issues as they look to serve plant-touching businesses.

Sign up for the North Star Cannabis Law newsletter at northstarlaw.com/cannabis to stay current on Minnesota hemp and cannabis legal news.