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Minnesota regulators are pushing a bill that would give ambitious cannabis business owners who meet social equity standards a head start in the state’s recreational cannabis market.
Leaders of the state’s Office of Cannabis Control announced at a Thursday news conference that they will be granting temporary business licenses to social equity applicants as early as July ahead of an expected 2025 market launch. He called for several changes to Minnesota’s cannabis laws.
Social equity applicants include those who have been directly or indirectly harmed by past criminal enforcement of marijuana laws.
A person granted a temporary license would be allowed to carry out the necessary preparatory work to set up a business, such as securing a building and obtaining local zoning approval. Prospective business owners won’t be allowed to open their businesses until the Office of Cannabis solidifies rules for the industry, which likely won’t happen until early next year.
“We want to make that clear that we will not be allowing any businesses to operate as early as July,” Charlene Briner, interim director of the Office of Cannabis, said in a statement. “If we have the rules in place…we can move quickly. This is a huge head start, especially for social equity applicants, and we’re very excited about this.”
Applicants who do not meet the social equity criteria will be delayed in obtaining a license and will not be able to start the application process until the authorities decide on rules.
Briner said the state plans to launch a recreational marijuana market in 2025, but it may not start in the first quarter of this year as some people had hoped.
“It may not be a first-quarter launch here. We want to meet expectations,” she said. “We hope to be able to apply for a license in early 2025, but the process of setting up the business could take several months or longer.”
Leili Fatehi, a partner at cannabis consulting firm Brandt Strategies, said temporary licenses for social equity applicants would help “level the playing field.” Without a temporary license, it could be difficult to secure the financing or real estate leases needed to start a business, she said.
“The problem that social equity applicants face is that it’s hard to get into those things in the first place,” said Fatehi, who worked with lawmakers to pass Minnesota’s cannabis law last year. he said.
The bill would limit the number of temporary licenses available to retailers, growers, manufacturers and others. If applications for temporary licenses exceed the number of licenses available, the Office of Cannabis would be required to use a “fair and random” lottery system to determine who gets a license.
The bill also proposes placing limits on the total number of cannabis business licenses that can be issued during the first two years of the market.
“Then we will have enough data to assess the market situation,” Breiner said.
Among a number of other changes, the regulator wants to remove the requirement for applicants to secure real estate before applying for a licence, in the hope of alleviating “undue financial burdens”. The bill would also consolidate the recreational and medical marijuana supply chain to reduce costs for consumers, and would give the Bureau of Cannabis enforcement authority over the state’s hemp-derived cannabis market starting in July of this year.
“The reality is, cannabis is cannabis if you grow it,” Breiner said of supply chain integration. “It’s only when it gets to the processing and manufacturing stage that it becomes a unique medical or adult-use product that people are familiar with.”
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