Minnesota regulators report that the number of residents who obtain marijuana from unregulated sources is still significant, even as the state moves to create a legalized market. They recommend legislative fixes to accelerate licensing in order to assist consumers with the transition to a licensed system.
The Minnesota Office of Cannabis Management released two reports on Wednesday. They provided an overview of the consumer and industry trends as well as a few policy recommendations that lawmakers should take into consideration in 2024 as the market grows. The report also stated that Minnesota would need at least 381 retail stores to meet the statute.
As regulators are still working through the licensing and rulemaking process, many features that were enacted in last year have not been implemented. Initial reports will have gaps filled after the commercial sales launch. The data provides a baseline for policymakers and stakeholders to better understand the reform.
In the absence of any tribally-owned cannabis retailers in the state, most residents who responded to the survey reported that they had obtained cannabis within the last month from friends and family (67.6%), low-THC hemp stores (61.3%), an illicit seller (53.4%), and medical cannabis dispensaries (42.7%).
OCM stated that “These findings were not uncommon in other States as the adult use possession laws and gifting legislation become effective, and the perceived criminal risk is reduced when adult-use sources of alcohol are not available.”
It said that the data showed that a high percentage of Minnesota residents obtained cannabis from an illegal source (dealers), which is not surprising, as there aren’t many legal sources for adult use. The highest percentage of cannabis purchased by participants (17.6%) was obtained from dealers, and the participants were most likely to visit a dealer to buy cannabis more than once per month compared to any other type of source.
Officials looked at the requirements for the state’s marijuana statute based on population and found that Minnesota would eventually require “no fewer than 381 retail licenses.”
It said that many local governments might want to register more retail vehicles than the minimum required by law. As a result, the legislature could consider a higher number than the minimum.
OCM recommends removing the requirement that prospective licensees obtain a storefront in compliance with regulations prior to submitting their application. This will expedite licensing and “reduce bottlenecks.” The report also recommended that lawmakers eliminate the requirement for local governments to provide input into applications. This could lead to litigation.
The report states that “These recommendations will allow a more transparent and streamlined approach to licensing, which will help applicants understand and licenses can be issued quickly.”
The office suggested the legislature adopt “a mechanism to issue temporary licences through statute, especially for social equity applicants.”
This strategy would help accelerate the timeline and ensure sufficient supply for the initial market launch. It would also mitigate some of the risks associated with the period between legalization, and the final rule adoption. And it will give social equity applicants an advantage by being the first to apply, in support the goal for the market launch in 2025. Temporary regulations for social-equity licenses will help to ensure fairness and equality from the beginning of the market. The recommendation is intended to promote a quick and fair market debut.
The report also offered recommendations to “strengthen the social equity initiatives” of the state and unify supply chains for medical cannabis and adult use marijuana, which are currently separated.
OCM also works with other state agencies in order to determine whether they can administratively close the loophole which may allow some hemp businesses to sell marijuana flower products . This issue is due to a lack of authority currently to test these items.
The office opened its fifth survey last week to solicit public input about how the future commercial marijuana market in the state should operate. This latest inquiry focused on “licensing considerations and social equity.”
Members of the public can weigh in after OCM has proposed new rules for marijuana. This is expected to happen sometime in the fall. OCM has been approved by lawmakers to use an expedited rulemaking procedure, but regulators have noted that the rules “may not be approved and come into force until 2025.”
Adults 21 years and older are already able to legally possess, use and grow marijuana as personal use. Gov. In August, Gov. Tim Walz, a Democrat from Wisconsin, clarified that cannabis grown at home cannot be sold for commercial purposes.
Minnesota’s cannabis laws have also allowed tribal governments to enter the legal marijuana market before the state began licensing traditional retailers. Some tribal governments are already in the market. Red Lake Band of Chippewa Indians , for instance, opened their medical dispensaries in August to adult consumers and announced plans to launch mobile retail vehicles to sell marijuana throughout the state.
In July, the White Earth Nation tribe opened a cannabis shop for adults. Its governing council voted to allow marijuana sales. Leech Lake Band of Ojibwe is also moving to legalize.
Some advocates believe that minor violations of home cultivation or possession limits could result in misdemeanor charges. should also include legal representation provided by the state.
Before the Governor signed the reform law, the state created a website to serve as a central hub of information on the new law. Officials are also soliciting vendors who can help create a licensing system.
Erin DuPree resigned as the head of OCM in September after just one day. She was a cannabis consultant that the Governor had chosen to lead. This followed a Star Tribune article claiming her hemp shop sold illegal products. According to reports, lab results showed that the hemp products had high THC levels as well as banned synthetic ingredients.
The Minnesota Supreme Court also ruled in the same month that an odor of pot alone does not constitute probable cause to allow police officers search a car.
The Cannabis Expungement Board is another entity created by Minnesota’s cannabis law, and will facilitate the sealing of records for those with marijuana convictions in their record. In August, the review process began for cases that were eligible. Officials recently added a notice to the cannabis criminal records. This is a way of letting reviewers that certain marijuana records which appear on record checks are pending expulsion.
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Photo by Philip Steffan.
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