Today, the Minnesota Office of Cannabis Management (OCM) announced that an administrative law judge has approved draft rules governing Minnesota’s adult-use cannabis market.
The rules, which the judge approved without changes, will be published in the State Register and go into effect later this month. This milestone sets up the final step in launching Minnesota’s cannabis market, allowing OCM to begin issuing business licenses to applicants who have completed all necessary steps in the application process.
“The adoption of rules is the most significant step to launching the cannabis market because the office cannot issue business licenses until they are in place,” said Interim Director Eric Taubel. “The judge’s approval of our proposed rules without changes shows that we did our work to engage with the prospective cannabis business community and put together a reasonable structure for ensuring consistency, safety, and equity in Minnesota’s cannabis industry.”
There are currently more than a thousand qualified applicants for social equity licenses – many of whom applied for license types that are not capped in statute and will not be subject to lotteries, including microbusiness, wholesaler, transporter, testing facility, and delivery service. More than 600 of these qualified applicants advanced from last fall’s license preapproval process and are first in line to receive business licenses after completing application requirements, which include completing background checks, submitting signed labor peace agreements with bona fide labor organizations, and securing local government approvals.
“It was important for us to preserve early-mover advantages for social equity applicants envisioned by the Legislature,” said Jess Jackson, OCM’s director of social equity. “By ensuring the applicants who qualified during license preapproval have the first chance at licenses once rules are approved, we are continuing to prioritize social equity in every stage of licensing.”
Qualified applicants in the four license types whose numbers are capped in state statute (cultivator, mezzobusiness, manufacturer, and retailer) will be subject to a series of lottery drawings for the distribution of these licenses. Lotteries for each license type will be conducted this summer for both social equity applicants and general applicants. If not selected in the first social equity dedicated lottery, qualified social equity applicants will have another opportunity to be entered into a second lottery along with the general applicants for the remaining licenses available.
About rulemaking
Rulemaking is a multistep process involving substantial public input, where state offices propose detailed rules to implement Minnesota Statutes. In drafting the rules, OCM conducted a series of surveys that focused on specific rulemaking topics and held meetings with partners and interested parties, including cannabis management offices from other states. OCM shared a preliminary draft of the proposed rules with the public seeking feedback in summer 2024. After incorporating changes based on that feedback, OCM posted its formal draft for public comment for 30 days from Jan. 13 to Feb. 12. After incorporating additional changes based on public comments, OCM submitted the final draft rules to an administrative law judge (ALJ) with the Office of Administrative Hearings on March 25. The ALJ approved the rules without changes on April 2. Now approved, the final rules must be published in the State Register for them to take effect.
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