Minnesota’s legal marijuana market hasn’t launched yet, but lawmakers have already agreed to raise taxes on cannabis products under a new budget deal.
The bipartisan agreement would increase the state’s cannabis tax from 10% to 15% , in addition to Minnesota’s standard sales tax of 6.875% and any applicable local taxes. The increase would apply to both marijuana products and low-dose THC edibles derived from hemp.
House Speaker Lisa Demuth (R) defended the move, calling the current 10% rate “very low” and describing the increase as a way to “right-size” the tax. However, some lawmakers and industry advocates argue the change could undercut the legal market before it has a chance to get off the ground.
“When we legalized adult-use cannabis, we talked about how this is not a cash cow,” said State Senator Lindsey Port (DFL), a lead sponsor of the state’s cannabis law. “It is not an answer to the state budget’s concerns.”
The Office of Cannabis Management is preparing to launch the state’s legal market, with a license lottery scheduled for June 5. Certain cannabis businesses will be allowed to move forward ahead of full licensure, provided they meet regulatory requirements and obtain local approval.
The broader state budget framework was announced Thursday and is still being finalized in the legislature.
Separately, lawmakers also recently approved a comprehensive cannabis reform bill and sent it to Governor Tim Walz. Details on that legislation can be found here.
