The Minnesota Office of Cannabis Management (OCM) has reached a settlement with a group of social equity marijuana license applicants, resolving a legal dispute over a canceled lottery that could have delayed the state’s adult-use licensing process.
The agreement, revealed Friday during a Ramsey County District Court hearing, comes just days before the OCM is set to begin awarding licenses through multiple lotteries starting June 5. The dispute centered around the state’s original preapproval lottery for social equity applicants, which was scrapped in November following lawsuits from several individuals who argued they were wrongly excluded.
Last month, Judge Stephen L. Smith ruled that the OCM was obligated to carry out the lottery. With the settlement now in place, Smith is expected to dismiss the order, clearing the path for the OCM to move forward with the licensing process.
Under the terms of the settlement, the OCM has agreed to prioritize those who were approved for the original, canceled lottery throughout the licensing process. According to Blunt Strategies—a cannabis consulting firm that organized the group of applicants—those individuals will retain a competitive edge as they work to meet licensing requirements such as securing labor peace agreements, passing background checks, complying with zoning rules, and completing a pre-opening inspection.
“This is an important win for equity, fairness, and the integrity of Minnesota’s cannabis licensing system,” said Leili Fatehi, partner at Blunt Strategies and president of the applicant group. “This outcome was made possible by the business owners who stepped up, organized, and fought for what they were promised.”
In addition to prioritization, the state will allow applicants who seek licenses capped by statute and who are not chosen in the upcoming lottery to carry their applications over into future rounds. Minnesota will also provide partial reimbursement of legal costs incurred by the applicants.
Josh Collins, a spokesperson for the OCM, said in a statement that the agency “looks forward to holding license application lotteries on June 5 for social equity and general applicants,” adding that the office remains committed to launching a successful adult-use cannabis industry that delivers on its promise of equity.
