REGIONAL- The sale of legalized cannabis in Minnesota is lurching toward next year’s opening of dispensaries with a number of changes being considered by legislators to improve and speed the process along.
The state House last week approved a bill that sets the stage for a comprehensive reform of how cannabis licenses will be distributed and operated in Minnesota.
“A number of provisions in this bill are designed to expedite the process of setting up a good legitimate marketplace for cannabis to displace that illicit marketplace that’s out there,” said Rep. Zack Stephenson, DFL-Coon Rapids, the bill’s sponsor.
License lottery
One of the more controversial aspects of the bill is the shift from a merit-based license allocation system to a lottery-based system. This change aims to simplify the process and reduce litigation risks, which have plagued other states with merit-based systems that have been judged to be too subjective. However, the shift has drawn criticism from entrepreneurs and Republicans alike.
Rep. Nolan West, R-Blaine, expressed concerns that the lottery system could be exploited by large, out-of-state retailers and does not adequately prioritize the social equity goals of the original legislation.
“This bill does some good, but it really doesn’t fix much of anything on what’s not going to work in the cannabis bill,” West said. He and other Republicans proposed amendments aimed at reinforcing the advantages intended for social equity applicants, though most were not adopted.
Some cannabis entrepreneurs have voiced opposition about the lottery system as well. In a letter to lawmakers, more than two dozen business owners argued that the system could allow underprepared businesses to gain licenses, which could undermine market competition and social justice efforts.
“The simplicity of the lottery system allows for exploitation through application flooding, submission of spurious applications, and the manipulation of social equity measures by predatory entities,” the letter said. “Such practices undermine genuine competition and social justice efforts.”
But Rep. Jessica Hanson, DFL-Burnsville, pushed back against detractors, saying that the lottery system’s simplicity would streamline the licensing process and reduce the risk of litigation that has slowed down licensing in other states.
The Office of Cannabis Management (OCM), still operating under interim leadership after the botched hiring and resignation of its first director, will be responsible for overseeing the distribution of licenses through the new lottery system. The system will come into play if the number of qualified applicants exceeds the number of licenses available.
The bill proposes starting the issuance of license pre-approvals as early as this summer, allowing prospective dispensary operators to get a head start by securing funding and real estate.
Medical cannabis
The bill would make significant changes to how medical cannabis is handled, allowing more flexibility for patients and caregivers.
Physicians would have the authority to decide if a patient could benefit from medical cannabis for any condition, a shift from the state’s current practice of deciding which conditions qualify for inclusion in the program.
Medical cannabis patients would be permitted to possess 16 plants instead of eight and transfer half of their allotment to a registered designated caregiver approved to assist patients enrolled in the medical cannabis program.
Veterans receiving care from the Department of Veterans Affairs would be automatically eligible to enroll in the state’s medical cannabis program.
And regulation of the medical cannabis program would be transferred from the Department of Health to OCM.
Other provisions
The bill would give OCM the role of regulating hemp-derived edible products as well. Other items of note in the bill include:
• Allowing THC beverages to be sold on tap under the current registration provision for edible cannabinoid products.
• Making changes in testing procedures to measure THC levels in employees.
• Prohibiting the sale of lower-potency hemp edibles to an obviously intoxicated person.
• Permitting products having only hemp-derived cannabinoids to be sent out of state for testing.
• Allowing municipalities interested in running recreational dispensaries to obtain licenses without entering the lotteries, although they will not have an exclusive license and will have to compete with other dispensaries.
• Requiring OCM to study the impact of cannabis on minors.
An amendment offered by Republicans to provide pre-approved licenses for cannabis cultivators as well as dispensaries did not make it into the final version of the bill. Some in the industry have expressed concern that without speeding up the approval process for cannabis growers, there may not be sufficient supply to meet demand when dispensaries open next year, and vendors are prohibited from bringing cannabis from other states into Minnesota.
More debates and possible revisions are anticipated as the bill moves to the Senate. The Senate’s companion bill is up for a vote soon, with differences having to be hammered out in conference committee during the session’s final weeks.
MinnPost contributed to this article.