Minnesota cannabis business owners frustrated by initial licensing process delay

ST. PAUL, Minn. — Some looking to cash in on cannabis are frustrated now that the early business license approval is delayed until at least the end of the year, after regulators initially planned for this fall.

State lawmakers this year signed off on business license “preapproval” in order to give some entrepreneurs a head start to plan accordingly so they’re ready for anticipated market launch next year — even as the rulemaking process continues. The rest of the business licenses would follow next year.

This summer, the Office of Cannabis Management began that process by pre-vetting social equity applicants, who are the individuals able to apply for the early licenses. 

If someone met that criteria, they could apply for the roughly 280 early licenses available. That period has closed, but the next step is the random lottery by which the cannabis office will choose who gets a license — from growers to manufacturers to retailers and more.

Applicants were expecting that lottery drawing by this fall. But a spokesperson for the Office of Cannabis Management said reviewing applications to ensure businesses do not run afoul of state law is taking more time than expected. 

“We haven’t had a specific date in mind for the lottery, as we didn’t know how many applications we would receive or how long it would take to review them,” Jim Walker, the public information officer, said. “We are confident that we will hold the well-vetted lottery before the end of the calendar year.”

Minnesotans who qualify and applied for this first round of licenses say they are frustrated by the setback, even if it’s only a few months.Nicholas Rahn, a veteran who owns the Warrior’s Garden in St. Paul that  sells low-dose, hemp-derived THC edibles, is seeking a cannabis retailer license.

He said he cannot secure the capital necessary to renovate his Lowertown store to meet the requirements for opening a dispensary selling weed without that preapproved license. He wants the Office of Cannabis Management to be more communicative about the process. 

“Everything’s riding on this license,” he said. “I need it so I can start moving forward with the loan. And the loan takes time too. You’re not just going to apply and get it right away.”

The lottery system for choosing who actually receives a license was the subject of fierce debate at the state capitol this year. It was part of a package of changes this year to the 2023 law legalizing cannabis for adult recreational use, including allowing some of those pre-approved license holders to grow early so there is supply of plants to sell by market launch. 

Angela Dawson, president of Bold North Farms who currently grows hemp in Northern Minnesota, worries that the current license limbo will lead to detrimental delays. 

“The window for growing early in Minnesota has passed unless you have a building built already,” Dawson said. 

Doing the latter, she added, would require significant investment that she said she can’t make and other social equity applicants are likely in the similar situations. 

“It’s frustrating and it’s disheartening because the whole entire purpose of this early mover advantage was to help address the issues that social equity applicants already have in terms of being disadvantaged in a market like this,” she said. 

Cannabis regulators had initially planned for market launch by early 2025. But the interim director of the cannabis office earlier this year tempered expectations and said the goal is to have the general license application process open by then.