It’s likely to be another year before recreational marijuana is widely available in Minnesota retail settings, but work that is being done throughout 2024 will determine what that market looks like and who is involved.
This week marks five months since adults 21 and up were legally allowed to possess and use cannabis for any reason. People can grow their own within limits and they can give away small amounts.
But the retail market for marijuana is still quite small and will remain so until a licensing structure is developed. That’s job one this year.
Minnesota lawmakers are also expected to dive back into the marijuana law when the Legislature reconvenes in February to ease concerns that have cropped up and clear up confusion in other areas.
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All is designed to avoid some of the pitfalls of other states that opened the door widely to legal marijuana and set up many of the guardrails after the fact.
“It will get a little more animated in 2024,” said Rep. Zack Stephenson, DFL-Coon Rapids and the lead sponsor of last year’s law.
Stephenson said he expects lawmakers will weigh proposals around insurance and liability for marijuana purveyors. He said restaurants and taverns that offer THC drinks want changes to clearly allow dual consumption of those drinks and alcohol.
There are business groups that want more workplace guidance around cannabis use. And there are continuing concerns about chemical variations and potency that could get further attention from lawmakers.
Sales are limited — for now
Red Lake Nation and White Earth Nation are selling cannabis on tribal reservation land. Leech Lake is expected to start soon, with other tribal nations weighing their next moves. They can move forward on their own timeline because they’re sovereign nations and not held back by state regulations.
For non-tribal entities, no licenses for retail cultivation, distribution or sales have been issued.
In short, that’s because the rules haven’t been set yet — and that process is in the early going.
The Office of Cannabis Management is conducting surveys of stakeholders — among them are people looking to grow marijuana on a commercial basis, companies that could test for potency and those who want to set up shops. There are other queries that cover local compliance efforts or environmental considerations around water and energy use as well as waste disposal and odor concerns.
The office will use the survey results as it drafts new rules for the industry.
Once language gets written, there will be a public comment and legal review phase. Those steps could run much of the year.
There are also expectations that social-equity measures will come into play.
The law contains grants and special licensing avenues for people who were affected by prior criminal laws around marijuana or from communities where enforcement of those laws was concentrated. The law has specific definitions around eligibility but social equity factors will be only part of the licensing determinations.
And there is a desire to head off a mismatch between supply and demand.
The Office of Cannabis Management is legally directed to issue enough licenses “to ensure a sufficient supply of cannabis flower and cannabis products to meet demand, provide market stability, ensure a competitive market and limit the sale of unregulated cannabis flower and cannabis products.”
That way marijuana won’t be so costly that an illicit market is allowed to flourish but not so cheap that cannabis businesses can’t make a go of it.
There is likely to be some educated guesswork involved. The marijuana law calls for preliminary estimates — due as soon as mid-January — about the size and growth of a regulated industry and estimates of cannabis flower and products needed to meet demand.
Some information could be gleaned from the sales of low-potency THC gummies and beverages made from hemp.
The number of businesses turning over taxes from legal sales of those products has been climbing by the month — about 1,400 at last count.
There’s a 10 percent gross receipts tax on cannabis as well as hemp-derived edibles, creams and other products. It took effect in July.
More than $4 million in cannabis tax money was collected between July and November, which translates into $40 million in total sales. That’s likely to grow exponentially when full-fledged marijuana products are widely available.
A national cannabis law firm last summer estimated that more than 700,000 people could generate $1.5 billion per year in sales in Minnesota by the end of this decade.
License applications for cannabis-related businesses should start in about a year and offerings by retail shops will be a bit behind that.
Gov. Tim Walz tried to set public expectations after meeting privately last month with advisers around the law’s implementation.
“Look, people can grow now. I think when you're looking at ‘When are you going to see a dispensary on a corner in your community or whatever,’ that's going to take time,” Walz said. “It’s not as if they’re going to pop up like Subways everywhere on every corner immediately when this happens.”