Shaping Minnesota’s cannabis industry: How regulations will be set and where the process stands

A marijuana plant grows
In this June 17 photo, marijuana plants grow at LifeLine Labs in Cottage Grove, Minn.
Jim Mone | AP 2015

This story comes to you from Sahan Journal through a partnership with MPR News.

Unexpected roadblocks have hampered the implementation of Minnesota’s new recreational marijuana law, and state officials expect it will take at least another year of work before all of its provisions take effect. 

The state is still searching for a director of the Office of Cannabis Management five months after the marijuana bill was signed into law. The first hire resigned last year and a rumored replacement left state government. On top of that, “technical and programmatic changes” have postponed the state’s promise to automatically expunge all marijuana-related petty misdemeanor and misdemeanor convictions issued in Minnesota.

The cannabis office won’t likely have a director until mid-February at the earliest, and expungements aren’t expected until late summer. Minnesota officials have always been vague about exactly when retail sales of recreational cannabis would start, but predict it will be on store shelves sometime in the first quarter of 2025. 

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Much of the slow-churn path to legalization isn’t at odds with what state policymakers predicted last year when legalization was making its way through the state Legislature, said Kurtis Hanna, a lobbyist with the cannabis consulting firm Blunt Strategies.

But some of the roadblocks are causing anxiety among marijuana industry insiders about the pace of implementation.  

The new law that went into effect last August automatically expunges all marijuana-related petty misdemeanor and misdemeanor convictions, but the state Bureau of Criminal Apprehension (BCA), which is in charge of the expungements, says on its website that the “overall technical infrastructure needs” of carrying that out are delaying the process. Marijuana convictions from other states do not qualify for expungements.

“They claim it’s software related, which is frustrating as hell,” Hanna said.

Regarding the work it is doing to facilitate expungements, the BCA website says that “more than a dozen staff and contractors” are analyzing how to identify previous marijuana records, the rules for which records are eligible for expungement, and how to disseminate information about expungements to people with convictions. The agency is also looking at how to seal those records and how they’re required to notify law enforcement and the courts about expunged records.

A BCA spokesperson declined to comment on the matter.

States typically implement marijuana expungement laws slowly because they’re not a top priority for state governments, said Frances Trousdale, a policy associate with the Denver-based marijuana reform group, Last Prisoner Project.

“Unfortunately, it’s a pretty standard tale of a decent bill that never gets implemented,” Trousdale said. “We see a lot of it.”

In its scorecard of states with the best marijuana expungement laws, the Last Prisoner Project recently ranked Minnesota at the top of the list with California, because Minnesota’s law considers felony level marijuana convictions for expungement. But the report also noted that expungements for higher-level marijuana convictions in Minnesota “require arduous reviews by a specially appointed board,” which will likely be “arduous” and “already proving to be delayed.”

The Cannabis Expungement Board, which will consider the expungement of gross misdemeanor and felony convictions, currently still has two openings that will be appointed by Gov. Tim Walz. 

Regulations will take a year to finalize

A new state agency that was created under the law, the Office of Cannabis Management, is tasked with organizing and regulating the new marijuana industry. But before a marijuana dispensary can sell to customers, the office needs to draft rules that regulate the industry. 

This includes everything from how applications for marijuana business licenses are written to how the products are packaged and labeled. Other regulations the office will need to settle are what records a cannabis business must keep, and the laboratory testing parameters for marijuana products.

Hanna said the marijuana bill hit so many committees in the Legislature last year that lawmakers and activists shaping it didn’t have enough time to “focus on the specifics of each issue.”

“A lot of it ended up pushing issues to the rulemaking body,” he said of the bill’s journey through the Legislature. “A lot of people are still holding out hope that we see rulemaking finalized in a year.”

The process to draft the rules is expected to take all year, which the state had expected from the start. Preliminary rules are expected to be published at the end of 2024, followed by a 30-day public comment period. Then, the office expects to adopt the rules in spring 2025. Governor Tim Walz has the power to veto the rules if he wishes. 

“I see it as the teeth to this bill,” said Merone Melekin, who works in outreach and engagement for the Office of Cannabis Management. “The rules have to be put into place to open this industry up.”

The office is collecting public input via online surveys through late-February that will influence the rulemaking process. The current survey is accepting public opinion until Jan. 13 about packaging and labeling, and about how the state should create a cannabis tracking, inventory, and verification system. Three more public input surveys will follow, and will focus on licensing, social equity considerations for businesses, and laboratory standards for marijuana products. 

Office of Cannabis Management spokesperson Peter Raeker said staffers from multiple state agencies are writing the rules with attorneys and “subject matter experts.” Feedback from the surveys as well as outreach to community members will also influence the process from the perspective of everyday Minnesotans.

Melekin said she has held around 50 public meetings since stepping into her role last August, and plans to hold many more this year as the rulemaking process continues. 

She said she’s received a lot of feedback about the equity promises written into the legislation, including how the agency will measure social equity candidates applying for business licenses to produce marijuana products or operate a dispensary, and how it will ensure that the licensing process remains equitable.

“These are all ideas that come up consistently,” Melekin said. 

Under the law, entrepreneurs applying for a marijuana business license could be considered social equity applicants if they live in low-income communities, have been previously convicted of a marijuana offense, or are veterans who were discharged because of a marijuana offense, among other criteria. Those factors will add weight in determining whether an applicant receives a license. 

Melekin said she’s also received feedback from people in underprivileged communities who want nothing to do with marijuana. 

“Some communities want to talk more about the public health side and don’t want to be the spokespeople encouraging folks to enter the industry,” she said. 

The Office of Cannabis Management, Melekin said, therefore also has responsibility to provide health information to communities about discouraging underage people from using marijuana.

Search for cannabis director continues

As the rulemaking process advances, the Office of Cannabis Management still doesn’t have a permanent director to oversee its operations. Walz originally planned to fill this role last fall after an application process headed by Charlene Briner, the office’s interim director.

Walz met the deadline by appointing business consultant Erin DuPree to the role last September, but she resigned one day later when the Star Tribune reported that her business sold hemp edibles that did not comply with state limits on THC, the psychoactive ingredient in hemp and marijuana that intoxicates users. 

Walz hasn’t appointed another director, although he has stated that he wants the next candidate to have regulatory experience. Chris Tolkes, who served as director of the state’s Medical Cannabis Program, often came up in marijuana industry circles as a rumored candidate for the director position, but any hopes of her filling the role were dashed late last year when she left state government and took a job as Director of Operations for the City of Minneapolis.

Briner’s role as interim cannabis director expires on Feb. 15, which raises questions about whether a permanent hire is imminent. But Walz spokesperson Claire Lancaster would not specify a timeline for when he would make a pick. The state has not reopened the application process for the position. 

“We are grateful for Charlene’s leadership in keeping implementation of the cannabis law — including moving forward on processes for licensing, regulation, and supply chain — on track while we work to hire a permanent director,” Lancaster said.