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Minnesota’s cannabis industry has had a heady start.

Since retail sales of adult-use cannabis products 

, the number of non-tribal dispensaries selling recreational products has roughly tripled. That’s according to the state Office of Cannabis Management.

The state agency is tracking market expansion through indicators like the number of cannabis plants growing, issued licenses and retail sales of recreational products. All of those indicators are signaling growth.

And as a new year begins, some market experts say it’s only a matter of time before the industry gets flooded with new dispensaries and cannabis supply. As of Wednesday, the Office of Cannabis Management has approved more than 125 cannabis licenses — the majority of which are retail.

“Rather than it being a straight line increase, it's definitely a logarithmic increase — first a trickle, and then a flood,” said Jen Reise, a cannabis business consultant who works with several entrepreneurs across the state.

Among the list of recipients who recently received a license is the City of Anoka. The city is poised to be the first municipal dispensary to open in the country, with a grand opening scheduled in the next few weeks.

Currently, the majority of cannabis on the market is either grown by the seven tribal nations with compacts for cannabis business or Minnesota’s two medical cannabis providers, RISE and Green Goods. Therefore, supply has been somewhat limited since the state began issuing business licenses last summer. 

Reise predicts Minnesota will see more cultivators growing cannabis in 2026 as well as an explosion of dispensaries, owned both by multi-location, corporate companies and independent businesses.

She’s looking forward to Minnesotans finally seeing what a craft cannabis market could look like.

“I hope that Minnesota will enjoy the opportunity to have those independent craft businesses, just like Minnesota embraced the craft brewery market as it came to fruition. I'm hoping that people will be doing tours, trying the ones in their neighborhood, giving these small businesses a chance,” she said.

Around 1,400 businesses now have “pre-approved” status, meaning they’re on the runway but haven’t jumped into the market yet. 

Office of Cannabis Management head Eric Taubel previously told MPR News those businesses are likely waiting for the supply chain to set up more before opening their businesses.

He’s still not sure when they’ll decide to make the jump.

“I would expect that our adult-use sales will rise substantially over the course of 2026 as we add more product, more sales and more retail locations,” Taubel said.

Last month, President Donald Trump issued an executive order to reclassify cannabis from a Schedule I to Schedule III substance. 

According to Trump’s order, Schedule I drugs (i.e. heroin and meth) have no accepted medical use and are highly addictive, while Schedule III drugs (i.e. Tylenol with codeine and ketamine) are classified as having “a potential for abuse less than the drugs or other substances in Schedules I and II.”

The order is expected to open up more research into the medical uses of cannabis and reduce tax burdens for the country’s multibillion dollar cannabis industry. But that hasn’t happened yet.

“All the executive order did was to direct the federal government to continue the administrative process of rescheduling. So it's not automatically rescheduled by this executive order,” said Reise.

Taubel agrees that the reclassification, if it goes through, would have a substantial impact on Minnesota’s cannabis market.

“That change would open up a lot of possibility for businesses to become more successful, to be more resilient and hopefully not be quite as subject to some market conditions as they currently are, given that really high effective tax rate,” he said.

But there are some road bumps that could slow the expansion of Minnesota’s cannabis market. Taubel said applicants are facing challenges with licensure and the logistics of becoming operational.

The Office of Cannabis Management prioritizes completing review of all license applications and processing them quickly. But once they do their job, the hardest steps come after: finding a location, building it out, getting local zoning approval and developing policies compliant with state law.

“Realistically, the biggest challenge is the challenge of opening a cannabis business. It’s really, really costly and there’s just not a lot of money out there to invest in these businesses,” he said.

St. Paul cannabis testing lab says turnaround times have doubled

Meanwhile, demand is outpacing current capacity at one of the three labs approved to test all cannabis and hemp-derived products in Minnesota, including Legend Technical Services in St. Paul.

Taylor Schertler, hemp and cannabis manager at Legend Technical Services, said the lab’s turnaround for testing is now at four to five weeks, up from the one to two week turnaround time Schertler conveyed to MPR News in late October.

“We are still getting a more-than-steady increase in new clients, both on the recreational cannabis side with new cultivators coming online and on the hemp-derived product side of things,” he said.

For months, Schertler was expecting backlogs because of a looming testing bottleneck for both cannabis and hemp in early 2026.

More available cannabis supply was expected at the same time as Minnesota’s hemp-THC industry had to make a hard shift with having their products tested in state on Jan. 1.

But the state pushed that deadline to March 31, giving Minnesota’s three testing labs more breathing room and allowing a few more months for the hemp industry to test out of state. Now, Schertler says Legend has a 10-to-1 ratio of recreational cannabis samples to test versus hemp samples.

“This postponement of the deadline is just moving the goal post. It's not an end-all-be-all fix to the issue of delays in the industry. It does allow us to focus on just cannabis and cannabis-related products right now, but it's more so kind of taking the foot off the gas to allow us to get our feet under us,” he said.

He says Minnesota is slowly closer to getting more cannabis on the market, but most of the supply chain right now is stuck in cultivation.

“The plants have been harvested, they are beginning to be tested, and then once that is complete, it'll move to the next step of the supply chain — for sale as smokeable flower material, or to extractors to be able to make distillates for the eventual production of cannabis-derived products,” he said.

Schertler says he’s still expecting a ramp-up in cannabis supply in the next few months. By the end of quarter one and beginning of quarter two this year, he predicts cannabis products from recreational manufacturers will finally hit the market.

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Marijuana in Minnesota

Nicole Ki

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Cannabis market experts said they’re expecting gradual growth in Minnesota’s new adult-use industry as the new year kicks off, with a potential “explosion” by the summer.

Steady growth expected in Minnesota’s adult-use cannabis market going into 2026

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