Legal marijuana sales in Minnesota may be delayed with early social equity license lottery canceled
Office of Cannabis Management Interim Director Charlene Briner said the office will move forward with a standard licensing process for applicants early next year.
Minnesota will not hold a lottery to give early approval for recreational cannabis business licenses based on social equity criteria, state cannabis regulators announced Wednesday. The move could mean months of delay for legal sales in the state.
The state last month started taking early applications from prospective businesses who could demonstrate they were from a high-poverty area, a veteran or negatively affected by the prohibition of cannabis. A lottery was scheduled for Nov. 26.
But a Ramsey County judge blocked that process after two applicants the office rejected filed a lawsuit to challenge it. Now, citing the possibility of further delays, Office of Cannabis Management Interim Director Charlene Briner said the office will move forward with a standard licensing process for applicants early next year.
“We believe this approach will allow for the licensing of cannabis businesses to proceed without additional delay, without ambiguity, and will allow OCM to issue licenses as early as possible in 2025,” she told reporters on a Wednesday conference call.
Delayed launch
With the new timeline Briner presented, it’ll likely mean a delay for the launch of Minnesota’s legal cannabis marketplace, which state officials originally estimated would begin in early 2025. Minnesota legalized cannabis in 2023.
Minnesota started taking social equity preapproval lottery applications in November. The aim was to give certain groups earlier access to the new legal cannabis marketplace. While the preapproval lottery is no longer happening, the state will continue to make considerations for licenses based on social equity criteria — just not with an early lottery.
Cases tied to Ramsey County Judge Stephen Smith’s stay of the social equity lottery are pending before the Minnesota Court of Appeals.
The challenge was brought by Jodi Connolly and Cristina Aranguiz, who claimed the state didn’t give clear reasons for their application rejections. More than 1,800 applied for the lottery, two-thirds of whom were rejected. There were 282 licenses available.
The Office of Cannabis Management had defended its initial process, saying they were attempting to root out applicants looking for a quick profit instead of actually setting up legitimate businesses.
General licensing to open Feb. 18
Now that the preapproval lottery is canceled, anyone who applied for preapproval can get a refund of their application fee until Jan. 10, 2025. General licensing for all applicants will open on Feb. 18 through March 14, and the state tentatively plans to hold a general lottery for licenses, both social equity and standard, sometime in May or June.
The license lottery has to happen before the state starts allowing cannabis sales off tribal land. Sales have been allowed on reservations since 2023. Briner said the preapproval lottery’s cancelation will mean delays.
While the preapproval lottery is no longer happening, the 648 applicants who qualified will be able to automatically move forward in the next licensing process, the Office of Cannabis Management said.
In a joint statement on the delay, Rep. Zack Stephenson, DFL-Coon Rapids, and Sen. Lindsey Port, DFL-Burnsville, chief authors of the legalization bill in the legislature, said they were disappointed by the delay, which they said was due to “a few bad actors flooded the preapproval pool with duplicate or misleading applications.”
“While this significant shift in the licensing timeline and social equity process is certainly a setback, it is not the final word on inclusivity and equity in our process,” they said. “Minnesota is still on the road to a robust, fair recreational cannabis market, and we are proud of the Office of Cannabis Management’s efforts to uphold our state’s values.”
Recreational cannabis use and growth of a limited number of plants for personal use has been legal in Minnesota for more than a year, but the process of creating a legal marketplace and regulatory framework for the substance was expected to take a year or two.
The process has had some bumps. Gov. Tim Walz’s first pick to head the Office of Cannabis Management withdrew after it emerged her cannabis business had sold products illegal in Minnesota because they contained too much THC.
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