With the Minnesota House passing its version of an adult-use cannabis bill this week, and the Minnesota Senate scheduled to debate—and potentially vote on—its own bill, here are 5 things to keep your eye on.

1. Differences are Narrowing.  In their original forms, the House and Senate bills were dramatically different, with some describing the Senate bill as being more business-friendly, and the House bill as being more keenly focused on social equity issues.  Over the past few weeks, those differences have narrowed dramatically, leaving only a few open issues to reconcile (for example, differences regarding the amount of flower an individual may possess, and the tax issue mentioned below). Will the House and Senate be able to reconcile their remaining differences before session ends on May 22 in order to get a unified piece of legislation in front of Gov. Tim Walz for signature?

2. One Size Does Not Fit All.  Both bills contain significant restrictions on vertical integration—meaning a single company controlling the entire process, from seed to store. However, each bill creates the possibility of a fully integrated operation, as long as the licensee satisfies specific size restrictions.

3. If You Can’t Have It All, How Do You Choose?  Regardless of which bill you consider, there will be no shortage of licenses to choose from.  Each version proposes fifteen different classes of licenses, including licenses for cultivation, manufacturing, transporting, wholesale, retail, and even cannabis events — in addition to the size-restricted vertically integrated “microbusinesses” and “mezzobusinesses” mentioned above. So, what are you jonesing to do?

4. What About the Tax Man?  One of the differences between current House and Senate versions involves how cannabis sales will be taxed.  The House version proposes an 8% tax on all sales and purchases through June 30, 2027, and a variable rate after that, based on the projected expense of regulation.  The Senate version proposes a flat 10% rate.

5. Yes, In Your Back Yard (Literally).  Both the Senate and the House versions are clear: the Minnesota legislature does not want individual cities or counties interfering with state-wide adult-use legalization.  Therefore, while municipalities may place certain restrictions on cannabis businesses, they will not have the authority to deny registration altogether.  Oh, and about that back yard thing? Under both versions, every Minnesotan would have the right to grow up to eight cannabis plants (with no more than four being mature at any given time)—and that includes growing in your back yard!

April 26, 2023