At long last, Minnesota’s recreational cannabis industry is officially budding. In the early morning hours of May 20, 2023, the Minnesota Senate voted to legalize recreational cannabis by passing a final bill which, once signed by Governor Tim Walz, will operate as the legal framework for Minnesota’s brand-new and heavily regulated recreational cannabis industry. Once the bill is signed into law, Minnesota will become the 23rd state to legalize marijuana and will set a new market ablaze for a wide variety of potential participants including consumers, cultivators, retailers, processors, and even event organizers and delivery service providers.
Due to limitations in the bill on fully vertically integrated business structures, some integral participants in the new industry will be the companies specializing in the transportation, shipping, and logistics of cannabis. While this will undoubtedly become a lucrative segment of the industry, it will also come with a swath of potential legal hurdles and pitfalls. Here are five considerations every future cannabis transporter should keep in mind as it sparks up its cannabis shipping strategies.
- Transporter Licensing. One of the 16 different license types authorized by the final bill (H. F. No. 100A) is a cannabis transporter license. The cannabis license application process will be primarily managed by the Office of Cannabis Management (the “Office”), and will impose a wide variety of applicant requirements and procedures prior to the issuance of a transporter license. The Office will consider numerous criteria when making license determinations including general market stability, social equity considerations, security and record-keeping capabilities, business plan and financial strength, industry experience, environmental plans, equipment capabilities, and logistics plans, among others. Accordingly, those aiming to break into cannabis shipping and transportation should be prepared to address and satisfy application requirements that go far beyond simply having an existing transportation business.
- Limitations on Transporters Holding Other License Types. The final bill also limits other cannabis license types that a cannabis transporter is allowed to hold. Specifically, those who obtain a cannabis transporter license may hold a cannabis wholesaler license, a cannabis delivery service license, and a cannabis event organizer license, but no other cannabis-related licenses. Given these limitations, a decision to apply for and/or hold a transporter license could, in certain situations, result in a company being prohibited from participating in other aspects of the cannabis economy.
- Authorized Actions of Transporters. The final bill also limits the types of cannabis-related products and materials a licensee is allowed to transport, and the locations and types of businesses that transporters are allowed to ship to and from. Those who obtain a transporter license need to be cautious regarding what products are being transported and where they are being loaded and delivered.
- Records and Storage Requirements. The bill also imposes stringent records and storage requirements. Among other requirements, all cannabis transporters need to maintain and carry requisite proof of licensing, as well as all transportation records, logs, chain of custody documents, and financial records for a minimum of 3 years. In addition, cannabis products must be transported in locked and secure storage compartments which, depending on the type of storage, may only be accessed by separate key or combination pad.
- Delivery, Passenger, and Inspection Restrictions. Finally, the bill imposes additional restraints on the delivery schedules and permitted passengers who may accompany cannabis shipments. All cannabis delivery times and routes must be randomized, which will force transporters to account for added uncertainty in completing shipments. Additionally, the mandated randomized delivery routes must be staffed with a minimum of two employees, and at least one delivery team member must remain in or with the delivery vehicle at all times. To ensure compliance and protect against theft or other foul play, the bill prohibits any person under the age of 21 or who is not employed by the licensed cannabis transporter from entering the transporting vehicle, and states that any cannabis-transporting vehicle may be stopped or inspected at any cannabis business or en route during transportation.
These five legal considerations represent just a small sampling of the statutes and rules that will govern future cannabis transporters in the State of Minnesota. Ultimately, the potential legal hurdles and issues affecting cannabis transporters will expand once the Office begins accepting licensing applications and the recreational cannabis market opens for business. Winthrop & Weinstine boasts a wide array of experienced attorneys who stand at the ready to assist in providing legal services to any person or business who hopes to be a future participant in the budding cannabis industry, whether as a transporter or in any other capacity.
