Minnesota Continues to Move Toward Recreational Legalization

Jan 31, 2023

On Monday, January 30th, another Senate committee approved a bill to legalize marijuana in Minnesota. In a 5-3 vote, the Senate’s Jobs and Economic Development Committee passed the bill sponsored by Sen. Lindsey Port. This comes just days after the same bill passed the Senate’s Commerce and Consumer Protection Committee, and a companion bill in the House, passed the Labor and Industry Finance and Policy Committee. The next stop for the Senate bill is the State and Local Government and Veterans Committee, while the House bill is scheduled to be heard in the State & Local Government Committee later this week. The House bill, which is similar but not identical to the Senate bill, is sponsored by Rep. Zack Stephenson.

Much of the revised bills that are advancing through committee are consistent with a former bill sponsored by former Majority Leader Ryan Winkler that passed the House in 2021, but there are a few key changes. For example, the Senate bill adds a new license category for businesses that sell “lower-potency edible products” under Minnesota’s unique THC law that passed last year, aimed at clarifying how hemp companies could legally market certain products. That bill drew some criticism when it was reported that some Senate Republicans may not have fully understood the nature of the legislation. Regardless, hemp-derived, low-dose THC products are legal in Minnesota and the tweaks to the Senate bill aim to allow businesses currently selling those products to continue to do so without having to go through a new licensing process. The new bill also proposes reduced regulatory requirements for those companies to ensure that shops currently selling low-THC beverages and edibles don’t face disruption. Additional components of both the House and Senate bills are:

Adults (defined to be 21 and older) could purchase up to two ounces of cannabis and cultivate up to eight plants, four of which could be mature.
Adults could possess up to two ounces in a public place and up to five pounds in a private dwelling.
Social equity applicants would receive a scoring boost in the application process; social equity is defined to include individuals living in low-income and disproportionately impacted neighborhoods for the last five years and military veterans who lost honorable status due to a cannabis-related offense.
Municipalities and counties could own and operate dispensaries.
Municipalities would not be able to ban or opt-out of allowing cannabis establishments.
Cannabis sales would be taxed at 8%.
The Office of Cannabis Management would be created and would oversee the market and the issuance of licenses.

It is clear that there is momentum and optimism in the Minnesota legislature to pass marijuana legalization, and there is cautious optimism that it will get done this year after falling short on previous attempts. A lot of that optimism comes from the fact that the Democratic-Farmer-Labor party now controls both chambers of the legislature, whereas last session they only had a House majority. Gov. Walz apparently shares that optimism as well, because his latest biennial budget request included proposed funding to implement marijuana legalization and expungements, and included projections about the significant marijuana tax revenue his office believes the state will earn after legalization. If legalization is going to happen this year, it needs to get done by May. The Minnesota legislature adjourns until next year at the end of May, so Minnesota lawmakers are on the clock, and they have four months to get something done.

We are following the legalization process in Minnesota closely, so make sure to continue to check our blog for updates. You can contact the author at david.standa@gmlaw.com.

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