Our path forward ensures we remain on track to launch Minnesota’s new cannabis market and also preserves some of the social equity benefits that were at the heart of the preapproval process and that are foundational to the law as it was originally conceived.”

OCM Interim Director Charlene Briner

In my approach with every city council is I recommend we start more conservatively.”

Hastings City Attorney Kori Land

For more information about Cannabis in Minnesota visit the Office of Cannabis Management website at mn.gov/ocm

Minnesota’s Cannabis legalization process has been far from smooth. Years into legalization, the Office of Cannabis Management’s (OCM) first process for licensing cannabis businesses within the state was halted, and the preapproval lottery process abandoned, leaving many businesses without official state registration even after years of doing business in Minnesota.
Social Equity Applications
The state licensing first put forward by the OCM was a preapproval lottery for social equity applicants. A key part of the legalization process of Cannabis in Minnesota has been social equity. Ensuring that those whom “experienced a disproportionate, negative impact from cannabis prohibition and cannabis use,” were able to benefit from the legalization was a key part of the bill’s passage according to the website for the Minnesota Office of Cannabis Management’s Division of Social Equity.
The first round of applications for social equity applicants were accepted from July 24 to August 12, in a lottery process. Applicants for the social equity lottery had to be verified for falling into at least one category defined by the OCM in order to apply. Those categories included being convicted of, or having a parent, guardian, child, spouse or dependent convicted of possession or sale of cannabis prior to May 2023, being a military veteran, or being a resident of an area deemed having a high cannabis enforcement rate.
On November 25, 2024 Ramsey County District Court Judge Stephen Smith ended the social equity lottery process after would-be applicants who were denied pre-approval for the lottery sued claiming the pre-approval process wasn’t properly defined and lacked an appeal process. The lottery was expected to take place the next day on November 26.
The OCM released a statement that same day about Judge Smith’s decision: “While we are disappointed by the decision to prevent OCM from moving forward with the license preapproval lottery tomorrow, we stand by the process used to review applications. Minnesota’s approach has always aimed to protect the integrity of a social equity license, and the rigorous review also allowed us to identify and prevent bad actors from entering the system. State statute sets high standards for applicants to successfully complete applications while also filtering out those with malicious intent.
We remain committed to launching an equitable, sustainable, and responsible adult-use cannabis marketplace in Minnesota.”
Next Steps for State Licensing
The OCM provided an update on December 11 on the path forward for state licensing, scrapping the preapproval process entirely: “to avoid further delay and risks to social equity, OCM is ending the license preapproval process and moving forward with opening a standard licensing cycle for both social equity and general applicants beginning early next year.”
The 648 applicants who were already preapproved will be automatically moved forward and the OCM also lays out a path for those denied by the preapproval process.
OCM Interim Director Charlene Briner said about the pivot “Our path forward ensures we remain on track to launch Minnesota’s new cannabis market and also preserves some of the social equity benefits that were at the heart of the preapproval process and that are foundational to the law as it was originally conceived.”
The new timeline put forth in the December 11 update includes a window that ends January 30 for social equity verification, the opening of license applications for all applicants including social equity applicants on February 18 which will close on March 14, and a lottery for these applicants sometime in May or June 2025.
Hastings Zoning
On December 2, the Hastings City Council adopted an several ordinances regarding zoning for cannabis businesses and cannabis business registration. These ordinances were meant to have laws on the books within the city for when the OCM provides more clear instructions for business registration and state oversight for cannabis business.
The ordinances were advised upon by City Attorney Kori Land, who also is the City Attorney for Cottage Grove, Stillwater, and Randolf. Hastings came to its policies regarding zoning for cannabis businesses through several work sessions of the city council where Land presented on the regulations available to municipalities from the state including caps on the number of businesses and buffer zones surrounding cannabis businesses.
Because Cannabis is still very much in legal limbo not only regarding the lack of state oversight but the patchwork legality across the county, much of the discussion of those meeting was characterized by a reticence to provide too much autonomy for Cannabis businesses.
Creating more stringent rules for the new Cannabis industry at least initially allows municipalities greater control over how and where businesses appear as well as maintaining the option to loosen those regulations in the future if no problems occur. “In my approach with every city council is I recommend we start more conservatively,” said Land.
She gave the example from her time representing West St. Paul of the proliferation and eventual issues with the number of pawn shops in the city. The city came to Land, wondering how so many pawn shops were able to open and the answer was simply: “because you had no regulation, because you had no zoning ordinances that put them in specific zones so they just populated your commercial corridor,” said Land.
By not laying out an ordinance beforehand, the city had allowed proliferation of something they might not have otherwise have wanted.
Land’s argument of starting with stricter regulation and then easing them later was largely agreed with by the Hastings City Council.
Of particular focus for the zoning were buffer zones surrounding cannabis businesses that would separate them from schools, park attractions, and residential treatment facilities among several others. While the city council did move forward with these buffers, they reined them in, lowering the amounts for park attractions, ending certain buffers at highways, and creating an area in which those buffers did not apply, like the downtown corridor.
In creating zoning maps for future cannabis businesses, the city council leaned towards looser regulation citing both the business-friendly nature of the regulation, as well as how similar businesses like liquor stores or bars are decidedly less strictly regulated than future cannabis businesses.
“Something I want our residents to know is that there are no buffers or boundaries on anything like this for alcohol or guns and so this is exclusive to Cannabis and we do want to make sure we are keeping areas open for some businesses,” said Councilor Angie Haus.
Temporary Local policies
While Hastings has developed a system for Cannabis business registration and a system of zoning and regulation for each of the 13 different types of Cannabis businesses as laid out by the OCM, all of this work comes in the absence of broad statewide guidance, especially concerning licensing.
Minnesota’s legalization process has allowed for a large amount of local autonomy including moratoriums on the sale of cannabis within municipalities until December 31, 2024. “Every community has different needs, different leadership, different policies you have to have for these kinds of issues,” said Land.
As time has gone on with local policies, however, an increasing concern has been spending the time and resources to develop a local plan only to have it superseded by state law once it is finalized.
“My only concern in all of this is that as we put this all together, the legislature is going to meet again on Jan. 20 and after the last two sessions and how things change, that we will be coming back to deal with this somewhere along the way,” said Councilmember Dave Pemble
To address this concern, Land specifically worked with elements provided by the OCM in order to have Hastings ordinance not radically differ from what the state will provide. “I’m hoping that even if we have to amend it, that it won’t be significantly,” said Land.
For more information about Cannabis in Minnesota visit the Office of Cannabis Management website at mn.gov/ocm