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Focus on New Laws: Cannabis Law Now Allows Early Cultivators, Includes Other Policy Changes
Legislation passed during the 2024 session did not significantly alter cities’ zoning authority in approving cannabis businesses but it did make other modifications including accelerating the timeline for cannabis cultivators.
New laws passed during the 2024 legislative session, included in Chapter 121, make numerous amendments to the existing structure governing cannabis regulation in Minnesota.
These changes include:
- Modifications to when licenses will be issued.
- New requirements on how cities communicate with the Office of Cannabis Management (OCM) when reviewing applicants for cannabis licenses.
- Allowing municipal cannabis stores to bypass the license lottery if certain criteria are met.
Additionally, OCM has produced new guidance that cities may find helpful when reviewing the existing law and considering how it should be implemented locally.
Early cannabis cultivator licenses
The new law requires OCM to begin accepting applications for social equity applicants with applications closing on Aug. 12, 2024. A successful social equity applicant will gain preapproval to operate a cannabis business.
The legislation’s language regarding early cultivation allows businesses that have received preapproval to immediately begin cultivating cannabis if the business:
- Complies with local zoning ordinances.
- Complies with state fire and building codes.
- Complies with Minnesota rules related to medical cannabis.
No other cannabis-related operations may commence until OCM has adopted final rules, which are expected early in 2025.
This new exception for early cultivation is a change from the original legislation, which prohibited all cannabis operations, including cultivation, until rules were adopted.
As a result of this new law, cities should review their zoning ordinances and determine if changes need to be made to properly regulate cannabis cultivation. Cities still have the ability to adopt a moratorium on cannabis businesses. A moratorium may be a proper action if a city cannot effectively amend its zoning ordinances in time to deal with early cultivation.
Many cities have already adopted moratoriums related to cannabis businesses. In those cities, an approved social equity applicant would be prohibited from operating under the early cultivation exception because they would not meet local zoning ordinances.
The League encourages cities to work with their city attorney to determine the proper course to deal with the early cultivation of cannabis.
Policy changes
The 2024 language included several policy changes that may impact cities. The changes to the local control section of the cannabis law were modest, but the new law requires that local units of government inform OCM if a business does not comply with local zoning and land use laws. The previous law required that local units of government inform the office if a business did comply with local zoning and land use laws. Under the new law, OCM may issue a license if the local unit of government does not provide certification within 30 days of receiving the application from the office.
The new law also allows the office to process applications for eligibility before sending them to cities. The intent behind this change is that only businesses that have been vetted by the office need to be shared with cities.
Changes were also made to the laws governing municipal cannabis stores. The new law allows municipal cannabis retailers to bypass the license lottery and automatically receive approval if they meet minimum requirements, pay all the required fees, and submit all the information and planning documents needed to OCM. However, municipal cannabis stores will not be counted against license limits.
License limitation authority
The OC has started to provide more guidance and materials for cities to help them prepare for cannabis businesses entering the market. Most notably, it has addressed the question of how the one active registration for every 12,500 residents limit applies to cities and counties. The limit functions as a floor of one cannabis retailer for cities with populations of 12,500 or less. For cities with populations from of 12,501 to 25,000, the floor would be two cannabis retailers. This is assuming there are at least that many applicants and other limits do not apply to the city.
For example, if a city and its county wish to limit the number of cannabis retailers to the minimum, it may make sense for the city to delegate its licensing and registration authority to the county. But if a city does not wish to limit registrations to the minimum, or if it does but the county does not plan to do so, the city would likely prefer to retain its registration authority.
More information
The League has resources that will provide additional information and background on the adult-use cannabis law and recent changes.