Cannabis

Since the 2023 law to legalize adult-use cannabis, Minnesota’s cannabis market is being built in public, in real time. The cannabis agreement that was reached this session aims to address the market needs of cannabis businesses, while protecting both adult-use and medical cannabis consumers.

PASSED

Streamlining the Cannabis Supply Chains (SF 4541 – Dibble): 

The 2025 Cannabis CCR required OCM to develop a proposal that would streamline the AU and medical cannabis supply chains to ensure continued access to medical cannabis. Under current law, cannabis businesses must keep medical and adult-use business activities and products entirely separate. The streamlining approach outlined in the Final Cannabis agreement both encourages businesses to participate in the medical cannabis market and safeguards Minnesota’s medical cannabis supply. 

Updates for Cannabis Businesses (SF 4540 – Dibble): Currently, cannabis businesses are not allowed to change their business structure. For example, a sole proprietor that wishes to become an LLC (or any other type of business) is prohibited from doing so. A provision in the final Cannabis agreement fixes this issue by removing the requirement for a new cannabis license when a cannabis business structure changes. Instead, business structure changes will now be treated as a transfer. 

This provision is especially critical following a federal ban on hemp products containing more than 0.4 milligrams of THC that’s set to go into effect at the end of the 2026. 

Expedited Testing for Medical Cannabis: 

To address the shortage of cannabis testing labs in the state, the cannabis agreement includes a House provision to allow cannabis facilities to establish a process to prioritize the testing of high medical need products starting January 1, 2027. 

Psilocybin Federal Funding Request (A9 – Oumou Verbeten): 

A growing body of research and experience indicates that psychedelics can help people suffering with post-traumatic stress disorder, traumatic brain injuries, drug addiction and other mental health disorders. Trump singed an executive order in April that directed the FDA to prioritize a review of psychedelic compounds and instructs the DEA and other federal agencies to reduce restrictions that may impede research. The executive order also allocates $50 million for federal-state collaboration.

An agreement was reached with the House and OCM on a report to the legislature on the implementation of a Psilocybin Pilot Program. The agreement also requires OCM to apply for any available federal funding for the implementation of a state-based psilocybin program. 

Large Format Hemp Beverages: 

Starting August 1, hemp retailers are allowed to sell beverages in child resistant, resealable bottles containing at least 750 milliliters and 17 or more servings. Each serving may contain up to 5 milligrams of THC, as well as up to 400 milligrams per container of approved nonintoxicating cannabinoids, such as CBD, CBC, CBN, or CBG. 

“Ratio Hemp Products” for Recreational Use: 

The final Cannabis agreement included a provision to legalize the sale of “ratio hemp-infused cannabis products” containing up to 10 milligrams of THC per serving (and up to 200 milligrams per package for edibles) and up to 100 milligrams per serving (up to 1,000 milligrams per package) of approved nonintoxicating cannabinoids, such as CBD, CBC, CBN, or CBC. This means that starting January 1, consumers will be able to buy products that contain both THC and CBD outside of the medical market. 

Hemp QR Code (SF 4429 – Port): 

OCM began licensing LPHE business in October – the market for these products had been operating under a transition period while the businesses were being reviewed and processed. Various hemp businesses in the MN Craft Brewers Guild shared concerns that the current labelling requirements for Lower Potency Hemp Edibles (LPHEs) only benefits larger businesses that can afford repacking costs and disproportionally impacts smaller companies that might not survive without revenue while waiting to repackage or produce compliant inventory. These concerns are addressed through Senator Port’s SF 4429 – the bill allows these labeling requirements to be listed on a QR code. 

Local Control Changes (SF 4519 – Dibble): The cannabis agreement makes several changes that clarifies the role of local units of governments in the licensing process for cannabis businesses. Notably, a provision that clarifies that when determining the minimum number of retail locations, local units of government are required to round up. This change further clarifies that no local jurisdiction may opt out of retail registrations, and that the minimum for any population is to allow at least one retail location. 

LPHE Lab Testing Extension (SF 3670 – Port): This fall, Minnesota Hemp Beverage Producers and other hemp advocacy groups shared their concern that there would be a testing bottleneck if the current testing requirement in state law remained the same. The date push in Senator Port’s SF 3670 was recommended by OCM, as it will push back the testing requirement date to when the legislature is in the 2027 session and can address testing capacity at that time if the same problem persists. 

Other Miscellaneous Provisions: 

• SF 4875 (Port): Clarifies that medical consultants and pharmacists can be employees or contractors at micro retailers, mezzo retailers, and retail license holders. Marcrobusinesses are specifically not included in this clarification at the request of UFCW. 
• HF 4688 (West): Allows businesses to transport product to testing for 30 months until more transporters come online with protections for tampering and deceit. 
• HF 3818 (West): Changes TPOI provisions to allow a true party of interest to operate municipals without being held to existing TPOI provisions in the cannabis chapter. 
• TPOI Changes (West): Changes TPOI provisions to allow a TPOI to own up to 33% (instead of just 10%) of up to 4 social equity businesses. 
• Preliminary Applicant Extension Window (Hanson): Requires 6-month extension and discretionary second 6-month extension for good faith efforts to extend preliminarily approved applicants. This change allows more time for a preliminarily approved business to secure capital or other infrastructure before their status expires. 
• SF 4542 – Dibble: Restructures the cannabis event organizer license type by shifting the license to an annual license structure that is eligible for renewal. 
• SF 4401 – Dibble: Requires the OCM to complete an annual market analysis of the cannabis industry and submit an annual report to the Legislature. 
• SF 4540 – Dibble: Gives OCM the authority to inspect unlicensed facilities where lower-potency hemp edibles are manufactured, processed or sold and allow the office to assess civil penalties to those facilities.