As of May 2023, Governor Tim Walz signed the bill legalizing recreational cannabis in Minnesota becoming the 23rd state to legalize recreational cannabis.
This is great news for the cannabis industry, but what is the fine print of the legalization and what’s next for the state?
The Details:
- Effective August 1, 2023, the use, possession, and cultivation of cannabis is legal within the state of Minnesota.
- Commercial licenses for sales will require an additional 12 to 18 months, in order to establish the new regulations.
- The tax rate for cannabis will be 10%.
- As of March 1, 2025, existing medical cannabis businesses can receive new combination licenses that would allow them to participate in the adult-use market.
- All misdemeanor marijuana convictions will be expunged and felony convictions for sale or for possession, will be looked at by a board individually on a case-by-case basis to see if the charge can be lessened or expunged completely.
- As a part of the bill, $3 million has been allocated to the University of Minnesota to set up a center for cannabis research.
What does the new recreational marijuana law do?
“It legalizes the possession and use of marijuana for Minnesotans 21 and older. It creates a new state agency, called the Office of Cannabis Management (OCM), tasked with licensing cannabis and hemp businesses and overseeing a legal recreational market, as well as the existing medical cannabis and hemp-derived markets. The law mandates the expungement of all misdemeanor marijuana offenses and creates a Cannabis Expungement Board to review felony offenses for possible expungement on a case-by-case basis. It also imposes new rules and requirements for hemp-based THC drinks and edibles, which exploded in popularity after they were legalized last year.” (star tribune)
The Opportunity Magnitude
Figures provided by the Marijuana Policy Group, based in Denver, unveil the potential scope of the cannabis market in Minnesota upon the legalization of adult-use. Year one is projected to witness cannabis sales soaring to $426 million, with a staggering growth trajectory leading to $1.2 billion by the fifth year.
Moreover, this momentous shift towards legalization is poised to exert a profound influence on the state's projected tax revenue. Initial estimates suggest that tax earnings in the inaugural year could amount to $112 million, eventually surging to $300 million within the fifth year. The ripple effects of legalization are projected to deliver an annual economic impact of $2.6 billion, generating an impressive workforce of 20,000 individuals.
As the recreational program shapes in Minnesota, we will keep you updated with all of the necessary information on how to open a dispensary in Minnesota.
