{"id":73541,"date":"2024-03-27T09:13:22","date_gmt":"2024-03-27T17:13:22","guid":{"rendered":"https:\/\/cannabiscultivatornews.com\/home\/index.php\/2024\/03\/27\/minnesota-lawmakers-propose-raft-of-changes-to-state-marijuana-law-including-homegrow-and-equity-adjustments\/"},"modified":"2024-03-27T19:46:14","modified_gmt":"2024-03-28T03:46:14","slug":"minnesota-lawmakers-propose-raft-of-changes-to-state-marijuana-law-including-homegrow-and-equity-adjustments","status":"publish","type":"post","link":"https:\/\/cannabiscultivatornews.com\/home\/index.php\/2024\/03\/27\/minnesota-lawmakers-propose-raft-of-changes-to-state-marijuana-law-including-homegrow-and-equity-adjustments\/","title":{"rendered":"Minnesota Lawmakers Propose Raft Of Changes To State Marijuana Law, Including Homegrow And Equity Adjustments"},"content":{"rendered":"

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\u201cProhibition of alcohol ended nearly 100 years ago and we still have a liquor bill nearly every year.\u201d<\/em><\/p>\n

By Peter Callaghan, MinnPost<\/strong><\/p>\n

The lead sponsors of 2023\u2019s recreational cannabis law are sensitive to suggestions that the sweeping law needs \u201cfixing.\u201d Such a word might be interpreted as endorsing Republican talking points that the bill\u2014along with much of the work of the 2023 session\u2014was rushed and that mistakes were made.<\/p>\n

Instead, top sponsors of House File 100 say changes they are both proposing, as well others filed by other lawmakers, are expected and routine. The law will be \u201cmodified,\u201d not fixed.<\/p>\n

\u201cAs I said many times last year, it won\u2019t be the last time the Legislature hears a cannabis bill,\u201d said Sen. Lindsey Port, the Burnsville DFLer who was the lead sponsor in the Senate. \u201cProhibition of alcohol ended nearly 100 years ago and we still have a liquor bill nearly every year.\u201d<\/p>\n

That said, what is being proposed to change the law at the midpoint between legalization and retail sales? Both Port and Rep. Zack Stephenson (DFL-Coon Rapids) have said they expect to have an omnibus cannabis bill that will contain all changes in one package.<\/p>\n

The Office of Cannabis Management\u2019s 100-page proposal\u2014Senate File 4782<\/a>\/House File 4757<\/a>\u2014is the stage setter. Even though these bills show Port and Stephenson as sponsors, they put their name on top as a courtesy to the Office of Cannabis Management (OCM). Their own work will likely be affixed to the OCM bill.<\/p>\n

The long list of changes would adjust how so-called social equity licenses are distributed, change the ownership ratios for such license holders, bring the hemp-derived market regulation under the Office of Cannabis Management sooner and put numerical caps on each type of license rather than let OCM decide how many the market requires. Many of the changes were suggested as ways to get to the same end point as HF 100 but with less risk of litigation.<\/p>\n

Primary among the OCM proposals is a plan to replace a points-driven system for distributing licenses to enter the new market with what the agency called a \u201cvetted lottery.\u201d Only applicants who meet the social equity criteria and demonstrate that they have the knowledge and wherewithal to run a business would be entered into the first lottery. Later in the process, other applicants would enter a different lottery for remaining licenses.<\/p>\n

All of these factors would be considered in the \u201cvetted lottery,\u201d interim OCM director Charlene Briner said. The lottery would eliminate potential subjective judgments by staff that could expose the law to litigation. Briner said the current law based on the accumulation of points would likely benefit the \u201cwell capitalized and politically savvy\u201d and expose the state to lawsuits that could delay the roll out of retail sales next spring.<\/p>\n

But what Briner sees as a way of enhancing opportunities for people and communities\u2014defined in the law as social equity applicants\u2014was viewed as hostile to those same applicants during testimony last week.<\/p>\n

\u201cThe proposed lottery system is a cause for alarm from our members who have worked the last 10 months to prepare for a merit-based scoring system,\u201d said John Bartee, president of Cannabis Retailers and Manufacturers Association of Minnesota. Big companies, he said, might be able to put in more applications, or what he called \u201cmore tickets to play,\u201d to increase their odds of winning.<\/p>\n

Many testifiers said it harmed social equity applicants by introducing chance into license awards and might give big companies the opportunity to \u201cflood the zone\u201d with dozens of applicants to increase their odds.<\/p>\n

Others worried that changing the ownership ratios\u2014something OCM saw as a way to help underfunded social equity applicants get investors\u2014would expose those same applicants to financial predators. Current law says social equity applicants must provide 100 percent of the investment needed. The OCM proposal drops that to 65 percent as a way of helping those applicants find capital when traditional bank borrowing isn\u2019t an option for cannabis.<\/p>\n

Calandra Revering, founder of Minnesota Association of Black Cannabis Professionals, said the lottery and change in ownership percentages \u201chas created a path for multi-state operators to come in and expand their footprint in Minnesota.\u201d She said other states have seen big businesses partner with social equity applicants to win licenses, only to move them out of the business.<\/p>\n

\u201cAs one of my colleagues who has opened cannabis operations in other states told me, this is called Rent a Minority\u201d and it is on its way to Minnesota thanks to OCM\u2019s proposal, she said.<\/p>\n