Innovating Minnesota Cannabis With Micro & Mezzo Businesses
August 4, 2023
August 4, 2023
By Sumer Thomas
New Cannabis Business License Types Are Here
Minnesota’s adult-use cannabis legalization bill took effect on August 1, 2023, and the state’s new cannabis program has about as many quirks as the state has lakes. The bill’s quick timeline and unique business license types will keep both regulators and entrepreneurs on their toes.
The legislation proposes that retail sales for adult use cannabis in Minnesota begin in the first quarter of 2025, and we’ve heard license application grading will begin in May of 2024. Until then, the Office of Cannabis Management is busy on the regulatory side preparing for the market rollout. Their initial steps are to hire a program Director, form the Cannabis Advisory Board, draft regulations, release an application, and grade and award cannabis business licenses. The regulations should give us more clarity on the application, grading process, and timeline.
In addition to the low-potency license we covered previously, Minnesota’s legalization bill surprisingly introduced “microbusiness” and “mezzobusiness” business license types as well as priority scoring for social equity and veteran businesses.
No Vertical Licenses? No Problem! Minnesota Has Unique License Types for Everyone
Cannabis Microbusiness Licenses
Vertical cannabis operations are prohibited in Minnesota—but not in the case of the small but mighty microbusiness. In addition to growing, processing, and dispensing cannabis products, the microbusiness can even operate an establishment that permits on-site consumption of edible cannabis products and lower-potency hemp edibles. The flowering canopy for a microbusiness is restricted to 5,000 square feet indoor (only a sixth of a full cultivation license’s capacity) and a half an acre outdoor. There is a limit on the manufacturing of products for a cannabis microbusiness, which must be equivalent to the amount of cannabis flower that can be harvested from a facility with a plant canopy of 5,000 square feet in a year. Though a quick calculation can give an approximation, we’ll await clarity in the regulations as to the exact production amount allowed in this case. Microbusinesses will also be able to engage in commerce with other cannabis businesses.
Minnesota microbusiness license applicants will have to prepare and submit an operating plan, the proposed floor plan for the facility, a diagram of ventilation and filtration systems, plans for wastewater and waste disposal, plans for utilities, plans for compliance with applicable codes and safety requirements, and plans to avoid sales to unlicensed cannabis businesses and individuals under 21 years of age, among many other requirements.
Cannabis Mezzobusiness Licenses
Again, running counter to the trend of separating cannabis retail and production activities, the fancily named mezzobusiness is another type of vertically integrated cannabis business license in Minnesota. In addition to increased production, the main difference between this and microbusiness is that the mezzobusiness can run up to three retail (dispensary) locations, but it is not explicitly permitted to allow consumption on the premises. The mezzobusiness flowering canopy must be limited to 15,000 square feet indoors—three times the limit for the microbusiness—and production must be restricted to what can be grown under the allowed canopy size.
Minnesota mezzobusiness license applications will include: an operating plan covering all endorsements, the proposed floor plan for the facility, a diagram of ventilation and filtration systems, plans for wastewater and waste disposal, plans for utilities, plans for compliance with applicable codes and safety requirements, and plans to avoid sales to unlicensed cannabis businesses and individuals under 21, in addition to various administrative and operation-specific requirements.
License Priority: What This Really Means for Social Equity Businesses
Any license type can also be a social equity and or veteran business and qualify for “priority” on the application so long as they meet the criteria. “Priority” equates to additional points on the application evaluation. On a competitive application, all the points matter, and perfect scores aren’t uncommon. As we saw with the Illinois cannabis program, priority status can mean the difference between winning and not. Alternatively, applicants who submit an individual impact plan may receive social equity points so long as they show impacts from cannabis prohibition that are “substantially similar” to social equity requirements—though it opens social equity points to additional applicants, this fairly nebulous description is bound to lead to later appeals and litigation.
Win Your Minnesota Cannabis License with Canna Advisors
For anyone considering applying for an adult-use microbusiness or mezzobusiness license in Minnesota, or determining priority status, we recommend hiring an experienced licensing consultant. If you hope to competitively participate in a license application, it is essential to have a basic grasp of the overall licensing framework and the licensing process. With cannabis application experience in 38 U.S. States, the Canna Advisors team can help situate you for Minnesota’s quirky new cannabis business licensing scheme.