What good is a one-month extension? A lot, it turns out

MN CANNABIS UPDATES

Minnesota's press are finally covering the awful, looming impact of the November 12 hemp ban on Minnesota businesses, with recent articles in Sahan Journal and Axios Twin Cities. I even got interviewed about it at the State Fair this morning on WCCO radio, live!

Twin Cities Business did a nice piece about the budding cannabis industry and the looming hemp ban, profiling North Star Accelerator member The Grey Area and interviewing me about the lack of investment dollars available to operators.

Minnesotan and industry leader Kasey Kollross wrote about the success of Minnesota's model of funding job training for cannabis workers in GreenState, including by the Minnesota Cannabis College.

OCM Cultivator Licensing - a Big Summer Catch-Up

OCM shared some great data and we wanted to share it with you! From OCM:

• Newly licensed cultivators: 18 in June, 29 in July, and 46 so far in August (previous high was 8 in March)

  • This includes all license types that are licensed/endorsed to cultivate, including microbusiness, mezzobusinesses, and cultivators

• There are now 152 licensed cultivators!

• Nearly 75% of license holders endorsed for cultivation activities are microbusinesses— and 40% of those businesses hold social equity licenses—evidence suggesting that it is small and craft businesses who form the foundation of cannabis cultivation in Minnesota.

• Over 85% of licenses issued in the four capped license types, including cultivators, have been to social equity applicants – data suggesting that a dual-lottery approach may have helped establish a pathway for social equity operators to enter first in Minnesota's emerging cannabis market.

Carol’s take: Now we’re cookin’! As someone who has experienced bumps in getting clients over the finish line, I’m seeing much more alignment between applicants and the OCM, with everyone working together to identify and resolve issues. In my observation, everyone has a much better understanding of what it takes to get licensed, and inspectors are becoming increasingly knowledgeable about the industry and the unique needs of these businesses. It feels like the process is finally starting to click.

Minnesota Compliance Updates

Advertising
MN-OCM updated its published guidance on advertising matters on Aug. 7. All licensees should review it; it addresses:

• Ad warning language and when to use it

• Outdoor signage (including explicit prohibitions on sandwich boards and neon window signs, which OCM is saying it sees as exceeding the 2-sign limit in state law)

Testing
MN-OCM also published Version 2.0 of its Cannabis Technical Authority (CTA), which details compliance testing requirements for cannabis and hemp products manufactured or sold by businesses licensed by the state of Minnesota. Per OCM, "Note that none of the test analytes or test limits are changed. This update does not affect what testing is required for products, or how testing is requested or reported through Metrc."

 Jen's take: There had been an effort over the last year asking OCM to reduce the required sample size sent for testing, arguing that it was more regulated product than needed, especially for concentrates. This statement is saying clearly that OCM is rejecting those arguments, at least for now. The testing sample sizes stay the same.

Download the updated guidance in Version 2.0 via OCM’s Standards for Sampling and Testing Cannabis and Hemp Products webpage.

Product Storage Rooms
MN-OCM's recent compliance bulletin points out an issue I've heard from dispensaries getting licensed: OCM interprets its Rules to require that you have a back room for regulated product storage that is not used for any other activities or storage.

For example, some dispensaries had proposed having locked cabinets for regulated product storage in a larger room that also included tables and a handwashing station for trimming or repackaging activities. No, said OCM. Ultimately, this is a design issue. It's come up enough times that OCM is trying to communicate with everyone what inspectors will require.

Expiration and Best-Buy Dates
MN-OCM released new Guidance Memo GM-2026-04 on August 17,
“Explanation of expiration and best-by dates for cannabis and hemp products."

Advertisement

Advertisement

FEDERAL CANNABIS NEWS

Hemp Ban Update

Earlier this month, the U.S. Senate passed a measure to delay the federal hemp ban from November 12 to December 11 (while allowing the ban on synthetic cannabinoids to go into effect on November 12). MN Senator Amy Klobuchar led the effort.

That bill now heads to the U.S. House for consideration and passage, tucked into the huge Continuing Resolution (CR) bill. The U.S. House reconvenes Aug. 31.

The Hemp Beverage Alliance reports it is optimistic that the House will pass the Senate CR that includes the prohibition delay.

Green State explained that:
“ The legislation still must pass the House before it can reach the president’s desk. If the hemp language survives negotiations, the industry would gain another month to pursue a longer-term legislative solution.”

In other words, even the one-month delay is not a done deal. But advocates are hopeful that it will pass, and then, that would create a window to place a longer-term fix into the December funding bill.  

And indeed, a lot of American policy has gotten done behind the scenes in those December appropriations bill, notes Delta Emerald, including last year’s hemp ban, the 2018 Farm Bill, and other important changes in cannabis policy. Also encouraging: Total Wine using its massive consumer list to contact Congress before the Senate vote.

So, assuming the House does pass a CR with the extension to the hemp ban, here’s what happens next, says Delta Emerald:

Jen’s take: To sum this up: First, we’ll be watching whether the U.S. House passes a Continuing Resolution and whether it includes the delay to Dec. 12. That would happen sometime this fall, and remember, it could happen either before or after Nov. 12. (Yes, before would be much better for the industry.)

However, the movement by the U.S. Senate (and the political pressure on behalf of hemp that created it) are good news. I’m feeling cautiously optimistic that the Hemp Beverage Alliance and the many other hemp THC allies can get a fix through Congress by the deadline. But as always in cannabis, it’s going to be a wild ride.

Rescheduling Update

We are still in waiting mode after the DEA hearings this summer. Next step will be the release of the Administrative Law Judge's recommendation whether to reschedule cannabis to Schedule II or III, or not reschedule. Here's my newsletter where I broke down those hearings and the next steps (go to Federal News - Rescheduling Update).

One update: The transcripts of the DEA Hearings have been released. Rachelle Gordon of GreenState summarized on Instagram how stunning it is to see the DEA on the record as stating that cannabis has multiple medical uses and should not be on Schedule I. Jeremy Berke of Cultivated also did an analysis, giving insights on the statements made by the opposition and where the DEA attorneys challenged their testimony on cross-examination.

It's official: More Americans now say they smoke cannabis than cigarettes. A new Gallup poll found:

• 17% of U.S. adults smoke marijuana, 15% consume marijuana edibles

• 11% smoke cigarettes, 9% vape, 4% use nicotine pouches

• 49% drink coffee, 20% drink caffeinated soda daily

The number of Americans who smoke cannabis has increased significantly since 2013: 

YOU ASKED: Can I really sell a license in pre-approval status? What’s the process?

Yes, you can! I’m seeing a ton of demand to buy “paper” licenses right now. If you applied originally but are no longer going to open your own business, you have a brief window of opportunity to sell your license to another operator and cash out.

Here’s the process:

1) Get matched with a buyer and negotiate the contract terms, including sale price. Right now, we’re seeing microlicenses sell for $20,000-$25,000 and the larger licenses for much more, up to $400,000.

2) Sign the purchase agreement. Generally, the buyer receives minority ownership at signing, and sometimes part of the payment is made then too.

3) Your buyer will then work to open the business: secure a location, do the buildout, and submit FPORs to OCM. That’s because, technically, a license cannot be transferred until it is operational. So the buyer will operationalize the license. You as the seller may be asked to sign paperwork for the OCM.

4) Once the license is awarded, you can finally close the deal. Your buyer now holds 100% and you get paid the purchase price.

Notes:

• You’ll need to have a lawyer on your side to negotiate the purchase agreement. National powerhouse firm Vicente has done these deals already, and they estimated $5,000 in fees for a simple deal with not much back and forth. These “transaction costs” are part of doing a deal, and keep them in mind as you decide whether to go down this route.

• It’s important to know how much time is left on your license before it expires. That is: from the date you received your pre-approval email from OCM, you had 18 months to open a business, plus another 6 months extension from the recent legislation. (Finally, you can also get an additional 6-month extension by showing progress to OCM). Any buyer inherits that same clock.

• That’s why this is a time-limited opportunity. It will take buyers time to locate a property, do build-out, and send FPORs to OCM. They want to contract with sellers who have enough time left.

Interested in being introduced to prospective buyers? Email me and I’ll connect you with a broker I’ve gotten to know! (Full disclosure: I would get a referral fee after you close the deal). [email protected] 

UPCOMING EVENTS

MOCHI MOMENT

Follow us on Instagram for all the Mochi antics

Know someone who needs this newsletter? Please forward to them!

Received this from someone else? Subscribe here to stay in the know about the Minnesota cannabis industry and tools for entrepreneurs!