Less than 2 weeks before the Minnesota license round opens! If you want to operate as a licensed cannabis business in Minnesota, it’s time to plan your license application strategy.

In this issue:

• Lots of licensing resources for the quickly-approaching Feb. 18-Feb. 14 round, whether you need to apply, fix a denied app, or already got approved and want to know what is next;

• Takeaways for hemp-derived businesses from OCM’s webinar 1-27;

• Business-building resources for those just starting a cannabis business in Minnesota; and

• Great upcoming industry events!

   

MN-OCM Updates

Licensing Update

Minnesota’s Office of Cannabis Management ("OCM”) is moving forward on the same timeline they announced previously: the next licensing round will open on Feb. 18 and close on March 14. It’s a tight timeline, especially because the application materials and FAQs are not yet available; we expect them around Feb. 14.

For those who have not yet applied:

National license writer Layle McFatridge and I did a webinar last week about what we expect in this round and what we don’t yet know! It’s available for replay at this link, as are the application forms OCM put out for the previous Summer 2024 application round, which give us some some sense of what to expect for application forms this round.

Layle will be visiting Minnesota next week! She plans to join me at the Earl Giles industry happy hour on Wednesday, Feb. 12 (5-9 PM) to meet people, and we are also setting up meetings with clients who have retained us to do their license application for them or are considering doing so. Reach out to me at [email protected] to set up an in-person meeting with me and Layle.

Interested in outsourcing your application prep? We’re filling our slots, but we have some left! Spend your time building your business instead of writing your application, and get the benefit of a pro license writer who loves getting the paperwork exactly right. Full-service costs $18,500 and up. Book a consult here or email me.

Once the form of application finally comes out (expected Feb. 14), Layle and I are planning to dig in, understand what it requires, and turn our takeaways into a second webinar for DIY writers on Wednesday, Feb. 19. We’re charging $50 per person for that expert breakdown. Sign up here now for a seat and to get the recording, as well.

For those who got rejections from OCM in the fall:

I expect OCM to be sending out letters to the Summer 2024 round applicants who received the “Fail” notices any time now, with instructions on how to fix their applications. Be watching your email, as I expect you’ll have 10 days or some such.

If you’d like my personalized assistance with reviewing that email and determining your next steps, you can grab a short, paid meeting with me here to do so: https://calendly.com/jdnavigator/paid-meeting

I’m also thinking about a group approach to these that is paid, but cheaper. Maybe a paid evening event? No date yet. If you’d be interested in that, or partnering on that, let me know.

For those who were already approved but got pushed to the next round:

Nothing more to do on licensing at the moment (but watch your email from communications from OCM)!

If you are in an uncapped category (micro, especially), you should be building your business now to capture the value of being quick to market. The next step is likely a notice from OCM saying you can open once you have a letter from your city saying your space is in compliance with zoning rules and building codes. I expect those letters to start coming in late March.

What will you wish you had done now to take advantage of this time?

Low-Potency Hemp Update

OCM held a webinar on January 27 to explain the regulatory process they plan to follow in 2025 for those selling hemp-derived THC beverages and edibles. Link to OCM’s info

Jen’s takeaways:

• Most Urgent: If you plan to stay in hemp-derived, make sure you are registered with OCM to sell hemp-derived THC beverages and edibles. Some manufacturers who do not sell direct to consumer may have chosen not to register previously, as it was explained in the past as being required for B2C companies, not manufacturers. But this presentation made clear that being “in good standing” and on that registration list will be necessary to move easily into the licensing process for hemp-derived retailers and manufacturers. OCM says the registration portal will close to new registrants by the end of March.

• Plan Ahead:

  • If you plan to stay in hemp-derived:

    • Plan to apply for the Lower-Potency Hemp Edible Licenses (Retail and Manufacturing) once OCM announces them (this summer?). Conversion from registration to licensing is NOT automatic.

    • Plan to comply with the different requirements of Chapter 342.45 rather than 151.72, which includes packaging, labeling, and other changes. The effective date of this change is not crystal-clear to me, but I believe it will be tied to the low-potency licensing process.

    • Plan for supply chain issues: as proposed by OCM, low-potency edible retailers may obtain and sell products from Minnesota-based low-potency edible manufacturers. But to sell out of state products, they would have to purchase those products from someone with a cannabis wholesaler license.

    • Furthermore, OCM said, you cannot wholesale lower-potency hemp edibles with a lower-potency hemp manufacturer license. You would need to obtain a cannabis wholesaler license to do that. Some industry folks are attempting to push OCM on this stand, but we will see what happens.

• If you plan to move to the adult-use cannabis industry:

  • Apply for an adult-use cannabis business license in the upcoming Feb. 18-March 14 window. OCM confirmed that registered hemp-derived businesses are able to apply.

  • Licensed microbusinesses, mezzobusinesses, and some other types ARE allowed to sell lower-potency hemp edibles alongside adult-use products.

  • Watch for more advice about how to navigate this transition!

Preparing for your Cannabis Business License Application

If you plan to write your own application, here’s some information to gather now, before we have the form of application available:

• Full names of each owner, along with date of birth and Social Security Number

• Gather together organizational documents (For an LLC, you should have Articles of Organization, filed with the Minnesota Secretary of State, and an Operating Agreement signed by all owners (unless you have only one owner))

• Document knowledge and experience of each owner in any of the following categories:

  • Owning/Operating a Business

  • Working in the Cannabis/Hemp Industry

  • Operating a Highly-Regulated Business

  • Working with Consumer Goods, Agricultural Products, or Controlled Substances

  • Other Relevant Work, Educational, or Volunteer Experience

• If seeking Micro/Mezzo, which endorsements are you going to seek? Begin to plan for:

  • Cultivation: How large will your facility be?

  • Extraction and Concentration: What types of extractions do you plan to do?

  • Production of Customer Products: What types of products do you plan to create?

  • Retail Operations: Roughly where do you plan to locate your retail location?

• Be prepared to answer the following questions: What is the expected size of your business? What is the anticipated growth of your business? What is the general location of your business?

Starting a business involves many critical decisions, and one of the most important is selecting the right legal structure. Your choice can impact everything from your personal liability to how you pay taxes. Let's break down the key considerations to help you make an informed decision.

Read the rest of this new article HERE if you have not formed your business entity!

Not sure which license type you should apply for? Grab a paid meeting with Jen to learn your options and create a game plan.

Upcoming Industry Events

Want to sponsor or be included in this list in the next newsletter? Email me info!

Every Wednesday from 5-9 PM, join Industry Night at Earl Giles Restaurant & Distillery (1325 Quincy St NE, Minneapolis) - we take over the second floor mezzanine indoors and the fire pit outdoors!

Thursday, February 20: High Pines Canna Club at Jack Pine Brewery in Baxter, MN | Presented by Canna Connect MN. Free. Reserve a spot HERE

Free Webinar: Best Practices: Access to Capital and Basic Banking for MN-Based Cannabis Operators. From Green Check

Thursday, March 6 at noon Central. Free

As an entrepreneur in the cannabis sector, it’s essential to know how to navigate your banking and business services options. This webinar will dispel myths about access to banking, capital, and other imperative operational considerations.

Our Experts Will Cover:

• How Financial Service providers define Cannabis-Related Businesses and why being a Cannabis-Related Business will create some challenges

• What kind of documents are needed to open a bank account

• How to find a cannabis-friendly financial institution

• What kind of products and services you can expect from a bank or credit union

• Overview: Types of funding available to cannabis business and the process for each

• Other business service considerations and where to find them (Payroll, Payments, ATMs, Insurance, etc.)

Who Should Attend:

• Licensed cannabis operators: all types

• Pre-license cannabis entrepreneurs

• Ancillary businesses serving the cannabis industry

• CFOs, accountants, and finance teams running a cannabis business