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MN CANNABIS UPDATES

New Online Dashboard Released

MN-OCM has released a new tool with tons of data on the industry! It is available here. Axios TC did an article diving into this data, and we also have special guest commentary from Minnesota entrepreneur (and North Star Accelerator member) Bob Walloch of CannaJoyMN:

So what does the data show? First, a larger and more diversified licensed market than I expected at this stage. Minnesota [at 12/31] has 120 total licensed sites, including:

• 24 cultivators

• 11 manufacturers

• 3 testing laboratories

• 3 transporters

• 69 adult-use retailers

Cultivation capacity in particular stands out as higher than anticipated, suggesting the state moved quickly to stand up supply-side infrastructure alongside retail. There are 118 licensed businesses, meaning only two operators control more than one site, and 55% of all licenses are held by social equity applicants, indicating that equity participation is not just symbolic but meaningfully represented in the market structure. Licensing activity has also been notably steady: from August through December, Minnesota averaged 21.6 new licenses per month, with no sharp spikes or slowdowns, pointing to a consistent regulatory rollout rather than a one-time rush.

Sales data reinforces the picture of a market gaining momentum. Adult-use cannabis generated $31.24 million from September through December, with December alone reaching $9.4 million, and 466,000 total transactions yielding an average ticket of $67, suggesting frequent, moderate-sized purchases rather than a concentration of high-dollar sales. Medical cannabis remains a meaningful channel as well, averaging $7.6 million per month and totaling $91 million last year, with a much higher average transaction size of $120, consistent with more planned or higher-volume purchasing behavior. Product mix shows adult-use consumers heavily favoring flower (52%), followed by concentrates (28%) and shake/trim (15.5%), with edibles and other categories making up the remainder. It remains an open question how much this distribution reflects true consumer preference versus current product availability—flower share, in particular, may shift as broader supply comes online, or it may reflect the profile of early adult-use consumers entering the market in the second half of 2025. Finally, cultivation activity is already substantial, with 65,000 plants planted across medical and adult-use programs in 2025, underscoring that production capacity is ramping in parallel with retail growth rather than lagging behind it.

Read More 

Proposal Recommendation to Streamline the Adult-Use and Medical Cannabis Supply Chains from OCM

As directed by the Minnesota Legislature last year, MN-OCM has worked to listen to stakeholders and design a proposal to unify the medical and adult-use supply chains, which are entirely separate at this point. OCM released their proposal on 1-15 and it is available for review here.

OCM says, "The proposal aims to accomplish:

• Safeguarding the medical cannabis supply and patient protections. •

• Encouraging business participation in the medical cannabis market.

• Improving fairness between cannabis licenses to allow similar activities for similar license types.

• Balancing opportunities for larger and smaller businesses aligned with the law’s framework.

Like other legislative changes, this proposal would need to advance through the legislative process to enact any of its recommendations. The proposal was developed with a long-term lens and envisions changes occurring in 2027, with market buildout continuing until then." (From OCM Report to the Legislature)

Other OCM Reports to the Legislature

Medical Cannabis Patient Priorities: Presents survey data re: MN medical patients), including this interesting graphic about product types preferred by age category:

OCM Annual Report to the Legislature (2026) (Jan. 15, 2026)

Lots of interesting info in this annual report, including statistics on Minnesota's social equity applicants:

Also: analysis of inspection results found that in 2025 the compliance rate of hemp business inspections was greater than 90% (!), compared to 75% compliance documented in 2024.

Jen's take: I take this as further evidence of Minnesota's safe and well-regulated hemp market; that Minnesotans attempt to follow the law if they can; and that education and OCM taking an educate-to-compliance approach has been successful in guiding operators to compliant approaches.

Other OCM Reports also released:

• 2025 Market Analysis Report: Status of the Minnesota Regulated Cannabis Industry

• Legislative Report on CanGrow Grant Program (Fiscal Year 2025) 

• Legislative Report on CanRenew Community Reinvestment Grant Program (Fiscal Year 2025)

FAQs with OCM: Indoor/Outdoor Growing

A North Star Accelerator member recently had a useful email exchange with OCM, that we are sharing with this newsletter's readers. Spring planting season will come, and let's be ready!

Q: Can I start cannabis plants indoors and then transplant to a field outdoors?
A: A business authorized to cultivate outdoors may start seeds or clones indoors. Newly planted seeds or clones must be recorded in Metrc as an immature plant batch. Once the seedlings reach 8 inches in height or width, they must be tagged individually with Metrc tags and moved to the approved outdoor location. The indoor facility used to start seeds must not be part of a dwelling. All other applicable zoning and building codes also apply.

Q: If I grow all flowering plants indoor, can I also have outdoor vegetative canopy?
A: No. Once plants reach 8 inches in height or width, they must be tagged individually with Metrc tags and entered in Metrc. Once a plant is tagged, it cannot be moved from outdoor to indoor or vice versa. An indoor grower must keep all tagged plants indoors. An outdoor grower must keep all tagged plants outdoors.

OCM also said in the email that they planned to make FAQs on this topic public soon.

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LEARN MORE

Other Minnesota Cannabis News

The League of Minnesota Cities published a helpful summary about the low-potency hemp edible license issuance timeline. They say,

"The Office of Cannabis Management (OCM) began licensing lower-potency hemp edible (LPHE) businesses in October 2025. The market for those products has been operating under a temporary transition period that was set to expire on Dec. 31, 2025.

In December, OCM notified registrants with a pending application for either cannabis or LPHE licenses that they may continue selling products under Minnesota Statutes, section 151.72 while their applications are being reviewed and processed. Under the revised timeline, the product transition period is extended through March 31, 2026. LPHE manufacturers an wholesalers will also be licensed on that same date.

Read more about updated licensing timelines outlined in Guidance Memo 3.

Local government role: After receiving a license from OCM, LPHE retailers must also obtain local retail registration from their city. Once OCM issues an LPHE retailer license, it will notify the local government, which may then issue the local retail registration. This is not a retail registration that can be capped."

OTHER CANNABIS NEWS

Federal Hemp Ban Delay Introduced: Congressman Jim Baird (R-IN) introduced the Hemp Planting Predictability Act, which would delay implementation of restrictive hemp provisions for two years by amending the FY2026 Agriculture, Rural Development, Food and Drug Administration, and Related Agency Appropriations Act. A bipartisan group of cosponsors includes Angie Craig (D-MN).

“"The entire hemp industry is united behind passage of HR 7010,” Jonathan Miller, general counsel for the U.S. Hemp Roundtable, told GreenState. “A two-year extension of the hemp moratorium is critical to provide farmers certainty concerning their 2026 crops and to provide an appropriate runway to allow for the passage and implementation of a robust regulatory regime for hemp products.”

A bipartisan group inc. Sen. Amy Klobuchar (D-MN) has introduced a 2-year delay in the Senate.

Jen's take: This would push the federal hemp ban deadline from Nov. 2026 to Nov. 2028 - which would be great news. Now we have to see if it can get through Congress. But, there is buzz this could even get added to the spending bills Congress must pass by late January to avoid another government shutdown!

Cannabis M&A (mergers and acquisitions) is on the rise in mature states, encouraged by Trump's executive order on rescheduling, MJBIzDaily reports.

ESOP Away: The corporate parent of the Illicit cannabis brand just closed on the largest Employee Stock Ownership Plan (ESOP) deal in the U.S. cannabis industry so far, covering its Missouri and New Jersey operations and over 500 employees.

Jen's Take: While they exist in many industries, ESOPs are especially prevalent in cannabis because they restructure a company as employee-owned and avoid federal taxes - including the crushing extra federal taxes imposed by 280E on cannabis companies. An ESOP transaction is also a smart exit option for cannabis operators - they do not have to find a buyer, but instead sell their company to a trust for the benefit of all of the employees.

US cannabis revenue has declined for the first time in the history of regulated cannabis, reported Cultivated. In 2025, the cannabis revenue forecast is expected to hit a maximum of $29.6 billion, a 3.2% decline from 2024. Data from Whitney Economics.

U.S. teen cannabis use continues to drop, even as more states legalize, according to the Monitoring the Future study. "When prohibitionist groups inevitably bring up the fact that reclassifying cannabis to Schedule III will endorse cannabis use for teens — you can point them to this data," says Cultivated.

Ohio: Recreational cannabis sales surpassed $836 million in 2025, which was the first full year of the state’s newly launched adult‑use cannabis market.

Texas: Despite state and federal efforts to limit hemp-derived THC, Circle K launched a partnership with THC beverage brand Varin to offer a line of THC beverages in Texas shops.

Guest Blog: Minnesota Right-to-Know Requirements: Personal Protective Equipment (PPE) Requirements

By Cathy Hovde of Resilient EHS

Ensuring worker safety in cannabis cultivation, processing, and retail settings goes beyond best intentions—it demands strict adherence to OSHA’s PPE standards and an informed awareness of the specific hazards present in these environments. In this newsletter edition, we outline the essential responsibilities for employers: what must be provided, documented, and taught to maintain compliance and protect employees.

Cathy provides a practical starting point for compliance.

READ HERE →

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