EXCLUSIVE: Can Minnesota Keep Its Cannabis Industry Local Amid Out-Of-State Pressure? Legal Expert Weighs In
As Minnesota prepares to roll out its cannabis licensing in 2025, the influx of out-of-state applicants to the social equity business licenses has raised a few eyebrows and sparked debate over who will participate in and profit from the state’s burgeoning legal weed industry.
Mitchel Chargo, an attorney with deep roots in Minnesota’s cannabis landscape and a partner at Hinshaw & Culbertson LLP, explains the backdrop of the tension. “From the outset, I understood the Minnesota legislature’s goal was to create a Minnesota-centric craft cannabis industry,” he said. However, with no residency requirement for applicants, Chargo notes that “approximately half of the license pre-approval applications came from out-of-state social equity applicants,” potentially diluting the local focus.
This policy stems from legal precedents in other states. Attempts to exclude out-of-state parties from cannabis markets have been deemed unconstitutional, according to Carol Moss, an industry attorney and member of the state’s Cannabis Advisory Council consulted by The Minnesota Star Tribune. As a result, Minnesota’s legislation deliberately avoids such restrictions, allowing a significant influx of non-resident applicants.
Intense Competition For Social Equity Cannabis Licenses
The Office of Cannabis Management (OCM) received over 1,800 pre-applications this summer, but only 44% reportly had Minnesota residency. “The influx of non-residents increases the number of lottery participants, thereby reducing the odds of Minnesota residents winning a pre-approval in the initial lottery,” Chargo told …