House Majority Leader Ryan Winkler’s 222-page bill to end cannabis prohibition — HF 4632 — would legalize marijuana for adults 21 and older and replace Minnesota’s unregulated illicit market with a taxed and regulated system. It reflects input from a wide array of stakeholders, including from a statewide listening tour. HF 4632 includes protections for public health and public safety along with a strong focus on social equity. It would provide for expungement of prior cannabis convictions and community development grants and foster participation in the cannabis industry by individuals from impacted communities.
While the Minnesota Legislature has adjourned its 2020 session, HF 4632 may form the basis for legislation that can be considered when lawmakers return in 2021.
Here are some of HF 4632’s key details:
Adult-Use Possession and Home Cultivation. Adults 21 and older could possess, give away, and securely cultivate the following amounts of cannabis:
Prohibitions. The following would continue to be prohibited:
Civil nuisance. Allows individuals to obtain relief in court for cannabis-related nuisances — injunctive relief and either a $100 civil penalty or actual damages
Expungement and resentencing. Provides for the automatic expungement of records for possession of modest amounts of cannabis; expunged records would not appear in background checks; also creates a Cannabis Expungement Board to consider petitions for resentencing or expungement for offenses that would no longer be criminal or that were downgraded to non-felony lower offenses
Parole and probation. Individuals on probation or supervised release can be prohibited from using cannabis if abstinence is considered consistent with a recommended level of care, as determined after a chemical use assessment.
Employment protections. Revises an existing law that provides employees cannot be fired for using legal consumable products outside of work to include cannabis; specifies that employers can continue to take action against individuals who consume cannabis or are impaired by cannabis during work hours
Non-Discrimination in State Benefits. Exempts cannabis convictions from restrictions or bars on receiving food stamps and family welfare assistance
Regulatory control. Creates a seven-member appointed Cannabis Management Board to license and regulate cannabis businesses
License types. The board will issue the following types of licenses: Retail, manufacturer, transporter, wholesaler, testing facility, microbusiness, event organizer, delivery service, medical cannabis business, and craft or bulk cultivator. Licenses will be tiered, and licensees may petition the board to adjust the tier.
Business regulations. Cannabis businesses must comply with security requirements, health and safety rules, advertising restrictions, equity reporting, and other rules issued by the board.
Retailers. Retailers may sell usable cannabis, along with immature cannabis plants and seedlings, and other products approved by the board to adults.
Cultivation. Craft cultivators are limited to 10,000 feet of canopy, while bulk cultivators are limited to 30,000 feet. Both indoor and outdoor cultivation is allowed as long as it complies with lighting, security, and other rules.
Manufacturers. Cannabis manufacturers need an endorsement from the board to produce edibles and, separately, to extract THC from cannabis.
Microbusinesses. Microbusinesses may cultivate up to 2,000 square feet of canopy, perform extractions, manufacture edible products, purchase cannabis from manufacturers, and sell cannabis at retail or for on-site consumption. They may offer live or recorded entertainment, consistent with local rules.
Delivery companies and transporters. The following requirements apply both to transporters — which transport cannabis between licensees — and delivery companies — which deliver cannabis to consumers.
Transporters. Only licensed transporters may transport cannabis between licensees, including to cannabis events.
Labs. Testing labs must be accredited and must follow protocols, including related to sampling, testing validity, and batch size.
Events. Licensed cannabis events must have local approval and any required permits. They can last up to four days and may allow on-site consumption. Licensed retailers and microbusinesses may sell cannabis at the events.
Legacy medical cannabis businesses. There is a category of licenses for legacy medical cannabis businesses. They may also obtain licenses as an adult-use cultivator, manufacturer, and retailer.
Limits on multiple licenses. Each type of business is limited in the number and type of other cannabis licenses they can hold. The limitations include:
Licensing process. The board will determine the number of licenses of each type that it will issue and must consider the goals of meeting demand and limiting the supply of illicit cannabis. Applicants will be scored on factors including if they are social equity applicants or veterans, along with their plans for security and record keeping, employee training, labor and employment practices, environmental practices, diversity (with goals for ownership, management, employment, and contracting), and their financial situation and business plan. Added points would be awarded for serving an underrepresented market, including medical cannabis.
1) the conviction was for cannabis possession or sales, or
2) at least five years have elapsed since the person completed their sentence.
Local control. Localities cannot prohibit cannabis businesses or their operations, but they may adopt reasonable restrictions on the time, place, and manner of the operation of a cannabis business. Localities must certify within 30 days if local applicants comply with local zoning ordinances and fire and building codes.
Fees. The only fees that can be charged are application fees of no more than $250.
Tax rate. A 10% gross receipts tax is levied on retail and on-site sales. It appears the state’s standard 6.875% sales tax also applies.
Revenue allocation. HF 4632 lists several areas that revenue will be allocated to, but does not specify what percent or amount of revenue will go to each. It would fund several types of competitive grants programs for industry training, technical assistance, and start-up funding, along with funding for communities with high rates of poverty. HF 4632 would also direct some funding to cannabis misuse education and police training on cannabis laws and impaired driving.
Cannabis Use and Substance Education. Requires government agencies to create and implement several education programs about the risks of cannabis use for: middle and high school students, pregnant and breastfeeding individuals, and parents of young children (in conjunction with home visit programs).
Data collection. The commissioner of health will collect data and produce reports on the prevalence of adult-use and underage cannabis use. The assessment will include baseline and biennial data post-legalization, including by type of cannabis products consumed, with breakdowns by age. The reports may include recommendations to promote public health, including to discourage underage use.
Medical cannabis. Management of the medical cannabis program is moved from the department of health to the Cannabis Management Board. HF 4632 also reiterates the existing medical cannabis law, with some modest improvements and some provisions on how it relates to adult-use.
Rescheduling. Transfers marijuana and tetrahydrocannabinols from Schedule I to Schedule III.
Appropriations. Provides funding to carry out the duties listed in the bill: In Fiscal Year 2021, it appropriates $15 million to the Cannabis Management Board, $75,000 to the Department of Agriculture, $500,000 to the Department of Public Safety, $75,000 to the Department of Health, $150,000 to the Department of Human Services, $500,000 to the Supreme Court, $125,000 to the Department of Commerce, and $125,000 to the Department of Natural Resources.
Minnesota Adult-Use Cannabis Bill Summary PDF