Minnesota marijuana sales could be delayed or in short supply if planting doesn't start soon

Minnesota's legal marijuana market could be headed toward a chaotic launch next year if legislators or regulators don't figure out how to license growers ahead of dispensaries.

Otherwise, there won't be enough product to go around by the time retailers open their doors.

"Cultivation needs to be staged at least 10-12 months before you try and get products out," said Bryant Jones, a member of Minnesota's Cannabis Advisory Council who used to be a licensed grower in Massachusetts. "The plant has to be cultivated, processed, tested, packaged, etcetera."

The state currently plans to issue licenses to all types of cannabis businesses — including growers, manufacturers and retailers — early next year. If growing doesn't start until then, Minnesota might not have a well-supplied market until 2026.

Of the nearly two dozen states that have legalized adult-use cannabis, many have learned the hard way that early demand for legal pot is far greater than supply. That imbalance pushes prices well above black-market levels, which slows legal-market interest among consumers and disrupts the growth of the licensed market meant to serve them.

Charlene Briner, interim director of Minnesota's Office of Cannabis Management (OCM), addressed the issue during a cannabis conference and expo in Mankato on Wednesday.

"We are acutely aware of the need to cultivate prior to opening for retail sales," Briner said. "We also know that we have a very real problem — we have no authority to actually allow people to touch plants until the rules are in place, unless the Legislature gives us some sort of specific authority or we can identify another mechanism to do that."

The office must set rules for the industry before it can issue business licenses, and Briner expects that process to wrap up early next year.

She noted that other states have leveraged their existing medical cannabis programs to partly supply the market ahead of retail sales, but Minnesota does not currently allow that.

"OCM continues to evaluate all mechanisms to allow for early cultivation and will continue working with legislators and advocates to ensure a successful launch," Briner said in a statement to the Star Tribune on Thursday.

State Rep. Zack Stephenson, who carried the recreational marijuana bill through the House last year, said he believes the law gives the OCM sufficient discretion and rulemaking authority. He thinks the office can issue cultivation licenses earlier and doesn't need additional legislation to do so.

"I want OCM to get rules and licenses as quickly as possible, so that we can start growing as quickly as possible. So that we can have a fully functioning, legitimate market as quickly as possible," said Stephenson, DFL-Coon Rapids. "This is something that's left to the discretion of OCM."

Minnesota's marijuana law clearly states the office cannot issue licenses to cannabis businesses, including cultivators, until it has set rules for the industry, and that process takes time.

Jason Tarasek, a cannabis attorney with Vicente LLP, suggested expanding the state's existing medical marijuana cultivation rules to recreational growers to speed up the process.

"Why can't you have cultivators operating now under medical cannabis rules?" he said.

Filling the void

If cultivation doesn't start ahead of retail sales, Stephenson said an early supply shortage is "certainly conceivable."

Importing products from other states isn't an option because it's federally illegal to move marijuana across state lines. Minnesota must establish its own supply chain like every other state that legalized marijuana before it.

Under existing rules, Minnesota's two medical marijuana providers could apply for "combination" licenses next year that allow them to serve medical and recreational customers.

Tribal nations in Minnesota could help meet some consumer demand. They have sovereignty over their marijuana markets and laws, and some have already opened dispensaries and cultivation facilities on tribal lands.

Mille Lacs Corporate Ventures is building a 50,000-square-foot cultivation facility that should open later this year, which may be the first of many cannabis greenhouses on Mille Lacs land. The White Earth and Red Lake nations could also supply retailers around the state if they choose to.

By the end of the year, tribal and medical marijuana operations in Minnesota could exceed 200,000 square feet of canopy, the industry term for space dedicated to growing plants.

But the OCM estimates Minnesota will need 1 million to 2 million square feet worth of cannabis cultivation to meet market demand in the long run.

"Everyone is concerned about this plants-in-the-ground issue," said Angela Dawson, a licensed hemp grower and the co-founder and president of 40 Acre Cooperative, a cannabis collective. "We have a cultivation infrastructure between hemp and the medical cannabis program. We need to use what we have."

For the rest of the state's cannabis cultivators eager to start legally growing, it's hurry-up-and-wait.

"The illicit market is going crazy right now," Dawson said. "We need to free up the system a bit so we're not starting from scratch in March 2025," when licenses likely will become available.

Opening a stable market is important for the long-term health of the industry. Early high prices might draw an abundance of growers and retailers. But as more competition comes online, prices will crash and many businesses will fail, as happened in Oregon, Michigan and elsewhere.

While Minnesotans have been promised more places to shop for blunts and dabs sometime in 2025, advocates worry the state's launch could take much longer.

"That just doesn't look possible by the way things are going," Dawson said. "They are listening, but I haven't seen it in the output yet."

Staff writer Matt DeLong contributed to this report.