Under pressure from advocates, Minnesota legislators debate proposal to allow early marijuana growing

Minnesota legislators and regulators are facing increasing pressure to license marijuana growers ahead of dispensaries to ensure the market will have enough supply when it launches next year.

Under current law, the state's Office of Cannabis Management (OCM) cannot issue cultivation licenses until it has set rules for the recreational industry. That rulemaking process is expected to wrap up in early 2025.

State senators pushed forward a proposal Tuesday to allow certain Minnesotans to grow marijuana this year under the state's existing medical cannabis cultivation rules. Only social equity applicants who've been preapproved for a cannabis business license and obtained local zoning approval would be allowed to start growing early. Social equity applicants are defined as people harmed directly or indirectly by previous criminal enforcement of marijuana laws.

"If we can implement those cultivation rules, cultivation licenses could begin to be operational very, very quickly," said Sen. Lindsey Port, DFL-Burnsville.

Port's proposal would give the OCM the option of using the medical rules, but it wouldn't require it. Interim OCM director Charlene Briner said the office will use the rules "if that option is deemed necessary to stage the market."

"OCM will continue to evaluate how or if we can use that tool while still preserving our commitment to equity and our obligation to stand up the market effectively," Briner said, adding that the office is committed to ensuring a timely market launch.

Advocates in Minnesota's cannabis community have been warning for weeks that the state's retail marijuana market could face a chaotic or delayed rollout if growing doesn't start soon. Minnesota must establish its own marijuana supply chain because it's federally illegal to import products from other states.

Among the nearly two dozen states that have legalized recreational marijuana, many have learned the hard way that early demand is far greater than supply. That imbalance can push prices above black-market levels, slowing interest in the legal market.

"If we do not create a pathway for well-prepared cultivators to begin their build-outs right now, Minnesota will not have a cannabis supply chain until mid- to late 2026 at the earliest," prospective grower Ali Britton told legislators Tuesday. "This would mean that the anticipated windfall of tax revenue from the cannabis market will not be available until at least 2027."

Britton was among about three dozen advocates who showed up at the Capitol on Tuesday to stress the importance of staging cultivation ahead of retail sales. Many testified during a Senate committee hearing and spoke at a separate morning news conference.

Leili Fatehi, a lobbyist who worked with lawmakers on last year's marijuana legalization bill, said the state's cannabis industry is facing a "pivotal moment." She said Port's proposal is a good start but it's "very narrowly defined to just social equity applicants."

Fatehi suggested that any well-prepared business should be eligible to start growing this year. And she said the bill should also include a specific timeline for when cultivation can start.

"The limiting of that to just folks that are going to be screened as social equity likely is going to result in delay and an insufficient amount of supply coming online," Fatehi said.

The Senate Commerce and Consumer Protection Committee added Port's proposal to a broader cannabis policy bill on Tuesday and moved it forward for a floor vote. The Minnesota House already passed a companion policy bill, but it did not include Port's language allowing early cultivation. Pending Senate passage, a conference committee will meet to reconcile the two bills' differences.

Sen. Zach Duckworth, R-Lakeville, said there's still time for Port and regulators to tweak the bill to satisfy stakeholders.

"It sounds like there's maybe still a little bit of room for some give and take between what you're all doing, what cultivators are looking for," Duckworth said. "This is a critical piece that needs to get figured out."