While Minnesota's cannabis industry wades through regulations, Wisconsin's accelerates without many

When it comes to cannabis, Wisconsin operates in the same gray area Minnesota once did.

Wisconsin has not legalized recreational pot, as Minnesota did in August 2023, but many of its stores openly sell cannabis products Minnesota regulations don't allow yet.

Wisconsin sellers argue their potent THC vapes and cannabis flower meet the federal definition of hemp established in the 2018 farm bill: any part of the cannabis plant with a delta-9 THC concentration of no more than 0.3% by dry weight. That definition, though, doesn't specifically address other versions of THC, including THCA, the raw precursor to delta-9 that only produces a high when heated — like when smoked or vaped.

As a safety measure, Minnesota deployed hemp guardrails in 2022. In fact, all Midwestern states except Wisconsin have some regulation around hemp-derived THC.

In Minnesota, retailers can only sell hemp products to those 21 and older. Plus, there can be only 5 milligrams of THC per serving (about half the standard dose) and 50 milligrams per package. In Wisconsin, there are no limits on dosage, no testing requirements, and in most cases, no age requirements.

So while Minnesota's existing regulations and slow rulemaking process mean full-scale pot dispensaries won't open until next year, Minnesotans can purchase products like highly potent THCA-containing flowers and vapes from online retailers and in Wisconsin, where billboards along highways advertise such dispensaries.

"I don't know that they are legal," said Jason Tarasek, a cannabis lawyer at Vicente. "The state of affairs in Wisconsin reminds me a lot of where we were at in Minnesota 2020, 2021, where there weren't a lot of answers, and regulators and lawmakers didn't know what to do."

A moving target

Highnorth Dispensary co-founders Tyler Thompson and Dan Johnson have adjusted to the various hemp regulations since they opened their first store in Cottage Grove in 2022.

That summer, the owners had to pull many of their products from shelves to comply with Minnesota's low-dose edible regulations. And when they opened an Uptown Minneapolis location in 2023, regulators eventually nixed their THCA flower and vapes for similar reasons.

State regulators have destroyed more than 190 pounds of cannabis flower taken from retail stores, about $578,000 worth, according to Minnesota's Office of Cannabis Management (OCM).

Those run-ins led Thompson and Johnson to open their 200-square-foot location in Hudson, Wis. Because of the lack of rules there, they can sell many of the same products they used to offer in Minnesota, including cannabis flower, high-dose edibles, THC vapes and pre-rolls. According to Johnson, the Wisconsin location outperforms its other two stores with about 30% more revenue since it opened in April 2024.

"It was a way for us to service this customer base that we had earned their trust for a long time," Thompson said, "and give them a place they can still come get product that's safe, that's tested, that they can be comfortable buying and that they're familiar with."

If hemp-derived THC products were a pre-legalization loophole in Minnesota, THCA is an exercise in interpretation in Wisconsin. Technically, labs should test THCA for that 0.3% threshold only after it has converted to delta-9 from heating. But that's not completely clear in the farm bill, meaning people can purchase THCA products in Wisconsin, for example, that are way stronger than the 0.3% threshold after heating.

"I suppose it's a gray-area industry, and I guess it has been since the farm bill passed," Thompson said. "But all we're going to do is make sure that we're providing the best quality products that we can within the market that's being serviced."

Setting up shop in Wisconsin didn't eliminate all of Highnorth's regulatory troubles, though. The Drug Enforcement Agency has pulled products from shelves at Highnorth's Hudson location, according to a spokesman with the Hudson Police Department. The store said it temporarily stopped selling THC vapes because law enforcement said the dispensary needed a tobacco license, which it eventually procured.

With this type of business, industry standards do not always line up with the letter of the law, Thompson said, adding he appreciated law enforcement's guidance.

"If you're trying to be competitive in a marketplace, you also have to be able to provide the products that your neighbor is providing, too," Thompson said, "but do it in the most responsible way you can. And if things change, adjust to that and try to be better."

Rules, please

Some Wisconsin cannabis purveyors are calling for more regulation.

Wood County passed an ordinance restricting the sale of THC products to those age 21 and older and in locations at least 750 feet away from youth-serving organizations, regulations that don't exist at the state level.

Jacob Wagner, a county public health strategist, said community discussions revealed local cannabis businesses weren't keeping THC products behind the counter and also used packaging that could appeal to children, especially sans a minimum purchasing age.

Wagner said the goal is to treat cannabis the same way as alcohol and tobacco. Many businesses are open to that kind of regulation.

While lobbying for the Minnesota Hemp Association, Tarasek met with legislators and asked them to "please regulate" the industry. His clients wanted to abide by the law and provide a safe product for consumers, he said.

"Edible cannabinoid products were for sale in Minnesota before we expressly legalized them, but once you legalize them, regulate them and convince consumers they're safe, they'll start buying them in greater quantities," Tarasek said. "That would happen in Wisconsin, too."

Regulation is good for business if enforced equally, Thompson said. THC retailers lose business when customers can buy illegal products elsewhere, like the black market.

"For example, [THCA] flower not being sold in Minnesota any longer? It definitely is," Thompson said. "It's just not by companies like ours who are working with the OCM on a regular basis."

Black and white

The 2018 farm bill — intentionally or not — allowed for the expansion of legal, intoxicating THC products across the nation, but the bill expired Sept. 30 after multiple extensions.

It's overdue for an update, and officials might tie up some of the loose ends Wisconsin's industry is currently using to flourish.

The fiscal year 2025 agricultural appropriations bill contains language that would redefine hemp as containing a total THC concentration, including THCA, of no more than 0.3% on a dry-weight basis. It also excludes hemp-derived products containing quantifiable amounts of THC or any THC synthetically produced outside the plant, including delta-8 and delta-10.

A draft of the 2024 U.S. farm bill does not amend nor strike the current federal definition of hemp, but a potential amendment does.

For Highnorth, selling hemp products in both states is more of a contingency, a layover until the opening of Minnesota's retail cannabis market in 2025.

"I look forward to the idea," Thompson said, "of fully knowing what's expected."

Caleb.Fravel@startribune.com is a University of Minnesota student reporter on assignment for the Minnesota Star Tribune.