Minnesota’s Office of Cannabis Management is working on a compact agreement with the state’s indigenous tribes that would allow them to license up to five dispensaries outside of tribal territory, potentially giving them a head start on the state’s emerging adult-use market.
“It’s likely that there would be a couple out of the gate first before the rest. So we don’t know the exact timing, but it is coming soon,” said OCM spokesperson Josh Collins.
Despite the potential early advantage, tribal retailers would at most comprise a small percentage of the state’s eventual total.
Dispensary lotteries planned for summer
Minnesota is currently accepting applications for the first round adult-use cannabis licenses, which will include 100 mezzobusinesses, 50 cultivators, 24 manufacturers and 150 retailers. License types also include microbusinesses, wholesalers, transporters, testing labs and delivery services, which are not capped. There is also a hybrid business license that’s available to the state’s two existing medical cannabis operators.
Microbusinesses are allowed to cultivate and sell products from a single site, while mezzobusinesses are allowed up to three retail sites, along with cultivation.
Lotteries for the capped license types are tentatively planned for early summer, which means a signed compact could allow indigenous companies to open the state’s first retail shops outside of tribal territory.
While retail licenses will have to wait for that lottery, microbusinesses will potentially be able to sell directly to consumers sooner, because they do not require a lottery.
Collins noted that the state already has 193 approved microbusinesses that are waiting for the state to finalize adult-use regulations before they can be granted a license. Collins said that OCM expects the rules to be formally adopted by the end of March.
“Once those rules are adopted, they will also be on a path to be close to being able to begin their operations. They just need to finish a few things like securing a labor peace agreement, a background check, and getting their local approvals,” he said. “So it’s possible that those tribal dispensaries could open first, but not far behind them, we have some potential to see microbusinesses.”
Wilkinson Memo allows for tribal cannabis operations
Each of the state’s 11 federally recognized tribal nations will have to individually sign their own compact with the state government. A draft version of the compact, obtained by the Minnesota Star Tribune, states that eligible businesses must have at least 51% tribal ownership and must be licensed by a tribal regulatory agency. Those businesses must adhere to the state’s seed-to-sale rules.
Tribal nations across the country have been able to launch adult-use cannabis businesses, regardless of the cannabis laws within the state where they reside. For the most part, this spread has not faced federal opposition.
Following the 2013 Cole Memo, which declared that the Department of Justice would not take federal action against state-legal cannabis operations, the DOJ also released the Wilkinson Memo on Oct. 28, 2014, which affirmed that the agency would deprioritize enforcing federal cannabis violations on tribal land.
“The United States Attorneys recognize that effective federal law enforcement in Indian Country, including marijuana enforcement, requires consultation with our tribal partners in the districts and flexibility to confront the particular, yet sometimes divergent, public safety issues that can exist on any single reservation,” said the memo, which was written by DOJ Director Monty Wilkinson.
This enabled adult-use dispensaries to spring up on indigenous reservation land, often ahead of legal state roll outs, such as on the St. Regis Mohawk Reservation in upstate New York in late 2022.
Minnesota has also seen the growth of cannabis businesses on tribal land, such as the White Earth Band of Chippewa, which is reportedly poised to open Minnesota’s first off-reservation dispensary as soon as the compact with the state can be finalized and signed.
