Minnesota selected 249 prospective adult-use cannabis license winners during its first license lottery on June 5, despite what any email from the state’s Office of Cannabis Management says.
OCM held its long-awaited lottery drawings, officially starting the clock for the state’s adult-use market launch two years after the legislature legalized it. Lottery winners will still need to provide additional information and seek local approval before they have a license, but sales could theoretically start before the end of the year.
“I’d like to thank the OCM staff who worked tirelessly over the past few months to make today possible and to everyone who played a role in helping us reach this milestone in our ongoing work to foster an equitable cannabis market that prioritizes public health and safety consumer confidence and market integrity,” said OCM Interim Director Eric Taubel at the conclusion of the live-streamed lottery.
Taubel oversaw the drawings, along with a pair of CPAs from Baker Tilly and staff from Smartplay International, which provided the software for the lottery.
Denial notices mistakenly sent
Notifications were scheduled to go out to winners on June 9, but instead they were reportedly all accidentally sent denial notices. OCM also posted the winners online.
Lotteries winners must still pass a criminal background check, sign a labor peace agreement, secure a site with local approval, and submit a business plan to OCM before they can finally obtain a license.
There were a total of seven separate draws. First for social equity cultivators, manufacturers and mezzo businesses. Then for general and undrawn social equity applicants for those license types. The seventh draw was for social equity retailers.
The state approved 50 cultivation, 24 manufacturing, 100 mezzobusiness and 75 social equity retailers. The state plans to select 75 more retail winners in a lottery scheduled for July 22.
Retail licenses allow operators to open five storefronts. Mezzobusinesses get three, and microbusinesses get one. Microbusinesses and all other license types have no cap, so applicants do not have to go through a lottery.
The state has also given preliminary approval to 502 applicants outside of the lottery, of which 473 are for microbusiness licenses, as of June 6. Other pre-approvals include nine testing labs, five medical-adult-use hybrids, four transporters, four wholesalers and seven delivery services.
There were a total of 3,535 applications as of June 6, including 1,854 for microbusinesses.
“Our aim has always been to build an industry centered on small businesses and ensure that the people most harmed by prohibition have a real opportunity to be a part of building it,” said Sen. Lindsey Port, chief author of the 2023 bill that legalized adult-use cannabis in the state. “The phenomenal team at the Office of Cannabis Management has my profound gratitude for their steadfast approach to getting it right. Setting up an entire industry — including regulation, a new agency, rules and more — takes time to do right, and they have worked hard to reach this milestone.”
The state currently has two licensed medical operators that are vertically integrated businesses and each run eight dispensaries. They had the opportunity to apply for adult-use hybrid licenses last spring, but OCM has not released the names of the six applicants for that particular license type.
The first retail business to open in Minnesota’s adult-use market could come from one of the state’s recognized indigenous communities. Gov. Tim Walz signed a compact with White Earth Nation allowing them to operate up to five dispensaries outside of sovereign land.
Registration window opens for HDC retailers
OCM also began accepting registrations to sell hemp-derived cannabinoid products on June 2. The registration window closes Aug. 31. On Oct. 1, the office will begin accepting license applications for lower-potency hemp edibles, manufacturers and wholesalers.
“Opening a registration window for new hemp retailers this summer allows hemp businesses to continue driving revenue and economic opportunities to the entire state,” said Taubel in a statement.
