Is Minnesota on the Road to Booming Canna-Businesses?
Aspiring entrepreneurs, who took notice of recent business opportunities in Colorado, are eyeing Minnesota. On May 29, 2014, Governor Dayton signed into law a bill allowing medical marijuana sales to begin in 2015. Minnesota is now among 21 other states and the District of Columbia who have similar laws. However, Minnesota’s new law is also one of the most controlled.
The purpose of Minnesota’s bill is to provide marijuana for medical purposes to qualifying candidates only. Additionally, only marijuana in liquid/oil, pill, or vaporized form is allowed. Smoking of marijuana is still prohibited. So, while Minnesota has not passed a law for widespread legalization of marijuana similar to Colorado, it has opened the door to the possibility.
In 2000, Colorado, like Minnesota, began its legalization journey with the passage of an amendment to the their constitution allowing patients and their primary caregivers to possess and use limited amounts of medical marijuana. Thirteen short years later, Colorado ended marijuana prohibition. It goes without saying that Colorado’s marijuana business has exploded and the legalization of marijuana is described as “the next great American industry.”
For now, under Minnesota’s marijuana law there will be only two manufacturers that will each have four distribution centers. These manufacturers are subject a large number of regulations, requirements, and financial obligations.
Minnesota Cannabis Grower Requirements
Interested in becoming one of the two marijuana manufacturer’s in Minnesota? Below are some of the requirements for the manufacturers:
- Each manufacturer will operate four distribution facilities.
- Distribution from at least one of the four distribution centers must begin by July 1, 2015.
- All distribution centers must be operational and begin distribution by July 1, 2016.
- The distribution facilities shall be located based on geographical need throughout the state to improve patient access. The locations for the distribution facilities will be disclosed to the commissioner during the registration process.
- A manufacturer shall operate only one location where all cultivation, harvesting, manufacturing, packaging, and processing shall be conducted.
- The distribution facilities may not contain any medical cannabis in a form that is not liquid/oil, pill, or vapor form.
- A manufacturer shall contract with a laboratory (subject to the commissioner’s approval) to test the medical cannabis as to content, contamination, and consistency to verify the marijuana meets the statutory requirements. The cost of this laboratory testing is to be paid by the manufacturer.
- A manufacturer must have procedures for the oversight of the manufacturer, procedures to ensure accurate record keeping, and procedures for the implementation of appropriate security measures.
- A manufacturer shall have requirements for protection of each location by a fully operational security alarm system, facility access controls, perimeter intrusion detection systems, and a personnel identification system.
- A manufacturer shall not share office space with, refer patients to a health care practitioner, or have any financial relationship with a health care practitioner.
- Consumption of medical cannabis on the property of the manufacturer is prohibited.
- All manufacturer employees must be 21 or over and not convicted of a disqualifying felony offense. A disqualifying felony offense means a violation of a state or federal controlled substance law that is a felony under Minnesota law, or would be a felony if committed in Minnesota. A full criminal background check is required for all employees.
- A manufacturer may not operate within 1,000 feet of a public or private school existing before the date of the manufacturer’s registration.
- A manufacturer must comply with reasonable restrictions on advertising.
- The only employees allowed to distribute medical cannabis to a patient are pharmacists.
- Prior to distribution to any patient, the manufacturer must confirm that the patient has registered with the patient registry program, assign a tracking number to any medical cannabis distributed, a pharmacist has consulted with the patient to determine the proper dosage, and the cannabis is properly packaged in compliance with the United States Poison Prevention Packaging Act.
- The maximum amount allowed to be distributed at any one time cannot exceed a 30-day supply of the dosage determined for that patient.
- Each manufacturer shall report to the commissioner on a monthly basis information regarding the amount and dosages of medical cannabis distributed, the chemical composition of the medical cannabis, and the tracking number assigned to any medical cannabis distributed.
- The application fee from each entity submitting an application for registration as a medical cannabis manufacturer is $20,000.
- Each manufacturer must pay an annual fee equal to the cost of regulating and inspecting the manufacturer in that year. The manufacturer may, however, charge patients to help cover this cost.
- Maintain detailed financial records in a manner and format approved by the commissioner.
- Participate in a certified annual audit conducted by a CPA. The costs associated with this audit are the responsibility of the manufacturer.
As anyone reading the legislation can see, there are tight controls with expansive and detailed requirements. A business attorney can help with navigating these requirements. For more information, see our frequently asked questions on Minnesota’s cannabis legalization.