Minnesota Medical Marijuana Business

Doing Medical Marijuana Business in Minnesota: Preparing for Registration


Navigating state regulatory laws or applying for licensure with a state agency is a tricky endeavor, but those necessary steps can be streamlined with the right attorney advocate who understands your business. Establishing your medical marijuana business in this state is no exception. Minnesota’s medical marijuana law identifies areas of concern to Minnesota’s regulatory agency, the Commissioner of Health, that your business can use to its advantage in preparing for the registration process.

Target Your Business Plan to Your Audience

In addition to traditional items already included in your business plan, as a medical marijuana business owner you should be aware of provisions within Minnesota’s medical marijuana law that may appropriately be reflected in your plan.

Company Description

As a beginning suggestion, you may consider using the term patient rather than customer. Minnesota’s Commissioner of Health is primarily concerned that Minnesota patients have reliable access to safe medical cannabis for medical purposes, not that your business is profitable in selling marijuana to customers (although making your business profitable in a new market is an obvious objective!).

Market Analysis

You may have already determined the size of your target market in Minnesota, patient demographics, etc. But the Commissioner will be concerned that your business has the ability to meet the ongoing needs of Minnesota patients. It will review your proposed distribution sites to determine whether the locations are accessible to patients based on “geographical need.” Identify how your business will fulfill the “geographic need” for medical cannabis. Another aspect to consider is that, as a condition of registration, a medical marijuana business must demonstrate its ability to supply medical cannabis to patients from at least one distribution site by July 1, 2015, and from all distribution sites by July 1, 2016. Your plan must address your strategy to meet these deadlines. Finally, the Commissioner will consider the business’ projection and assessment of fees on patients; discuss your pricing, margin targets, etc. with that information in mind.

Product Discussion

In making a decision about which medical marijuana businesses to register in this state, the Commissioner is required to consider the technical expertise of a manufacturer. When describing your product(s) (in addition to discussing its benefits to patients or advantages of your product over the competition) your plan should also identify your technical expertise in cultivating marijuana, including enough detail to convey your expertise in converting raw marijuana into an acceptable medical form (oil, pill, vapor). Does your business have a novel delivery method that is suitable for Minnesota medical marijuana patients, given the relatively narrow legal definition of medical cannabis? List any existing, pending, or anticipated intellectual property rights (e.g. patents, copyrights) and disclose whether any key aspects of your product may be deemed trade secret. Do not forget to address any research and development your business may be involved with; the statute contemplates that other delivery methods may develop or prove more beneficial than other delivery methods as the body of medical marijuana research expands. Consequently, the statute gives the Commissioner the power to add delivery methods to those already allowed under current law.

Cultivate Financial Transparency

The Commissioner will inquire about the long-term financial stability of any medical marijuana business applying for registered status. Whether your business is well-established in the medical marijuana industry or new to the field, your business must be able to demonstrate to the satisfaction of the Commissioner that it is financially sound. To that end, transparent financial practices are key. Working with a reputable accountant and tax professional will assist in that regard, and may be invaluable when it comes time to open your books to scrutiny by the Commissioner. As an established business law firm, JUX is in a good position to make an appropriate referral in that regard.

Grow a Quality Team

The Commissioner is concerned about the people that comprise your team. In particular, the statute requires that the Commissioner consider the qualifications of the business’ employees. All employees must be properly screened and meet the criteria for lawful employment (i.e. at least 21 years old, no felony drug offenses). Additionally, Minnesota law requires that any employees who distribute medical marijuana to patients also be duly licensed pharmacists. Finally, medical marijuana manufacturers must contract with an independent lab to test the medical cannabis. Knowing these requirements will assist you in collecting the right group of people necessary to work in your business.

Keep in mind that the Commissioner may consider other aspects of your medical marijuana business in addition to those described above, and the Commissioner may adopt a host of rules addressing registration, which will be published in the State Registrar no later than January 1, 2015.