Though an adult-use marijuana bill is poised to be signed by Gov. Tim Walz, the future remains foggy for people interested in starting a business in this new market. Here’s a bit of a breakdown for business folks looking to see what comes next.

Many will want to enter this new adult-use market, but the reality is that not likely everyone will get the kind of license they want. The bill does not allow local governments to opt out of allowing cannabis businesses. However, it does allow governments to regulate the number of businesses to one retailer per 12,500 residents. Under the legislation, applications will be prioritized for business licenses from people who live in low-income areas that have experienced a disproportionate impact from cannabis prohibition and for military veterans who lost honorable status due to a cannabis-related offense.

Many parts of the bill have changed from its original draft to now. These changes include the addition of a new “mezzobusiness” license category allowing for slightly larger operators. Initial drafts of the law allowed only “microbusinesses” to grow, process, and sell cannabis. Similar to Minnesota’s alcohol regulations, the law puts limits on vertical integration across those three sectors of the industry. Microbusinesses and mezzobusinesses, however, are the exception to that. Medical cannabis combination businesses are another exception. (More on that later.)

Jason Tarasek, a cannabis attorney with Minnesota Cannabis Law and one of the writers of the original bill, said most of the calls he’s vetting about licensing are from people looking into the mezzobusiness license.

“We are the only state that has taken such a concentrated effort to restrict businesses to smaller business types… I think we’ve seen what’s happened in other states in terms of the multi-state operators coming in and just dominating the industry to the exclusion of local and state businesses, and we were hoping to avoid that,” he said.

The medical cannabis combination business was also a last-minute addition to the bill. This essentially allows the two current medical marijuana companies in the state to participate in the adult-use market in a way that requires them to continue to serve medical marijuana patients, Tarasek said.

“I can tell you that they were initially going to be precluded from operating in the adult use space under the initial draft. So they did win a concession,” he said.

There are 16 license types outlined under the bill, 11 of which deal with adult-use marijuana. Four of the licenses are exclusively for lower-potency (hemp-derived THC products) or medical marijuana business licensure. These licenses are far cheaper than the adult-use with fewer limitations on the number of licenses available. You can find more details on these licenses in the bill or on the recently launched Office of Minnesota Cannabis website.

The following list includes the breakdown of licenses that deal with adult-use marijuana:

Cannabis microbusiness

• License cost: application fee $500, no initial license fee, renewal license fee $2,000
• What the license allows: This license allows a holder to cultivate, manufacture, and sell cannabis products at a single, 5,000-square-foot location. On-site consumption of edibles containing up to 10 mg of THC is allowed, but only in a dedicated area of the premises.
• Can license holders get other cannabis-related licenses? Only a cannabis event organizer license.  

Cannabis mezzobusiness

• License cost: application fee $5,000; initial license fee $5,000; renewal license fee $10,000
• What the license allows: This license allows a holder to cultivate, manufacture, and sell cannabis products across 15,000 square feet of space.  License holders may operate up to three retail locations, but on-site consumption of edibles is not allowed on the premises.
• Can license holders get other cannabis-related licenses? Only a cannabis event organizer license and a medical cannabis retailer license.

Cannabis cultivator 

• License cost: application fee $10,000; initial license fee $20,000; renewal license fee $30,000
• What the license allows: A cultivator license holder can grow, harvest, package, and label up to 30,000 square feet of cannabis plants for sale to other businesses.
• Can license holders get other cannabis-related licenses? Only a cannabis manufacturing license, medical cannabis cultivator license, medical cannabis producer license, license to grow industrial hemp, and cannabis event organizer license.

Cannabis manufacturer 

• License cost: application fee $10,000; initial license fee $10,000; renewal license fee $20,000
• What the license allows: The license holder can process cannabis flower into concentrates, edibles, and topicals for sale to other businesses.
• Can license holders get other cannabis-related licenses? Only a cannabis cultivator license, a medical cannabis cultivator license, a medical cannabis processor license, and a cannabis event organizer license.

Cannabis retailer

• License cost: application fee $2,500; initial license fee $2,500; renewal license fee $5,000
• What the business can do: A license holder can operate up to five retail stores selling cannabis products to Minnesotans over 21 years old. 
• Can license holders get other cannabis-related licenses? Only a cannabis delivery service license, a medical cannabis retailer license, and a cannabis event organizer license.

Cannabis wholesaler 

• License cost: application fee $5,000; initial license fee $5,000; renewal license fee $10,000
• What the license allows: This license holder can purchase cannabis flower, immature plants, or other cannabis or hemp products from other businesses to sell to cannabis manufacturers, retailers, microbusinesses, and mezzobusinesses.
• Can license holders get other cannabis-related licenses? Only a cannabis transporter license, a cannabis delivery service license, and a cannabis event organizer license.

Cannabis transporter 

• License cost: application fee $250; initial license fee $500; renewal license fee $1,000
• What the license allows: The transport of cannabis plants, flower, and other products between other cannabis businesses.
• Can license holders get other cannabis-related licenses? Only a cannabis wholesaler license, a cannabis delivery service license, and a cannabis event organizer license.

Cannabis testing facility

• License cost: application fee $10,000; initial license fee $10,000; renewal license fee $20,000
• What the license allows: The license holder can test immature cannabis plants and seedlings, cannabis flower, cannabis products, hemp plant parts, hemp concentrate, artificially derived cannabinoids, lower-potency hemp edibles, and hemp-derived consumer products.
• Can license holders get other cannabis-related licenses? A license holder may not own or operate, or be employed by, any other cannabis business or hemp business.

Cannabis event organizer 

• License cost: application fee $750; initial license fee $750
• What the license allows: License holders can organize cannabis events lasting up to four days. Event organizers must verify that all attendees are age 21 or older. They can also designate space for on-site consumption.
• Can license holders get other cannabis-related licenses? This license holder may not hold a cannabis testing facility license, a lower-potency hemp edible manufacturer license, or a lower-potency hemp edible retailer license.

Cannabis delivery service

• License cost: application fee $250; initial license fee $500; renewal license fee $1,000
• What the license allows: This license holder can purchase cannabis flower, cannabis products, lower-potency hemp edibles, and hemp-derived consumer products from licensed cannabis businesses with a retail endorsement and deliver those products to customers.
• Can license holders get other cannabis-related licenses? Only a cannabis retailer license, a cannabis wholesaler license, a cannabis transporter license, a cannabis event organizer license, and a medical cannabis retailer license are subject to the ownership limitations that apply to those licenses.

Medical cannabis combination business 

• License cost: application fee $10,000; initial license fee $20,000; renewal license fee $70,000
• What the license allows: This license allows a holder to cultivate, manufacture, and sell up to 60,000 square feet of cannabis products. This is the only license that allows for the product to be used for both medical and recreational sales. However, this license holder can only cultivate cannabis for sale in the adult-use market in an area equal to half that of the area the business used to cultivate cannabis sold in the medical market in the preceding year. Under this license, a business may operate one retail location in each congressional district.
• Can license holders get other cannabis-related licenses? That is not specified.