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Important details: The window for prospective applicants to be verified as social equity applicants will open on Jan. 15, 2025. Beginning Feb. 18, 2025, the Minnesota Office of Cannabis Management (OCM) will accept applications from both social equity applicants and applicants seeking to participate in general licensing.
The cannabis licensing process in Minnesota is highly competitive and time-sensitive. After several legal challenges, the Office of Cannabis Management (OCM) announced it will resume the launch of Minnesota’s cannabis industry following a Ramsey County District Court judge’s decision to stay the cannabis license preapproval lottery originally scheduled for Nov. 26.
Legal Challenges and Path Forward
To avoid further delay and risks to social equity, OCM is ending the license preapproval process and moving forward with opening a standard licensing cycle for both social equity and general applicants beginning January 15th, 2025. This step allows the office to prevent delays to the market launch due to ongoing litigation and retain some benefit to social equity by allowing applicants for license preapprovals to move into this new round.
The 2024 law that established the license preapproval process emphasized rigorous review and operational readiness to ensure that social equity applicants were market-ready. The delays related to the court’s order to pause the lottery eliminate any early-mover advantages offered by the expedited license preapproval process envisioned by the Legislature. Therefore, the lawsuits brought by some unsuccessful applicants necessitate moving directly to the licensing cycle for both social equity and general applicants.
OCM will notify the 648 applicants who qualified in the preapproval process that their applications will automatically move forward in the next licensing process. Applicants who applied for a license not capped by statute will not be subject to a lottery and will continue their next steps in securing a license, while applicants who applied for licenses subject to a lottery will be entered into the social equity lottery. If those applicants are not selected in the social equity lottery, they will have another opportunity in the general lottery.
OCM will also communicate with all applicants who received denial notices about the options available to them. These applicants will have the opportunity to move forward in the general licensing cycle—which includes a lottery and licenses reserved specifically for social equity applicants for certain license types—or they may choose to discontinue their participation in the next cycle and request a refund of their application fee.
In February 2025, OCM will send a request for more information (RFMI) to applicants who were denied in the preapproval round who wish to continue to the next licensing cycle. In contrast to the license preapproval process, which had greater time constraints and was oriented towards assessing readiness, applicants will now have an opportunity to correct a broader range of errors in their applications. Qualified applicants applying for license types that have a statutory cap will then advance to upcoming social equity and general license lotteries to be held in 2025.
Application Readiness
Applicants need to be fully prepared to demonstrate compliance, financial stability, and operational readiness. Below are some of the most significant challenges applicants face.
1. Pre-Planning: Setting the Foundation for Success
Pre-planning is arguably the most critical phase of the licensing process. The quality of your preparation can determine whether your application is successful. Catalyst BC recommends starting at least 90 days in advance to allow sufficient time for gathering information, conducting due diligence, and crafting a compelling application narrative.
Key considerations during this phase include:
- Municipal Approvals: Many cities and towns in Minnesota have their own zoning and permitting requirements for cannabis businesses. Securing local support is often a prerequisite for state approval.
- Due Diligence: Gathering necessary documents, such as proof of financial capacity, property agreements, and compliance plans, can be time-intensive.
- Understanding the Laws: Minnesota’s cannabis regulations are detailed and complex. Missteps in understanding or interpreting the rules can lead to disqualification.
2. Application Complexity: Telling Your Story
A successful application is more than just a collection of forms—it’s a story that demonstrates why your business is a good fit for Minnesota’s cannabis market. Applicants must convey their mission, vision, and operational plan in a way that aligns with state priorities, such as equity and sustainability.
Applications often require:
- Detailed business plans.
- Financial projections and funding documentation.
- Security and compliance protocols.
- Facility designs and operational procedures.
Catalyst BC’s team of experts helps applicants craft clear, compelling narratives that highlight their qualifications and align with Minnesota’s goals.
3. Financial Readiness: The Capital-Intensive Nature of Cannabis Businesses
The cannabis industry is notoriously capital-intensive, and Minnesota is no exception. Applicants must demonstrate financial stability and a clear plan for funding operations.
Key financial considerations include:
- Startup Costs: From licensing fees to facility build-outs, initial costs can be substantial.
- Operational Capital: Applicants need to show they have the resources to sustain operations during the early stages.
- Proof of Funding: Whether through investors, loans, or personal savings, having funding secured in advance is critical.
Catalyst BC works with clients to develop realistic financial strategies, ensuring that funding plans are robust and meet the state’s requirements.
4. Facility Readiness: Securing a Suitable Location
Having a facility lined up is often a prerequisite for application approval. This involves more than just securing a property; it requires ensuring the location meets zoning laws and is equipped for cannabis operations.
Key steps include:
- Identifying properties in municipalities that permit cannabis businesses.
- Conducting environmental and security assessments.
- Developing facility designs that comply with Minnesota’s regulations.
Catalyst BC’s design-assist services help clients create state-of-the-art facilities that align with regulatory standards and operational needs.
Key Minnesota 2025 Licensing and Application Dates
January 10, 2025: Deadline to request a refund of license preapproval application fee
January 15, 2025: Social equity applicant verification window opens
January 30, 2025: Social equity applicant verification window closes
February 18, 2025: License application window opens (SEA and all applicants)
March 14, 2025: License application window closes
TBA May / June 2025: Lottery (tentative)
Why Catalyst BC is the Partner You Need
Navigating Minnesota’s cannabis licensing process can be overwhelming, especially given the legal challenges, but you don’t have to do it alone. Catalyst BC has the experience, expertise, and dedication to help you succeed.
Our Proven Track Record
With over 60 years of combined experience, Catalyst BC has secured more than 57 cannabis licenses in competitive and merit-based processes. Our team understands the intricacies of licensing in highly regulated markets and has the tools to help you stand out.
Tailored Consulting Services
We offer a full suite of services to address every aspect of the licensing process, including:
- Business Strategy: Developing personalized plans that align with your vision and Minnesota’s regulations.
- Financial Planning: Crafting detailed financial models and funding strategies.
- Application Support: Preparing comprehensive, compliant, and compelling application materials.
- Facility Design: Assisting with property selection, zoning compliance, and facility build-outs.
Commitment to Client Success
At Catalyst BC, your success is our mission. We take a hands-on approach, working closely with clients to navigate challenges, avoid pitfalls, and maximize their chances of approval.
Final Thoughts
The Minnesota cannabis licensing process in 2025 is an exciting opportunity for entrepreneurs, but it requires careful planning and expert guidance. From pre-planning to financial readiness and facility design, every step of the process demands attention to detail and strategic thinking.
Catalyst BC is here to help you every step of the way. With our extensive cannabis consulting experience and client-focused approach, we’ll ensure your application is comprehensive, compliant, and competitive.
Don’t leave your success to chance—partner with Catalyst BC and take the first step toward achieving your goals. Contact us today to schedule a consultation and start your licensing journey with confidence.
Additional Resources
FAQs
If I submitted an application that was denied in the preapproval process, can I make updates to my application before OCM reviews it as part of the next licensing cycle?
If you choose to keep your current application in the next cycle, it will be considered submitted as it currently exists. If you continue to the next licensing cycle, OCM will send you a request for more information to give you the opportunity to potentially correct reasons your application was denied.
Is the Office of Cannabis Management still planning a social equity license preapproval lottery?
Due to new litigation and the district court’s decision to stay the license preapproval lottery on Nov. 26, OCM is no longer able to hold a license preapproval lottery in advance of our next round of licensing. As such, the early-mover advantages offered by the expedited license preapproval process envisioned by the Legislature no longer exist. The OCM is moving on to the standard social equity and general licensing that is called for in Minnesota Statutes, Chapter 342.
If my application qualified for the social equity license preapproval lottery and I want to continue in the process for the next cycle, is there anything I need to do?
The OCM is working with qualified social equity applicants who advanced to the license preapproval lottery to ensure they are promptly integrated into the upcoming licensing cycle with no additional application fee and no requirement to resubmit an application. This will preserve their opportunity to lead the launch of Minnesota’s cannabis market.
If I received a denial letter in the preapproval process, what options are available to me to update my application and be considered in the next cycle?
The OSM is communicating with applicants who received denial notices to inform them of options and next steps available to them. If they fully address the reasons that their application was denied, these applicants will have the opportunity to move forward in general licensing, which includes a lottery specifically for social equity applicants. Alternately, they may choose to discontinue their participation in the next cycle and request a refund for their application fee.
Why are some applicants being given another opportunity to correct reasons that their application was denied?
At this point, all applicants with errors in their preapproval applications will have a chance to fix them. The office’s top priority is to issue licenses and launch Minnesota’s adult-use cannabis program promptly, while also preserving at least some of the benefit the legislature intended for social equity applicants.
If I decide to not move to the next cycle, can I submit an application for a business license in any future cycle?
Yes. You would need to submit a new application and pay an application fee if you withdraw your application for the next cycle.
What if I want to apply for a different license type than my original application?
You would have to withdraw your current application for license preapproval, ask for a refund by Jan. 10, and then submit a new application. Be careful not to violate true party of interest for any application.
What if I want to join another business that is also applying for a license?
You would have to withdraw your current application for license preapproval, ask for a refund by Jan. 10, and then submit a new application. Be careful not to violate true party of interest for any application.
The ending of license preapproval means there is no longer an opportunity for early cultivation. What does that mean for product being available at the launch of the market?
The OCM has always said that it will take several years for the market to fully mature and for production to match demand. The addition of early cultivation in the license preapproval process was always unlikely to provide sufficient supply to meet market demand. The microbusiness license type (which includes the ability to cultivate) is not capped in the standard licensing cycle, and there are 194 qualified microbusinesses among the 648 qualified applicants who are automatically advancing. It is entirely conceivable that rules will be adopted prior to our next lottery date, which would mean those qualified microbusinesses could receive a license and begin cultivation before summer. Finally, the OCM is close to executing compacts with several Tribal nations that will likely have cultivation capacity to serve the commercial market.
There are some exceptions to the multiple license limitations in law. What licenses can be held at the same time?
A person identified as a true party of interest may not apply for multiple license types, except that a true party of interest may be affiliated with the following combinations of applications:
• A single cannabis retailer license and a single cannabis delivery service license.
• A single cannabis cultivator license and a single cannabis manufacturer license.
• A single cannabis wholesaler license and a single cannabis transporter license.
• A single cannabis wholesaler license and a single cannabis delivery service license.
• A single cannabis transporter license and single cannabis delivery service license.
• A single cannabis wholesaler license, a single transporter license, and a single cannabis delivery service license.
For the trade name requirement, is that the assumed name and/or incorporation name?
Trade name registration will be documented through proof of registration with the Secretary of State for the company name with assumed name or DBA on the registration itself. If the applicant is an LLC, it should submit its Certificate of Organization from the Minnesota Secretary of State, and if it uses a DBA, it should also submit its Assumed Name filing that was made with the Secretary of State.
State statute provides that license holders may petition OCM to adjust the tier of a license issued within a license category, provided that the license holder meets all requirements. How would this be affected by license caps?
Statute requires OCM to consider if the current number of licenses available are consistent with the goals identified by statute beginning July 1, 2026. This could potentially include allowances for adjustments between license types not otherwise allowed by existing license type caps.
If there are individuals from Canada and do not have a Social Security number, would they just input their Social Insurance number (the Canadian equivalent to Social Security number)?
For individuals without a Social Security number, the applicant should note in the “Social Security Number (Individuals Only)” column that the individual is a “non-US Citizen.” The applicant should not input a number that may serve as a Social Security equivalent in their country of citizenship.
How do I fill out the application details if I do not have a location for the business yet?
A physical premises is not required for license preapproval and provides the applicant no advantage in the review process. However, it is necessary to read each question carefully about whether the question is asking you to attest that you will do something and/or if it is asking you to write and include what you plan to do once a location is secured. If the question itself includes “if applicable,” it is required that you provide the requested information, even if the information is preliminary or for planning purposes. If the words “if applicable” do not appear in the question, applicants must respond accordingly. Applicants should carefully consider whether a question is applicable to their application before deciding not to respond. Writing “not applicable” or “N/A” is not sufficient unless specifically noted.
Can I be a true party of interest on more than one application?
An entity or true party of interest may not submit more than one application for any single license type. This limitation does not apply to an individual, business, or entity that holds no more than 10% ownership of the business entity. Please review Minnesota Statutes, section 342.185, subdivision 2 for further details on what constitutes a true party of interest and application number limitations. An entity or true party of interest may submit applications for multiple license types if it would not result in the applicant being vertically integrated in violation of Minnesota Statutes Chapter 342. Please review Minnesota Statutes, section 342.18, subdivision 2 for further details on vertical integration prohibition and Minnesota Statutes Chapter 342 sections specific to each license type for further information on specific restrictions.
What number should I be using in the capitalization table column that asks for the Social Equity Certification Report number?
Use the “order number” that is listed on your Social Equity Certification Report, which was provided by Creative Services, Inc.
What worksheets are required to be uploaded before I pay the fee?
The following is the list of required worksheets.
• Preliminary Cultivation Plan (if applying for a cultivator license or micro/mezzobusiness license seeking a cultivation endorsement)
• Disclosure of Ownership and Control
• Capitalization Table
• Preliminary Security Plan
• Preliminary Business Plan
• Attestation of Labor Peace Agreement
• Preliminary Training and Educational Plan for Employees
• Preliminary SOP Quality Assurance
• Preliminary SOP Inventory Control, Storage, and Diversion Prevention
• Preliminary SOP Accounting and Tax Compliance
• Preliminary Operation Plan (based on license type)
Are the worksheets considered final once I complete my payment or can I re-enter my application to add additional documents?
All worksheets are considered final once you complete your payment and will be the only documents reviewed for minimum qualifications. If you re-enter Accela after submitting payment, and add additional documents under these categories, they will be considered supplemental materials that will not be reviewed. These documents are time stamped for OCM reviewers, who will be only reviewing the original and final documents based on the time of submission of the documents and payment.
The only exception to this is documents required for submission under Disclosure of Ownership and Control if applicable, based on the applicant’s response of “provided” or “not provided” to the Disclosure of Ownership and Control form. These additional required documents must be submitted immediately after submission of payment and will be reviewed per the minimum qualifications tables. If an applicant responds “provided” to a document that they do not provide immediately after submission of payment, the application will be considered incomplete. Please refer to the guidance documentation for instructions.
What is a labor peace agreement?
As defined in Minnesota Statutes, section 342.01, a labor peace agreement is an agreement between a cannabis business and a bona fide labor organization that protects the state’s interests by, at minimum, prohibiting the labor organization from engaging in picketing, work stoppages, or boycotts against the cannabis business.
What is a bona fide labor organization?
As defined in Minnesota Statutes, section 342.01, a bona fide labor organization is a labor union that represents or is actively seeking to represent cannabis workers.
Does OCM have a list of bona fide labor organizations that an applicant can work with to enter into a labor peace agreement?
There is not a complete list of qualifying labor organizations. Applicants are welcome to work with any labor union that meets statutory definitions and represents or is actively seeking to represent cannabis workers.
