Are you considering starting a cannabis microbusiness in Minnesota? With the recent legalization of recreational cannabis and updates to the licensing process, now is the perfect time to understand the requirements and position your business for success. The Office of Cannabis Management (OCM) transitioning to a standard licensing cycle has created new opportunities for both social equity and general applicants.
This guide provides a comprehensive overview of the approved activities, relevant regulations, application requirements, fees, and the updated licensing process.
For more details on the application process for each license type, check out our comprehensive Minnesota Cannabis License Application Guide.
Table of Contents
- What is a Cannabis Microbusiness in Minnesota?
- Number of Cannabis Microbusiness Licenses Available
- Relevant Regulations for Minnesota Cannabis Microbusiness Licenses
- How to Apply for a Minnesota Cannabis Microbusiness License
- Application Requirements for Minnesota Cannabis Microbusiness License
- Fees
- Closing Remarks
- FAQs
What is a Cannabis Microbusiness in Minnesota?
A cannabis microbusiness license in Minnesota authorizes you to engage in the following activities:
- Cultivation: Grow cannabis plants on up to 5,000 square feet indoors or on a half-acre outdoors.
- Processing: Produce concentrates and other cannabis or hemp-derived products.
- Retail Sales: Sell cannabis products—including flower and edibles—directly to consumers.
- On-Premises Consumption: Allow on-site consumption of edibles (subject to final rule adoption).
This flexibility makes the microbusiness license an excellent opportunity for entrepreneurs aiming to manage multiple operations under a single license.
Number of Cannabis Microbusiness Licenses Available
Minnesota does not cap the total number of cannabis microbusiness licenses issued. However, for license types that are subject to statutory caps, allocation will be conducted via a lottery system (this does not include microbusiness licenses).
Relevant Regulations for Minnesota Cannabis Microbusiness Licenses
The Office of Cannabis Management (OCM) oversees the state’s cannabis industry and enforces strict regulations to ensure safety, equity, and compliance. Key regulatory requirements include:
- Social Equity Requirements: At least 65% ownership must be held by verified social equity applicants. Learn more about Minnesota’s social equity verification process.
- Security Measures: Submission of detailed security plans to prevent unlawful diversion.
- Compliance with State Laws: Adherence to Minnesota Statutes Chapter 342 and other applicable laws.
How to Apply for a Minnesota Cannabis Microbusiness License
Below is a summary from our cannabis consultants on the application process:
Step 1: Verify Social Equity Status
- Application Window: January 15, 2025 – January 30, 2025
Social equity applicants must confirm their eligibility by providing documentation, such as proof of residence in disproportionately impacted areas or evidence of cannabis-related convictions.
Step 2: Submit License Application
- Application Window: February 18, 2025 – March 14, 2025
Applicants are required to submit comprehensive documentation, including:- Ownership disclosure forms
- Business and operations plans tailored to microbusiness requirements
- Preliminary security and ESG plans
Step 3: Lottery for Capped Licenses
- Scheduled: May–June 2025
For license types subject to statutory caps, qualified applicants will participate in a dual lottery system:
- First Lottery: Social equity applicants receive priority.
- General Lottery: Remaining licenses will be allocated.
Application Requirements for Minnesota Cannabis Microbusiness License
When applying for a cannabis microbusiness license, you will need to prepare the following documents:
- Disclosure of Ownership and Control : Requires either a digital signature or a wet signature (print, sign, and scan).
- Capitalization Table (Excel)
- Instructions Capitalization Table
- Preliminary Security Plan
- Preliminary Business Plan
- Attestation of Labor Peace Agreement
- Preliminary Training and Education Plan for Employees
- Preliminary SOP Quality Assurance
- Preliminary SOP Inventory Control, Storage, and Diversion Prevention
- Preliminary SOP Accounting and Tax Compliance
- Preliminary Operations Plan – Microbusiness or Mezzobusiness
- Cultivation Plan : Mandatory for cultivator license types or micro/mezzo licenses seeking a cultivation endorsement.
Fees
The fee structure for a Minnesota cannabis microbusiness license is as follows:
- Application Fee: $500
- Initial License Fee: No initial license fee
- Renewal License Fee: $2,000 annually
Closing Remarks
Securing a cannabis microbusiness license in Minnesota can be a complex process, but it offers a significant opportunity for small businesses to enter the cannabis market. By following the outlined steps and working with a consulting team like Catalyst BC to ensure compliance with all requirements, you can set your business on the path to success. Contact us today to schedule your free consultation.
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.
