Navigating the intricacies of cannabis licensing in Minnesota can be complex. At CannDelta, we provide the expertise and guidance needed to simplify this process for you. Here’s what you need to know:
Key Facts about Minnesota Cannabis Licensing
- Application Period: The 2024 hemp license application period is currently open and will close on April 30, 2024.
- Electronic Application: The application process is entirely electronic, with the application link available from November 1st.
- Location Planning: Before applying, it’s essential to finalize grow and/or processing locations.
Steps for a Successful Application
- Background Checks: First-time applicants and all authorized representatives must undergo a background check, including fingerprinting.
- Eligibility Criteria: Applicants with a controlled substance-related felony conviction within the last 10 years are ineligible.
- License Issuance: Licenses are issued post successful completion of the criminal background check.
Licensing Requirements for Minnesota Cannabis Licensing
To ensure a smooth and successful application for a cannabis license in Minnesota, it’s important to be aware of the specific requirements and criteria set by the state. Here’s what applicants need to consider:
- Background Checks: Comprehensive background checks are mandatory for all applicants and their authorized representatives.
- No Recent Felonies: Those with a controlled substance-related felony conviction within the past ten years are ineligible for licensure.
- Location Compliance: Secure and confirm locations that meet state regulatory standards. This includes understanding zoning laws and ensuring the suitability of the location for growing or processing.
- Record Keeping: Maintain accurate and detailed records as required by state regulations. This includes documentation related to the acquisition, production, handling, selling, and disposal of all plants.
- Reporting Requirements: Licensees must submit various reports, including Planting Reports and Harvest Reports, to the MDA within specified timeframes. For instance, a Planting Report must be filed within 10 days after filing with the Farm Service Agency.
- Inspection Readiness: Be prepared for routine inspections by the MDA, which may include audits of records and data.
- Landowner Consent: If you’re planning to grow on rented land, ensure you have explicit consent from the landowner and provide their contact information to the MDA.
THC Testing and Compliance:
- Regular Testing: Each hemp variety planted must be tested for THC content. The fee for one THC test is $100, with additional charges for multiple varieties or additional inspections.
Fee Structure for Minnesota Hemp Licensing
*PLEASE NOTE: The minimum cost of a grower license is $400 ($150 + $250 for one location) and the minimum cost of a processor license is $500 ($250 + $250 for one location). Each license category must have a minimum of one registered location.
The MDA collects annual, non-refundable fees for site registration and THC testing certification. Any post-application license changes, like altering the license holder’s name, adding grower or processor categories, or changing locations, incur a $50 fee.
Upcoming License Types and Availability:
Applications Expected Early 2025
License Renewal and Changes:
- Annual Renewal: Licenses expire on December 31 of each year, necessitating annual renewal. It’s important to start the renewal process well in advance to ensure continuous compliance.
- License Change Fee: If any changes are made to the license after the initial application period, a fee of $50 is charged. This includes changes like altering the license holder’s name, adding categories, or modifying grow or processing locations.
Testing and Compliance Costs:
- THC Testing Fees: The MDA invoices licensees for each sample taken for THC testing. If a licensee grows more than one variety, each is sampled and invoiced separately.
- Compliance Testing: For lots not selected by the MDA for official sampling, growers must follow official protocol for self-sampling and submit test results along with the Harvest Report.
THC Testing Requirements
- Separate Lot Testing: Each hemp variety planted is considered a separate lot and must be reported and tested separately. This is essential for ensuring the legal THC levels are maintained in each variety.
- Testing Fees: The fee for one THC test is $100. If multiple varieties are grown, each is sampled and invoiced separately at $100 per variety.
- Sampling Methodology: To sample a hemp lot, the sampler will take 30 cuttings from 30 different plants per lot, focusing on the top 5 inches of the female flower. This ensures a representative sample of the lot.
Compliance and Inspection:
- Inspection Fees: For locations requiring more than one inspection per year, an additional fee of $250 is charged for each subsequent inspection, plus $100 per THC test beyond the first one.
- Harvesting Rules: Growers must not harvest a hemp lot until a sample has been collected. Harvesting must occur within 30 days of the sample collection date.
Testing Process and Laboratories:
- Accredited Labs: Samples are submitted to accredited labs like Legend Technical Services Inc. in St. Paul for analysis.
- Testing Method: High-Performance Liquid Chromatography (HPLC) is used to determine the total potential THC, which includes delta-9 THC and THCA.
- Compliance Thresholds: A hemp lot is compliant if the percentage of Total THC on a dry weight basis falls within a specific range, taking into account the measurement of uncertainty (MU).
- Measurement of Uncertainty (MU): The MU is based on the laboratory’s measurement of uncertainty plus sampling variability. For instance, if the MU for a particular year is 24% of the % Total THC test result, this range is used to determine if the lot passes or fails the THC test.
Self-Sampling for Non-Selected Lots:
- MDA Non-Selection: If the MDA does not select a lot for official sampling, growers must follow official protocols for self-sampling.
- Certificate of Analysis (COA): Growers must submit the COA/test results to the MDA along with the Harvest Report to obtain a Fit For Commerce certificate.
Licensing for Different Scenarios
Indoor and Outdoor Growing:
- Indoor Growing: Growing cannabis indoors, including in greenhouses or other enclosed structures, is permissible. Indoor spaces must be registered as separate grow locations.
- Outdoor Growing: Outdoor cultivation is allowed, and like indoor growing, each outdoor location must be registered.
- Residential Restrictions: Growing, processing, or storing hemp inside residential dwellings is prohibited.
- Proximity to Schools and Towns: While there are no state-imposed restrictions on proximity to schools or towns, growers should be aware of and comply with local township or city zoning ordinances.
- Interstate Considerations: Non-Minnesota residents can obtain a license, provided the land used for hemp cultivation is located within the state. This license only covers activities conducted within Minnesota.
- Rented Land: Growing hemp on rented land is permissible with the landowner’s consent. Licensees must provide the MDA with the landowner’s contact information and ensure access for inspections.
Compliance and Reporting:
- Stolen Hemp Reporting: Any theft of hemp must be reported to the MDA.
- Location Changes: Licensees can change grow and processing locations during the license period by submitting a Change Request form and paying additional location fees, if applicable.
- Record-Keeping: Licensees are required to keep detailed records for at least three years, covering all aspects of hemp acquisition, production, handling, selling, and disposal.
Selling Hemp to Other States:
- Interstate Commerce: While the MDA Hemp Program covers cultivation, processing, and marketing within Minnesota, selling hemp to other states is subject to the laws of the receiving state. Licensees should ensure they are compliant with interstate commerce regulations.
Licensing in Special Cases:
- Greenhouse Cultivation: If only starting seeds in a greenhouse or similar indoor space, this space still needs to be registered as a separate grow location.
- Zoning Ordinances: Applicants should research local zoning ordinances to ensure their chosen location complies with any specific municipal requirements.
- Accurate and Complete Applications: Ensure that your application is filled out accurately and completely to avoid delays or rejections.
- Understanding of Fees: Be aware of the fee structure, including application fees, location fees, and other relevant charges.
Additional Key Considerations in Minnesota Cannabis Licensing
In addition to the specific requirements and scenarios previously discussed, there are several other critical aspects of Minnesota cannabis licensing that applicants should be aware of. These encompass various operational, regulatory, and historical elements of the program:
Sampling and Testing Protocols:
- Sampling Process: For a valid sample, at least 75% of the female plants must be flowering. The sampler takes cuttings from the top 5 inches of the female flower on 30 different plants per lot.
- Lot Size and Sampling: If a lot contains fewer than 30 plants, sampling will be done proportionally.
Testing Laboratory Standards:
- Accredited Laboratory Testing: All THC testing must be conducted at accredited laboratories, ensuring accuracy and compliance with state standards.
- Compliance with State Plan: Beginning in 2021, the MDA moved to a random- and risk-based sampling plan, focusing on testing higher-risk hemp lots.
- Risk Factors: Factors like new varieties, historical failure rates, and operations under corrective action plans are considered higher risk.
Historical Data and State Plan:
- THC Test Results Summary: Historical testing data, available in the THC Test Results Summary by Variety (2016-2020), is used to determine risk factors for the sampling plan.
- Minnesota State Plan Details: The full details of the Minnesota State Plan, including its sampling plan, are available on the USDA website.
Seed Buying and Selling:
- Legalization of Cannabis Seed Sales: As of August 1, 2023, cannabis seeds can be legally sold in Minnesota. These are regulated under the Minnesota Seed Law.
- New Tax Regulations: Effective July 1, 2023, all sellers of taxable cannabis products must register with the Minnesota Department of Revenue to remit the new Cannabis Tax.
Program History and Licensing Statistics:
- Pilot Program Legacy: The Minnesota Industrial Hemp Development Act (IHDA) in 2015 allowed for the creation of a hemp pilot program, operating from 2016 through 2020.
- Licensing and Acreage Statistics: Detailed statistics on licensing and acreage under the pilot program provide insight into the growth and scale of the industry.