Minnesota lawmakers overhaul legal pot bill to address business concerns
The big changes to the bill language mainly applied to business, but an amendment adopted by the House on Monday would drop the personal possession limit from 5 pounds to 1.5 pounds.
ST. PAUL — A bill to legalize recreational adult use of marijuana in Minnesota continues its committee marathon in the Legislature, and over the last week got a significant revision aimed at addressing concerns of businesses producing newly legal hemp-derived THC.
A major amendment to the bill introduced last week in the Senate and adopted Monday, March 20, by the House Commerce Committee aims to address business concerns surrounding already legal hemp-derived THC, the chemical in marijuana that gets users “high.”
Rep. Zack Stephenson, DFL-Coon Rapids, told members the more than 140-page amendment “eliminates some of the cannabis regulations that don’t make sense in the context of a low-dose hemp market.”
Minnesota legalized the sale of THC-containing food and beverages last year in a move that caught many by surprise, including some of the lawmakers who voted in favor. People age 21 and older can buy products containing servings of up to 5 milligrams of THC. A single package of edibles — or drinkables — may not contain more than 50 milligrams.
Since then, many small businesses and breweries have launched products like THC seltzers and gummies, but they’re worried the current marijuana omnibus bill could prevent them from selling their products and taking advantage of certain federal tax benefits.
To address that, new language in the bill would create a different licensing track for producers of hemp-derived THC products, which are already legal under federal law. Sellers of true cannabis, which contains more than 0.3% THC and is still illegal federally, would have their own licensing scheme in Minnesota.
Producers of low-dose hemp-derived THC would also be exempted from a requirement to have separate facilities from other products, so breweries would still be able to produce THC seltzers, Stephenson said.
Still, even with the revisions, businesses expressed concerns Monday about whether they’d be able to continue selling hemp-derived THC products. Matt Schwandt, president of Bauhaus Brew Labs, a Minneapolis craft brewer that started making a THC beverage last year, said he was encouraged by the “good faith effort” to retool the bill. But he said there’s more to be done.
He called for a grandfathering period for businesses already selling THC products to continue operating before the new regulations are put into place by the yet-to-be-created Cannabis Management Office. He also asked for lawmakers to reconsider restrictions on delivery vehicles, and a requirement for hemp products to be sold behind the counter at a store.
“(It) is unnecessarily impractical and would prevent many if not most liquor store retailers from carrying these products,” he said. “Retailers should be able to merchandise the lower potency products in their beverage coolers on the sales floor, which frankly, many of them are doing currently.”
A Senate adopted the changes for business last week. The bill has been through more than 20 committee hearings and still hasn’t been finalized for a floor vote in either chamber.
The big changes to the bill language mainly applied to business concerns, but lawmakers have also adopted a change that will have more of a direct effect on individual consumers. The House Commerce Committee also adopted amendments to significantly reduce the amount allowed for personal possession, dropping the limit from 5 pounds to 1.5 pounds.
Local governments would not be able to prohibit cannabis, though would be allowed to create “reasonable restrictions” on the times and places cannabis businesses can operate.
The legal cannabis bill has been tweaked significantly in its journey through the Legislature, and still has some big hurdles to pass. The bill’s next stop is the House Tax Committee, where Stephenson said they’ll have more conversations about the tax on cannabis.
In the original bill, sales of cannabis products would carry an 8% state tax, though Gov. Tim Walz has called for a 15% tax. It's unclear exactly how much revenue legalization would generate, though a University of Minnesota Duluth study published in August found the state was missing out on up to $46 million in revenue from legal edibles alone, which are currently not taxed.
It’s still unclear what chances legal cannabis will have of reaching the governor’s desk this year. Walz said he’d sign a bill, and the Democratic majority House passed a similar bill in 2021. Republicans never let a bill move forward when they controlled the Senate, but while Democrats now control that chamber, it’s just a one-seat 34-33 majority.
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