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Social equity cannabis lottery canceled
After lawsuits held up the cannabis social equity license preapproval process last month, the Minnesota Office of Cannabis Management says it will scrap the plans and do a standard license lottery in late-spring.
MINNEAPOLIS (FOX 9) - Minnesota’s marijuana industry has been delayed again after the Office of Cannabis Management (OCM) announced Wednesday it’s canceling the license preapproval process after lawsuits held up the lottery scheduled for late last month.
Slow roll
What we know: From hiring a director who resigned within days to losing legal battles to lengthy reviews, this state will now officially end up being the third-slowest state going from legalization to licensed and legal retail sales.
The soonest scenario is now June.
Lottery losers
Everybody’s a loser in Minnesota’s first lottery for cannabis license approval.
A preapproval process was designed to give a head start to veterans and people previously impacted by marijuana laws.
But a judge held up the lottery in late November.
Some of the people who applied and got excluded said the OCM should’ve let them correct perceived application errors.
"We were very clear, knowing that there was no right for reconsideration and no right to appeal in preapproval," said OCM interim director Charlene Briner.
Now OCM says it’ll skip the early lottery and wait for months to review all applications.
"A protracted period of uncertainty is an unacceptable outcome that could diminish the opportunity for social equity applicants to succeed in this market," Briner said.
648 applicants were ready for good news and got rolled over instead.
Reversing the delay
A few of them filed a writ on Wednesday, hoping an appeals court will reverse the initial ruling.
If they succeed, they hope for a second chance at preapproval.
"We certainly think that there are legal avenues available to compel OCM to do that lottery," said Blunt Strategies partner Leili Fatehi.
But as it stands, the OCM timeline moves from licenses going out in the first months of 2025 to the middle of the year or later.
Social equity applicants who were denied lottery admission can make corrections and join the 648 already approved in their own lottery. If they miss out, they’ll join a lottery with general applicants.
Those lotteries would come in May or June, more than two years after the state passed its law legalizing recreational cannabis.
'Comically bad'
"I would say that this rollout was comically bad," said Rep. Nolan West, (R-Blaine), who voted for the cannabis bills even after trying and failing to add amendments that he says would've smoothed out the initial stages. "They would rather just call it off than try and work through it."
But even some of the people disappointed by the preapproval lottery's cancelation say they understand the deliberate approach.
"In Minnesota we decided to prioritize a small business, local cannabis economy," Fatehi said. "That means we took a fundamentally different approach."
Briner told FOX 9 that businesses who receive licenses will still need to go through inspections before they can open, so it’ll take weeks or even months after the lotteries before we see legal retail sales.
In the meantime, an OCM spokesperson points out there are some 4,000 businesses selling hemp-derived THC.